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Bill Analysis

Legislative Service Commission

Am. Sub. H.B. 66*
126th General Assembly
(As Passed by the General Assembly)

This final analysis is arranged by state agency, beginning with the Adjutant General and continuing in alphabetical order.  Items that do not directly involve an agency are located under the agency that has regulatory authority over the item or that otherwise deals with the subject matter of the item.  The analysis includes a Local Government category and a Retirement Systems category.  It concludes with a Miscellaneous category.
Within each category, a summary of the items appears first (in the form of dot points), followed by a discussion of their content and operation.
TABLE OF CONTENTS
ADJUTANT GENERAL
Reimbursement of federal life insurance premiums for active duty
members of the Ohio National Guard. 29

Death benefit for active duty members of the Ohio National Guard. 29
Ohio Military Reserve. 30
DEPARTMENT OF ADMINISTRATIVE SERVICES
Layoffs due to abolishment of a position by an appointing authority. 33 Appeals from a State Personnel Board of Review decision pertaining
to a layoff. 35

Encouraging Diversity, Growth, and Equity (EDGE) Program.. 35 Debarment of vendors and contractors. 36 Office of Information Technology. 39
Changes to the Fleet Management Law.. 41 Purchases of supplies and services of persons with disabilities. 44 Temporary work levels and personnel assignments for employees exempt
from the Collective Bargaining Law.. 50

Department of Administrative Services' recommendations for a state
government reorganization plan. 50

DEPARTMENT OF AGING
Penalty for late payment of annual long-term care facility bed fee. 53
Penalty for denial of ombudsperson access to long-term care facilities or community-based long-term care sites. 53
Certification for provision of community-based long-term care services. 54 Long-term care consultation program.. 56 Level-of-care assessments to receive Medicaid nursing facility services. 61 Nursing home and residential care facility survey. 64
Long-Term Care Consumer Guide. 64 Transfer of PACE administrative duties. 67
Transferring individuals from nursing facilities to PASSPORT. 68
PASSPORT Evaluation Panel 69
Aging and disability resource centers. 69
Ambulette service providers solely serving ODA.. 70

DEPARTMENT OF AGRICULTURE
Family Farm Loan Program.. 74
Animal Health and Food Safety Fund. 74
Creation of Laboratory and Administrative Support Fund. 74
Permits for concentrated animal feeding facilities. 75 Fertilizer license, registration, and tonnage report schedule. 76
Fertilizer inspection fee. 77
Annual fertilizer sales statement 78
Merger of funds. 78
Prohibition against regulation of fertilizer and seed by political subdivisions. 78
Pesticide registration and inspection fee. 79
Commercial feed inspection fee. 80
Commercial feed report 80
Agricultural Commodity Handlers Law definitions. 80
Plant pests program fee. 82
Metrology and Scale Certification Fund. 82
Cannery license fee. 82
Soft drink manufacturing or bottling and sale of syrup or extract fees. 82
Cold-storage warehouse operation license fee. 83
Food locker establishment operation license fee. 83
Certificates of health and freesale. 84
Wine tax diversion to Ohio Grape Industries Fund. 85
Amusement rides. 85
STATE BOARD OF EXAMINERS OF ARCHITECTS
Imposition of fines against certificate holders. 87

OHIO ATHLETIC COMMISSION
Authority to issue, deny, suspend, or revoke boxing or wrestling match or exhibition permits  87
Alternative sites and substitute contestants for boxing or wrestling matches
or exhibitions. 88

ATTORNEY GENERAL
Investigation of election-related criminal activity by the Bureau of Criminal Identification and Investigation  89
Removal of Chief Justice from the Crime Victims Assistance Advisory
Committee. 89

Debts owed to the state. 90 Funding the Ohio Peace Officer Training Academy. 94

OHIO STATE BARBER BOARD
Annual review of Barber Board's rules. 94

OFFICE OF BUDGET AND MANAGEMENT
User charges for OBM budgeting services. 95
Authority to transfer interest to GRF. 96

CAPITOL SQUARE REVIEW AND ADVISORY BOARD
Financial disclosure statement filings. 96

DEPARTMENT OF COMMERCE
Plumbing inspectors. 98 Fire Marshal's Fireworks Training and Education Fund. 99
Fireworks Law.. 100 Residential Building Code. 102
Minimum price discount for spirituous liquor wholesale purchases. 103
Issuance of Sunday sales liquor permit without local option election
approval to D liquor permit premises located at ski areas. 103

OFFICE OF CONSUMERS' COUNSEL
Call center for consumer complaints against public utilities. 105
Changes to assessments collected from public utilities for maintaining
the Consumers' Counsel 105

CONTROLLING BOARD
Approval of state collective bargaining agreements and funds necessary to implement agreement 106

OHIO STATE BOARD OF COSMETOLOGY
State Board of Cosmetology office location. 107

OFFICE OF CRIMINAL JUSTICE SERVICES
Abolition of the Office of Criminal Justice Services and creation of the
Division of Criminal Justice Services in the Department of Public Safety. 108

Creation of Federal Justice Programs Fund. 108

OHIO CULTURAL FACILITIES COMMISSION
Composition. 109
Cultural Facilities Commission bond premium.. 110
Refunding Ohio Cultural Facilities Commission obligations. 111

DEPARTMENT OF DEVELOPMENT
Alternative Fuel Transportation Grant Program.. 112
Shovel Ready Sites Program.. 113
Agreements to assist in retaining jobs at military facilities scheduled to close. 114
Development Financing Advisory Council quorum.. 116
Increased state contributions under the Capital Access Loan Program.. 116
Minority business development loan and bond guarantee programs. 117
Loan Guarantees for Small Businesses Program.. 118
Industrial Site Improvement Fund. 118
Restrictions on Third Frontier Commission funding embryonic
stem cell research. 120

DEPARTMENT OF EDUCATION
I. School Funding. 137
Background to school funding formula changes. 137 New "building blocks" methodology. 140
FY 2006 and FY 2007 base-cost formula amount 141
Base funding supplements. 141
Cost-of-doing-business factor. 143
Add-backs to the 23-mill charge-off. 143 Revised base-cost formula. 147
Base-cost formula for joint vocational school districts. 147
Base-cost funding guarantee. 148
Building blocks spreadsheet 148
Spending requirements associated with the building blocks model 149 Transitional aid. 150
Permanent state aid guarantee eliminated. 151
Application of funding formula changes to county MR/DD boards,
community schools, open enrollment, and Post-Secondary Enrollment
Options Program.. 151

Twice-annual reporting of formula ADM... 152 Random audits of school district ADM reports. 153
Parity aid. 153 Poverty-based assistance--background. 154
Poverty-based assistance payments. 155 Transportation subsidy. 164 Special education weighted funding. 165 Threshold catastrophic amount 167
Speech-language services subsidy. 167
Special education transportation subsidy. 167
Special education funding report 167
Payment of special education excess costs to JVSDs. 168
Payment of excess costs for children in residential "homes" 168
Switch to weighted special education funding for state institutions. 168
Date for counting of students in handicapped preschool units. 169
Unit funding for preschool special education related services. 170
Report on the number of handicapped preschool children served. 170
GRADS personnel allowance. 171
Repeal of equity aid statute. 171
Recalculating school district valuations. 171
Changes in charge-off supplement ("gap aid"). 172 Bus purchase subsidies. 173
Reimbursement of school district share of Medicaid expenses. 174
Annual reporting by state institutions operating vocational
education programs. 174

Cap on reimbursement of nonpublic school administrative expenses. 174
II. Scholarship Programs. 175
Educational Choice Scholarship Pilot Program.. 175 Changes to the Cleveland scholarship pilot program.. 180 Pilot Project Special Education Scholarship Program.. 181
III. Community Schools. 182
Background. 182
Caps on community schools. 183 Opening schools in excess of the caps. 184
Moratorium on new e-schools. 184
Prohibition on operating school from a residential facility. 185
Criteria for approval of sponsors. 185
Limit on number of schools an entity may sponsor. 186
Deadline for adoption of contract 187
Nullification of contract 187
Enrollment of community school students. 188
Opening date for schools. 188
Changes regarding e-schools. 189 Provision of computers to certain community school students. 191
Sanctions for poorly performing community schools. 192 Procedures for closing a community school 195
District report card data for conversion schools serving at-risk students. 195
Annual report of expenditures for special education services. 196
Community school to serve autistic students and non-disabled students. 196
State payments to community schools. 196 Repeal of outdated law regarding pilot project community schools. 199
IV. Other Education Programs. 200
Later administration of spring achievement tests. 200 Use of student data verification codes. 201
Public release of achievement tests. 202
Elimination of certain diagnostic assessments. 203
Early childhood education programs. 203 Montessori programs. 212
Reading improvement grants. 212 Post-Secondary Enrollment Options Program.. 213 Reduction of the number of school district employees for financial reasons. 214 Termination of school district transportation staff. 217 Academic distress commissions. 219 Legislative approval of new school districts. 222
School district internal auditors. 222
Eye exams for disabled students. 223
Collective bargaining agreements and use of school volunteers. 224
School district sale of real property. 224
Prohibition on lowered school district and building performance ratings. 225 Ohio Center for Autism and Low Incidence. 226
Stipend for National Board certified teachers. 227
Model student acceleration policy. 228
School district latchkey programs. 228
Elimination of school districts' annual spending plan and submission
of certificate of estimated resources. 229

Elimination of requirement to file statistical reports. 229
Transportation of pupils attending vocational education programs. 229
Updated five-year projections for fiscal watch and fiscal emergency
school districts. 230

Suspension of set-asides for school districts in certain circumstances. 230 Prohibition against school district operation without a charter. 231
Map required in chartering new school districts. 231
Legislative committee to study school district consolidation. 232
School Physical Fitness and Wellness Advisory Council 232

BOARD OF EMBALMERS AND FUNERAL DIRECTORS
Funeral director apprenticeships. 233

STATE EMPLOYMENT RELATIONS BOARD
SERB Training, Publications, and Grants Fund. 234

ENVIRONMENTAL PROTECTION AGENCY
Motor vehicle inspection and maintenance program.. 240
Solid waste disposal fees. 242 Definition of "solid wastes" 245
Construction and demolition debris facilities. 246 Exclusion from construction and demolition debris disposal fee. 248
New construction and demolition debris disposal fees to fund projects
of soil and water conservation districts and recycling and litter
prevention program.. 249

Hazardous waste cleanups. 250 Scrap Tire Management Program.. 252 Fees for air pollution control permits to install based on process weight rates. 254
Extension of various fee-related provisions. 255 Distribution of federal funding for NPDES program administration. 258
Section 401 water quality certifications. 258 Certification of professionals under Voluntary Action Program Law.. 263
Clean Diesel School Bus Fund. 264

eTECH OHIO COMMISSION
Elimination of the Ohio SchoolNet Commission and the Ohio
Educational Telecommunications Network Commission and creation
of the eTech Ohio Commission. 265

GENERAL ASSEMBLY
Submission of legislative reports via electronic means. 269

DEPARTMENT OF HEALTH
Critical access hospitals. 272
Funding for county tuberculosis control programs and detention costs. 272 Administration and implementation of the "Choose Life" Fund. 274
Certificate of Need moratorium on long-term care beds. 274 Physician Loan Repayment Program.. 276
J-1 Visa Waiver Program.. 276
Fee increase for birth certificates, death certificates, and divorce and
dissolution of marriage decrees. 277

Hospice care facility inspection fee. 278
Nursing home and residential care facility licensing fees. 278
Revocation of nursing home and residential care facility licenses. 279 Rejection of license application. 280
Religious nonmedical health care institutions:  nurse aide training exemption. 280
Elimination of Nursing Facility Regulatory Reform Task Force. 281
Adult care facility inspection fees. 281
Radiation control program fees for health care and radioactive
waste facilities. 282

Program for Medically Handicapped Children. 283 Reimbursement of medical liability insurance premiums paid by free clinics. 285

OHIO HISTORICAL SOCIETY
Disbursement of funds by Ohio Historical Society. 286

DEPARTMENT OF INSURANCE
School Employees Health Care Board. 288
Medicaid health insuring corporations to post performance bond. 291
Certificate of authority to establish or operate a health insuring corporation. 292
Prompt payment requirements for health insuring corporations
covering Medicaid recipients. 292

Additional moneys for the Department of Insurance Operating Fund and fee
increases. 293

Exemption for "employer insureds" from the unauthorized foreign
insurance tax. 294

Exemption for professional or medical liability insurance from the
unauthorized foreign insurance tax. 294

Insurer's notification to Superintendent of Insurance concerning out-of-state discipline  295
Certificates of compliance for authorized foreign insurers. 295
Captive insurers exemption--tax on the unauthorized conduct of the
business of insurance. 295

DEPARTMENT OF JOB AND FAMILY SERVICES
I. General 311
Support Services Federal Operating Fund. 311
Support Services State Operating Fund. 311
Consolidated funding allocations. 311
Increase in county share of public assistance. 312
Recovery of excess payments made to county family services agencies. 312
Eligibility for certain ODJFS-administered programs. 313
Study on disability determinations. 313
Statistics on frequently dispensed drugs under the Ohio's Best Rx Program.. 314
Temporary civil service authority of the Director of Job and Family Services. 314 II. Workforce Development 316
Compliance with workforce development agreements. 316
III. Child Care. 317
Publicly funded child care reimbursement ceilings and market rate survey. 317
IV. Child Support Enforcement 318
Lump sum payments sent to the Office of Child Support 318
Electronic disbursement of child support 319
Child support operating fund. 319
Retention of federal incentives for child support enforcement programs. 319
V. Child Welfare and Adoption. 320
Summary of minor adoption proceedings. 320
VI. Title IV-A Temporary Assistance for Needy Families. 320
New TANF programs. 322 Ohio Works First 327 VII. Medicaid. 328
Medicaid eligibility reduction. 329
Aged, Blind, and Disabled Medicaid eligibility--the home as a
countable resource. 329

Medicaid look-back period. 330
Medicaid eligibility fraud. 331 Medicaid Estate Recovery Program.. 333 Medicaid co-payment program.. 340
Medicaid coverage of dental services. 340
Medicaid coverage of vision services. 341
Prohibition on reimbursement for erectile dysfunction drugs. 341
Supplemental Drug Rebate Program.. 341
Multiple-state drug purchasing program.. 341
State Maximum Allowable Cost Program for Medicaid drug reimbursement 342
Medicaid e-prescribing system.. 343
Community mental health services. 344
Medicaid coverage of alcohol, drug addiction, and mental health services. 344
Medicaid reimbursement of long-term care services. 345 Ohio Veteran's Home Agency nursing facility beds. 364
Change of operator, closure, and voluntary termination and withdrawal 364 Medicaid care management 375 Medicaid payments for graduate medical education costs. 385 Supplemental Medicaid payment program for children's hospitals. 386
General requirements for home and community-based services waivers. 386
ODJFS-administered Medicaid waivers. 388
Medicaid waivers for individuals with autism or developmental delays or disabilities. 389
ICF/MR Conversion Pilot Program.. 390 Assisted living Medicaid waiver. 395 Medicaid voucher pilot program.. 397
Ohio Access Success Project 398
Medicaid Administrative Study Council 398
Performance audit of Medicaid program.. 401
Reviews of the Medicaid program.. 401
Medicaid data system.. 402
Rules governing services. 403
Termination of unused Medicaid provider agreements. 403
Recovery of Medicaid overpayments. 404
Recovery of Medicaid overpayments by other state agencies. 405 Final Medicaid orders when no hearing is requested. 406
Pharmacy and Therapeutics Committee. 406
ODJFS' duties under the Medicare Prescription Drug, Modernization and Improvement Act of 2003  406
VIII. Hospital Care Assurance Program.. 407
IX. Disability Medical Assistance. 408
Disability Medical Assistance Program.. 408
Disability Medical Assistance Council 408
X. Title XX Social Services. 410
Audits of state agency Title XX expenditures. 410
Audits of Title XX social services providers. 410
Rules governing the Title XX program.. 411
Use of TANF funds for Title XX social services. 411 XI. Food Stamp Program.. 412
Food Stamp Program work requirements. 412

JUDICIARY/SUPREME COURT
Vehicle allowance for Supreme Court justices. 413
Medina municipal court clerk. 414 Removal of the right to counsel for indigents in certain civil juvenile
proceedings. 415

Criminal justice regional information system.. 416

LEGISLATIVE SERVICE COMMISSION
Ohio school district revenue and expenditure database. 418
Legislative Office of Education Oversight 418
Legislative Budget Office. 419

LOCAL GOVERNMENT
Health care benefits for agencies of political subdivisions. 423
Procedure changes to family and children first county councils. 423 Use of money in the indigent drivers alcohol treatment funds. 428
Bids and bid guaranties for county purchases. 428
Law libraries. 429 Spending authority of county boards of elections. 432 County Electronic Voting Machine Maintenance Fund. 434
Direct recording electronic voting machine acquisition requirements. 434
Treatment of political subdivision insurance and self-insurance costs
and deductibles. 435

Local Government and Library Revenue Distribution Task Force. 436
Boards of trustees for certain regional transit authorities. 437
Metropolitan housing authorities. 438 Local funding options for construction of convention center. 439
Local funding options for support of arts organizations. 440
Governing board for certain regional arts and cultural  districts. 440
Report on county and large city cost savings. 441
Annual Local Government Inventory and Road Report 441

OHIO LOTTERY COMMISSION
Creation of the Charitable Gaming Oversight Fund. 442

DEPARTMENT OF MENTAL HEALTH
Transfer of Ohio Family and Children First Cabinet Council
administrative duties. 443

Family and Children First Administration Fund. 444
Billing methodology for Department of Mental Health hospital inpatients. 444
Billing methodology for state-operated community mental health
services clients. 449

Consolidated prescription drug purchasing program.. 449

DEPARTMENT OF MENTAL RETARDATION AND DEVELOPMENTAL DISABILITIES
Community alternative funding system terminated. 451
Medicaid case management services. 453
Medicaid home and community-based services. 455
Rules governing service contracts. 455
Fee increase for county MR/DD boards. 456
Priority waiting lists for home and community-based services. 456
Home and community-based services under the Department of MR/DD.. 457

DEPARTMENT OF NATURAL RESOURCES
Fees for oil and gas well permits. 463
Old Woman Creek National Estuarine Research Reserve. 463
Privatization of inspection of certain dams. 464
Division of Wildlife's sources of funding for payments to school districts. 465
Youth hunting licenses and permits; fur taker permits. 466
Resident hunting and fishing licenses for certain military personnel 466
State park fees. 467 Elimination of Parks and Recreation Depreciation Reserve Fund. 468
Watercraft Revolving Loan Fund and related program.. 468
Nonresident operation of all-purpose and other special vehicles. 470
Distribution of money from severance tax on coal 470

OHIO BOARD OF NURSING
Medication Aide Pilot Program.. 471
OHIO OCCUPATIONAL THERAPY, PHYSICAL THERAPY, AND ATHLETIC TRAINERS BOARD
Occupational Therapy, Physical Therapy, and Athletic Trainers
Board membership. 481

Practice of physical therapy without prescription or referral 481

OHIO PUBLIC DEFENDER COMMISSION
Background information. 482
Operation of the act 483
DEPARTMENT OF PUBLIC SAFETY
Creation of the Division of Criminal Justice Services in the Department
of Public Safety and abolition of the Office of Criminal Justice Services. 487

Proceeds from the criminal forfeiture of property to Department of
Public Safety agencies under federal law.. 488

Deletion by the Bureau of Motor Vehicles of a record of conviction. 488
Display of certain special license plates on recreational vehicles. 489
Commercial driver's license exemption. 489
Commercial driver's licenses. 489
Utility vehicles and the motor vehicle dealer licensing law.. 490
Repeal of dealer registration provisions of the special vehicle law.. 491
Homeland security funds. 491

PUBLIC UTILITIES COMMISSION OF OHIO
Assessments collected from railroads and public utilities for maintaining
the Public Utilities Commission. 492

Forfeitures assessed by the Commission. 493 Utility Radiological Safety Board Assessments. 494

OHIO BOARD OF REGENTS
Cap on undergraduate tuition increases at state institutions of
higher education. 497

Phasing out of the Ohio Instructional Grant Program.. 498
Creation of the Ohio College Opportunity Grant Program.. 498 State Need-Based Financial Aid Reconciliation Fund. 502
Financial aid audits. 502
Fees for certificates of authorization and annual reports. 502
Transfer of career-technical education coursework to state institutions
of higher education. 503

Local administration competency certification program.. 503 Award of state college and university printing contracts. 505 National Guard Scholarship Reserve Fund. 506
Kent State University's Columbus Program in Intergovernmental Issues. 506
Insurance for treasurer of Shawnee State University. 507
Warren County-Montgomery County community college district 507 University enrollment caps. 509
Nurse Education Assistance Program loans. 510
The Ohio State University Board of Trustees membership. 510

DEPARTMENT OF REHABILITATION AND CORRECTION
Payment for necessary medical care of persons confined in a county jail
or a state correctional institution at the Medicaid reimbursement rate. 512

Assessment of library fees. 512
Correctional Faith-Based Initiatives Task Force. 512
GPS monitoring of sexually violent predators. 513

RETIREMENT SYSTEMS
Elimination of appropriation to Ohio Police and Fire Pension Fund. 514
Municipal pubic safety directors included in PERS-LE.. 515
Retaining independent legal counsel 515

STATE BOARD OF SANITARIAN REGISTRATION
Notification of sanitarian continuing education courses. 516
Sanitarian fees. 516

OHIO STATE SCHOOL FOR THE BLIND/
SCHOOL FOR THE DEAF
Administration of donations and federal funds. 517
Custodial funds for students. 518
State School for the Deaf Educational Program Expenses Fund. 518
State School for the Blind Student Activity and Work-Study Fund. 519

SCHOOL FACILITIES COMMISSION
Background. 520
Equalization of maintenance levies. 521
Career-technical school building assistance loan program.. 523


Investment earnings of Education Facilities Trust Fund. 524

Project plan submission to ODOT. 525

SECRETARY OF STATE
Notary public name or address change and resignation. 526
Commissions for special police officers. 526
Prohibitions on duplicate candidacy. 527
BOARD OF SPEECH-LANGUAGE PATHOLOGY 
AND AUDIOLOGY
Licensure of audiologists. 530
DEPARTMENT OF TAXATION
I. Commercial Activity Tax. 542
New business privilege tax. 542 II. Corporation Franchise Tax. 563
Phase-out of corporation franchise tax. 563 Some noncorporations treated as corporations. 567
Recycling and Litter Prevention Fund. 568
Purchase and installation of new manufacturing machinery and equipment 568 Telephone company tax credit for providing telephone service programs
to aid the communicatively impaired. 570

III. Personal Income Tax. 570
Tax rates reduced uniformly by 21%... 570
Inflation adjustments delayed. 572
Deduction for qualified tuition and fees eliminated. 572
Credit for low-income taxpayers created. 573
Injured military personnel income tax refund contribution system.. 573 Taxation of trust income made permanent 574
Trust residency rules. 575
"Qualifying investment pass-through entity" 576
Trust election to be subject to the commercial activity tax. 577
Credit for a resident's out-of-state income tax liability disallowed if
the out-of-state income tax liability is deducted in computing the
resident's tax base. 578

Meaning of "indirect" ownership. 578
Treatment of income from nonresident's sale of a pass-through entity. 579
IV. Property Taxes and Transfer Fees. 580
Elimination of the 10% rollback in real property taxes for real property
used in business. 580

Phase-out of tax on business and telecommunications personal property. 581 Joint Legislative Tax Reform Impact Study Committee. 586
Reduction in assessment rate on public utility property. 587
Tax treatment of nonutility electricity providers. 587
Railroad property assessment 588
Property leased to public utilities. 588
Taxation of oil and gas recovery equipment 589
School district property tax to offset funding formula charge-off increases. 590
Accelerate phase-out of state reimbursement for $10,000 business
property exemption. 590

Equalization of real property assessments. 591
School district property tax replacement payments when district
mergers occur. 591

Computation used to determine amounts deposited each year in the
Property Tax Administration Fund changed. 593

State payment of estimated taxes for acquired property. 595
Interest rate reduced on personal property tax late payments and
overpayments. 595

Incentive districts. 596 Tax increment financing changes. 599
Real property tax exemption for certain buildings and lands used by a state university. 600
Performing arts center tax exemption. 601
V. Sales and Use Taxes. 602
Rate change. 602
Temporarily maintain the 0.9% discount for vendors and sellers. 603
Overview of the Streamlined Sales and Use Tax Agreement and changes
made to conform to it 603
Transmission to the Treasurer of State of sales and use taxes collected
by court clerks upon issuing certificates of title. 608

Sales of investment metal bullion and coins subject to sales and use taxes. 608
VI. Kilowatt-hour and Natural Gas Consumption Taxes. 609
The kilowatt-hour (kWh) tax. 609 The natural gas consumption tax. 610
VII. Cigarette Taxes. 610
Sale, distribution, and taxation of cigarettes. 610 Use tax exemption for cigarettes. 618
Cigarette excise use tax exemption for cigarettes. 618
Transportation of untaxed cigarettes. 618
VIII. Other Taxation Provisions. 618
Local Government Funds. 618 Act's treatment of LGF, LGRAF, and LLGSF. 621 Job retention tax credit 624 Job creation tax credit 624 Estate taxes. 625 Real estate assessment funds. 630
Phase-out of the grain handling tax. 630
Tax credits under the Ohio Venture Capital Program.. 631 Motor fuel taxes. 633 Pass-through entity tax law:  technical and conforming changes. 635
Tax Commissioner authorized to require identifying information from
persons filing tax documents with the Department of Taxation. 636
School district income tax on earnings. 637 Reauthorization of municipal income tax sharing with school districts. 638
Convention facilities authority lodging tax. 639
Convention center tax authorizations. 640 Temporary tax amnesty program.. 643 Dealers in intangibles tax:  penalty review procedures established. 644
Definition of "dealer in intangibles" 645
Tax Commissioner reports on tourism-related tax revenue. 646

DEPARTMENT OF TRANSPORTATION
Transportation improvement district projects. 648
Transportation improvement district bond refunding through the State Infrastructure Bank  648
General aviation license tax. 649
Maintenance of state park roads. 649

OHIO TUITION TRUST AUTHORITY
Background. 650 Index Operating Fund. 651
Change in terminology. 652
Account termination and refunds under the Guaranteed Program.. 652 Account termination and refunds under the Variable Program.. 653
Refunds to scholarship programs. 654
Elimination of refunds for beneficiaries receiving scholarships. 654
Refund of tuition in case of withdrawal from school 654

OHIO VETERANS' HOME AGENCY
Ohio Veterans' Homes Rental, Service, and Medicare Reimbursement Fund. 655

OHIO WATER DEVELOPMENT AUTHORITY
Competitive bidding requirements. 655

BUREAU OF WORKERS' COMPENSATION
Bureau of Workers' Compensation investments. 660 Audits. 667
DEPARTMENT OF YOUTH SERVICES
Payment of maintenance and other expenses of a district detention facility. 674
Referral of children by the Department of Youth Services to community corrections facilities  675

MISCELLANEOUS
Financial accountability of persons that contract with the state or a
political subdivision. 677
Legal Aid Fund. 693 Ohio Community Service Council Gifts and Donations Fund. 696
Consolidation of certain regulatory boards and commissions. 696 Satisfaction of judgments and settlements against the state. 699
Conveyance of real estate in Athens County. 699
Safekeeping of securities pledged by trust companies. 700
Ohio CASA/GAL Study Committee. 700
Applicability of Ohio's Miscellaneous Bond Proceedings Law.. 701

ADJUTANT GENERAL


Reimbursement of federal life insurance premiums for active duty members of the Ohio National Guard
(R.C. 5919.31)
The act requires the Adjutant General to reimburse an active duty member (see below) of the Ohio National Guard in an amount equal to the monthly life insurance premium paid for each month or part of a month by the member while being an active duty member--if the member chooses to purchase life insurance from the federal Servicemembers' Group Life Insurance program.  "Active duty member" generally is defined as a member of the Ohio National Guard on active duty pursuant to an executive order of the President of the United States, the federal Homeland Defense Activity Law, another act of Congress, or a proclamation of the Governor, but does not include a member performing full-time Ohio National Guard duty or performing special work active duty under specified federal law.[1]
If the Adjutant General does not have sufficient available unencumbered funds to so reimburse active duty Ohio National Guard members, the Adjutant General may request additional money from the Controlling Board.  The act also gives the Adjutant General power to prescribe and enforce regulations to implement these life insurance premium provisions, which regulations need not be adopted as rules in accordance with R.C. 111.15 or the Administrative Procedure Act.
Death benefit for active duty members of the Ohio National Guard
(R.C. 5919.33)
Under former law, the Adjutant General had to pay a $20,000 death benefit from appropriations for operating expenses to an Ohio National Guard member's designated beneficiary or beneficiaries if the member died while performing state active duty under orders issued by the Adjutant General on behalf of the Governor.  Under the act, the Adjutant General instead must pay a $100,000 death benefit from the appropriations made for this purpose to the designated beneficiary or beneficiaries of any "active duty member" of the Ohio National Guard who dies while performing active duty.  The act defines "active duty member" in the same manner as described under the preceding topic.
Ohio Military Reserve
(R.C. 5920.01; Section 560.03)
Background
The Ohio Military Reserve (OHMR) is organized as a reserve military force to defend the state when the Ohio National Guard is employed so as to leave the state without adequate defense.  The Governor is its commander-in-chief and is responsible for prescribing rules under which the OHMR operates.  The OHMR cannot be called into the military service of the United States, but it may become a component of the Ohio National Guard and subject to the Secretary of Defense's regulations thereby.  Enlistment in the OHMR does not exempt a person from military service under any law of the United States.
New annual report
The act requires the OHMR's commander to annually prepare, and deliver to the General Assembly within three months of the end of the state fiscal year, a written report of all OHMR expenditures and of the use of all OHMR funds (R.C. 5920.01(B)).
New study commission
The act creates the Ohio Military Reserve Homeland Security Study Commission to evaluate the OHMR's role and effectiveness.  The Commission consists of seven members:  the Chair of the House Commerce and Labor Committee, who will serve as the study commission's chairperson, two members of the House of Representatives appointed by the House Speaker, two members of the Senate appointed by the Senate President, the Adjutant General or the Adjutant General's designee, and the Director of Public Safety or the Director's designee.  The act directs the study commission to report its findings to the General Assembly before January 1, 2006.  (Section 560.03.)
DEPARTMENT OF ADMINISTRATIVE SERVICES


Layoffs due to abolishment of a position by an appointing authority
(R.C. 124.321(D))
Overview of former and continuing law
Under the Civil Service Law, one of the continuing reasons for which an appointing authority may lay off an employee is as a result of the abolishment of the employee's position (see grounds in next paragraph).  Formerly, the abolishment had to be due to the lack of continued need for that position--the abolishment was a permanent deletion of the position from the appointing authority's organization or structure.  The appointing authority had to indicate in its determination to abolish the position this "lack of continued need" for it. 
Under continuing law, an abolishment of a position and, therefore, a consequent lay off of the employee holding the position may be (1) as the result of a reorganization for the efficient operation of the appointing authority, (2) for reasons of economy, or (3) for lack of work.
Definition of and bases for abolishment
The act redefines the term "abolishment" as the deletion of a position (as contrasted with former law's "permanent" deletion of a position) from the organization or structure of an appointing authority.  The act also removes from the definition the condition that the abolishment "be due to the lack of continued need" for the position and repeals the corresponding requirement that the appointing authority's determination to abolish the position indicate this lack of continued need.  However, the act still provides that an abolishment may be for any one or any combination of the following:  as the result of a reorganization for the efficient operation of the appointing authority, for reasons of economy (see below), or for lack of work.
Layoff due to abolishment of a position for reasons of economy
The act essentially defines for appointing authorities the second basis--"reasons of economy"--that may result in the abolishment of a position and the lay off of the employee holding it.  Specifically, the act provides that "reasons of economy" must be determined at the time the appointing authority proposes to abolish the position.  Additionally, "reasons of economy" generally must be based on the appointing authority's estimated amount of savings with respect to salary, benefits, and other matters associated with the abolishment of the position.  However, the act allows "reasons of economy" to be based on savings with respect to salary and benefits only if both of the following apply:

If an appointing authority is authorized to abolish a position and lay off an employee based on the appointing authority's estimated amount of savings with respect to salary and benefits only, as outlined above, each of the following applies: Appeals from a State Personnel Board of Review decision pertaining to a layoff
(R.C. 124.328)
Continuing law allows a classified employee to appeal the employee's layoff by an appointing authority to the State Personnel Board of Review (SPBR).  And, under former law, only the employee could appeal the SPBR's decision to the appropriate court of common pleas under the Administrative Procedure Act. 
The act also allows an appointing authority to so appeal a SPBR decision.
Encouraging Diversity, Growth, and Equity (EDGE) Program
Procurement goals and guidelines for contracting with EDGE business enterprises
(R.C. 123.152(B)(2) and (14))
Under continuing law, state agencies are encouraged to contract with "EDGE business enterprises," which are businesses certified by the Director of Administrative Services as participants in the Encouraging Diversity, Growth, and Equity (EDGE) Program.  The Director must establish procurement goals for state agencies, including state universities and the Ohio School Facilities Commission, to contract with EDGE business enterprises generally for services, goods, and public improvements.[2]  The act requires the Director to establish guidelines, rather than procurement goals, for state universities and the Ohio School Facilities Commission to allow the universities and Commission to establish their own procurement goals for contracting with EGE business enterprises.
Standard industrial code
(R.C. 123.152(B)(2))
Under continuing law, the Director is required to establish agency procurement goals for contracting with EDGE business enterprises based on the availability of eligible program participants by region or geographic area.  Formerly, the procurement goals also had to be established by standard industrial code, but the act allows the Director to use "equivalent code classification" as an alternative to using standard industrial code.
Point system to evaluate bid proposals for EDGE participants
(R.C. 123.152(B)(6))
Under former law, the Director was required to establish a point system to evaluate bid proposals to encourage EDGE business enterprises to participate in the procurement of professional design and information technology services.  The act allows the Director to establish a "comparable system" as an alternative to a point system.
Exemption from Public Records Law for EDGE applicants
(R.C. 123.152(C))
The act exempts from the Public Records Law business and personal financial information and trade secrets submitted by EDGE Program applicants to the Director unless the Director presents the financial information or trade secrets at a public hearing or public proceeding concerning the applicant's eligibility to participate in the Program.
Debarment of vendors and contractors
(R.C. 125.25 and 153.02)
Overview
The act authorizes the Director of Administrative Services to debar vendors and contractors from consideration for contract awards based on specified factors.  It also establishes procedures governing the debarment, including notice and hearing requirements.  As described below, the specified factors differ between the vendors and contractors.
Vendors
Under the act, the Director of Administrative Services may debar a vendor from consideration for contract awards (apparently for supplies or services) upon a finding, based upon a reasonable belief, that the vendor has done any of the following:
(1) Abused the selection process by repeatedly withdrawing bids or proposals before purchase orders or contracts are issued or failing to accept orders based upon firm bids;
(2) Failed to substantially perform a contract (according to its terms, conditions, and specifications) within specified time limits;
(3) Failed to cooperate in monitoring contract performance by refusing to provide information or documents required in a contract, failed to respond to complaints to the vendor, or accumulated repeated justified complaints regarding performance of a contract;
(4) Attempted to influence a public employee to breach ethical conduct standards or to influence a contract award;
(5) Colluded to restrain competition by any means;
(6) Been convicted of a criminal offense related to the application for or performance of any public or private contract, including embezzlement, theft, forgery, bribery, falsification or destruction of records, receiving stolen property, or any other offense that directly reflects on the vendor's business integrity;
(7) Been convicted under state or federal antitrust laws;
(8) Deliberately or willfully submitted false or misleading information in connection with the application for or performance of a public contract;
(9) Violated any other responsible business practice or performed in an unsatisfactory manner as determined by the Director;
(10) Through the default of a contract or through other means had a determination of unresolved finding for recovery by the Auditor of State;
(11) Acted in such a manner as to be debarred from participating in a contract with any governmental agency.
When the Director reasonably believes that grounds for debarment exist, the Director must send the vendor a notice of proposed debarment indicating the grounds for the proposed debarment and the procedure for requesting a hearing.  The hearing must be conducted in accordance with the Administrative Procedure Act.  If the vendor does not request a hearing in the specified manner, the Director must issue the debarment decision without a hearing and must notify the vendor of the decision by certified mail, return receipt requested.
The Director must determine the length of a debarment period and may rescind a debarment at any time upon notification to the vendor.  During a debarment period, a vendor is not eligible to participate in any state contract, but after the debarment period expires, the vendor is eligible to be awarded a state contract (apparently for supplies or services).
Through the Office of Information Technology (see the next portion of this analysis) and the Office of Procurement Services, the Director is required to maintain a list of all vendors currently debarred from participating in state contracts (apparently for supplies or services).
Contractors
The Director also may debar under the act a contractor from contract awards for certain public improvements upon proof that the contractor has done any of the following:
(1) Defaulted on a contract requiring the execution of a takeover agreement;
(2) Knowingly failed during the course of a contract to maintain the coverage required by the Bureau of Workers' Compensation;
(3) Knowingly failed during the course of a contract to maintain the contractor's drug-free workplace program as required by the contract;
(4) Knowingly failed during the course of a contract to maintain insurance required by the contract or otherwise by law, resulting in a substantial loss to the owner;
(5) Misrepresented the firm's qualifications in the selection process set forth in the Professional Design Services Law;
(6) Been convicted of a criminal offense related to the application for or performance of any public or private contract, including embezzlement, theft, forgery, bribery, falsification or destruction of records, receiving stolen property, or any other offense that directly reflects on the contractor's business integrity;
(7) Been convicted of a criminal offense under state or federal antitrust laws;
(8) Deliberately or willfully submitted false or misleading information in connection with the application for or performance of a public contract;
(9) Been debarred from bidding on or participating in a contract with any state or federal agency.
When the Director reasonably believes that grounds for debarment exist, the Director must send the contractor a notice of proposed debarment indicating the grounds for the proposed debarment and the procedure for requesting a hearing.  The hearing must be conducted in accordance with the Administrative Procedure Act.  If the contractor does not request a hearing in the specified manner, the Director must issue the debarment decision without a hearing and must notify the contractor of the decision by certified mail, return receipt requested.
The Director must determine the length of a debarment period and may rescind a debarment at any time upon notification to the contractor.  During a debarment period, a contractor is not eligible to bid for or participate in any contract for a public improvement, but after the debarment period expires, the contractor is eligible to bid for and participate in contracts for public improvements.
Through the Office of the State Architect, the Director is required to maintain a list of all contractors currently debarred under these provisions.  Any governmental entity awarding a contract for construction of a public improvement may use a contractor's presence on the debarment list to determine whether a contractor is responsible or best as may be required in the award of a contract.
Office of Information Technology
(R.C. 125.041 and 125.18)
The act establishes the Office of Information Technology that is to be housed within the Department of Administrative Services (DAS).  The Office is to be under the supervision of a chief information officer (CIO) who must serve as the director of the Office.  The CIO must be appointed by the Governor and is subject to removal at the pleasure of the Governor.
The CIO is required to advise the Governor regarding the superintendence and implementation of statewide information technology policy.  The CIO also must lead, oversee, and direct state agency activities related to information technology development and use.[3]  In that regard, the CIO must do all of the following: The Office is permitted to make contracts for, operate, and superintend technology supplies and services for state agencies, and the act confers on the Office the same authority DAS has, under specified purchasing of supplies and services statutes, for the purchase of information technology supplies and services for state agencies.  The Office also may establish cooperative agreements with federal and local government agencies and state agencies that are not under the authority of the Governor for the provision of technology services and the development of technology projects.
Changes to the Fleet Management Law
(R.C. 125.831 and 125.832)
Overview of continuing law
Continuing law requires the Director of Administrative Services to establish and operate a fleet management program for purposes including, but not limited to, cost-effective acquisition, maintenance, management, analysis, and disposal of all motor vehicles owned or leased by the state.  It also grants the Department of Administrative Services (DAS) exclusive authority over the acquisition and management of all motor vehicles used by state agencies. 
Changes in definitions
Formerly, a "motor vehicle" for purposes of the Fleet Management Law generally was defined as any automobile, car minivan, passenger van, sport utility vehicle, or pickup truck with a gross vehicle weight under 12,000 pounds.  The act continues to so define a "motor vehicle" but also includes a cargo van within the definition for purposes of the Fleet Management Law.
Continuing law excludes from that definition of "motor vehicle" any vehicle mentioned above that is used by a law enforcement officer and law enforcement agency.  Former law relatedly defined "law enforcement officer" as an officer, agent, or employee of a state agency upon whom, by statute, a duty to conserve the peace or to enforce all or certain laws is imposed and the authority to arrest violators is conferred, within the limits of that statutory duty and authority.  The act modifies the definition of "law enforcement officer" by specifying that it does not include an officer, agent, or employee as described above if the officer's, agent's, or employee's duty and authority is location specific.  Thus, a vehicle used by such an officer, agent, or employee is no longer excluded from the definition of a "motor vehicle" covered by the Fleet Management Law because it is not a vehicle used by a "law enforcement officer" and law enforcement agency.
The Fleet Management Law formerly defined "state agency" to mean every organized body, office, or agency established by the laws of Ohio for the exercise of any function of state government, other than (1) a state-supported institution of higher education, (2) the offices of the Governor, Lieutenant Governor, Auditor of State, Treasurer of State, Secretary of State, or Attorney General, (3) the General Assembly or any legislative agency, or (4) the courts or any judicial agency.  The act modifies this definition to mean every organized body, office, board, authority, commission, or agency established by the laws of Ohio for the exercise of any governmental or quasi-governmental function of state government regardless of the funding source for that entity, other than continuing law's four categories of exempt entities mentioned above and, as added by the act, any state retirement system or retirement program established by or referenced in the Revised Code.  Thus, this definitional change at the same time adds to, and removes from, the state agencies subject to the Fleet Management Law.  The term "state-supported institution of higher education" also becomes "state institution of higher education" under the act (see more detail below).
Acquisitions under DAS' master leasing program
Under continuing law, DAS' exclusive authority over the acquisition and management of all motor vehicles used by state agencies includes approving the purchase or lease of each motor vehicle for use by a state agency and determining whether a motor vehicle will be leased or purchased for that use.  The act generally requires that, on and after July 1, 2005, each state agency acquire all passenger motor vehicles under DAS' master leasing program.  If DAS determines, however, that acquisition under this program is not the most economical method and if DAS and the state agency can provide economic justification for doing so, DAS may approve the purchase, rather than the lease, of a passenger motor vehicle for the acquiring state agency.
Limit on reimbursement for state employees who use their personal vehicles
The act requires the Director to adopt rules that prohibit the reimbursement of state employees who use their own motor vehicles for any mileage they incur above an amount that DAS must determine annually, unless reimbursement for the excess mileage is approved by DAS in accordance with standards for that approval the Director must establish in those rules.
Requirements for state institutions of higher education
Under the act, not later than each September 15, each state institution of higher education must report to DAS on all of the following topics relating to motor vehicles that it acquires and manages:  (1) the methods it uses to track the motor vehicles, (2) whether or not it uses a fuel card program to purchase fuel for, or to pay for the maintenance of, the motor vehicles, and (3) whether or not it makes bulk purchases of fuel for the motor vehicles.  Assuming that it does not use the fleet management tracking, fuel card program, and bulk fuel purchases tools and services that DAS provides, the report also must include (a) an analysis of the amount the institution would save, if any, if it were to use the fleet management tracking, fuel card program, and bulk fuel purchases tools and services that DAS provides instead of the fleet management system the institution regularly uses and (b) a rationale for either continuing with the fleet management system that the institution regularly uses or changing to the use of those tools and services that DAS provides.
Within 90 days after receipt of all annual reports from state institutions of higher education, DAS must prepare and certify a list of those institutions that it determines would save amounts if they were to use the fleet management tracking, fuel card program, and bulk fuel purchases tools and services that DAS provides.  The institutions so certified then must use those tools and services until DAS next certifies state institutions of higher education as required by the act.
The act defines "state institution of higher education" for purposes of the Fleet Management Law to mean each of the four-year state universities, the Northeastern Ohio Universities College of Medicine, the Medical University of Ohio at Toledo, and each community college, state community college, university branch, or technical college.
Disposition of proceeds derived from sale of motor vehicles
Former law required that the proceeds derived from the disposition of any motor vehicles under the Fleet Management Law be paid (1) to the fund that originally provided money for the purchase or lease of the motor vehicles or (2) if the motor vehicles were originally purchased with money derived from the General Revenue Fund (GRF), to the credit of the Fleet Management Fund created under continuing law.  The act maintains requirement (1) above but instead requires that, if motor vehicles were originally purchased with money derived from the GRF, the proceeds be deposited, in the discretion of the Director, to the credit of either the Fleet Management Fund or the Investment Recovery Fund created by continuing law.  The Investment Recovery Fund receives proceeds from the transfer, sale, or lease of excess and surplus supplies no longer needed by state agencies (R.C. 125.14(A)--not in the act).
Additional motor vehicles included in the fleet reporting system
Continuing law requires the Director to establish and maintain a fleet reporting system and correspondingly to require state agencies (see definition above) to submit to DAS information relative to state motor vehicles, to be used in operating the fleet management program.  The act requires state agencies to submit information not only with respect to state "motor vehicles" covered by the Fleet Management Law (see definition above) but also relative to state motor vehicles excluded from the definition of those covered "motor vehicles," namely (1) motor vehicles used by law enforcement officers and law enforcement agencies and (2) motor vehicles that are equipped with specialized equipment that is not normally found in a vehicle and that is used to carry out a state agency's specific and specialized duties and responsibilities.
Purchases of supplies and services of persons with disabilities
State Use Committee--background
(R.C. 4115.31 to 4115.35)
Temporarily continuing law (see below "transfer" and "termination" discussion) provides for the creation of a state committee for the purchase of products and services provided by persons with severe disabilities (commonly referred to as the "State Use Committee").  The State Use Committee must adopt rules under the Administrative Procedure Act that require the Committee to take various actions that have the goal of promoting the purchase by specified governmental entities of products and services of persons with severe disabilities.[4]  Among those actions are determining products and services that are suitable for procurement by specified governmental entities, putting those products and services on a procurement list the Committee must establish, maintain, and publish, and verifying the fair market price for the products and services. 
Temporarily continuing law generally requires any state agency, instrumentality of the state, or political subdivision that intends to purchase any product or service to examine the procurement list and, if the product or service it intends to purchase is on the list and available, to procure it from an agency for persons with severe disabilities.  Purchases made in this manner are not subject to competitive bidding requirements.
Former law provided that a subordinate named by the Director of Mental Retardation and Developmental Disabilities (MRDD) was to be the Committee's executive director and that the Director of MRDD had to furnish other staff and clerical assistance, office space, and supplies required by the Committee.
Transfer of State Use Committee functions to DAS
(R.C. 4115.32 and Sections 203.12, 203.12.01, and 209.09.06)
In general.  The act provides that, effective July 1, 2005, or the earliest date after that date permitted by law, the State Use Committee becomes part of the Department of Administrative Services (DAS).  The Committee's functions, assets, and liabilities, including its records, are to be transferred to DAS, and then (1) DAS is to become the successor to, assume the obligations of, and otherwise constitute the continuation of the Committee and (2) the duties of the Committee's executive director are transferred to DAS.  The DAS Director must designate a subordinate to act as the Committee's executive director.
On-going business, rights, and rules.  The act provides that any business commenced but not completed by the Committee on June 30, 2005, must be completed by DAS in the same manner and with the same effect as if completed by the Committee.  No validation, cure, right, privilege, remedy, obligation, or liability is lost or impaired by reason of the transfer.
All of the Committee's rules, orders, and determinations will continue in effect as rules, orders, and determinations of DAS, until modified or rescinded by DAS.  If necessary to ensure the integrity of the Ohio Administrative Code, the Director of the Legislative Service Commission must renumber the Committee's rules to reflect the transfer.
Employees.  Department of Mental Retardation and Developmental Disabilities employees designated as staff for the Committee will be transferred to DAS.  The transferred employees will retain their positions and all benefits, subject to the statutory law governing layoffs and provisions of union contracts between the state and all bargaining units affected.
Pending proceedings and actions.  The transfer does not affect judicial or administrative actions or proceedings pending on July 1, 2005, to which the Committee is a party.  Those actions or proceedings instead must be prosecuted or defended in the DAS Director's name.  On application to the court or other tribunal, the DAS Director must be substituted as a party for the Director of MRDD.
Office of Procurement from Community Rehabilitation Programs
(R.C. 125.11, 125.60 to 125.6012, 127.16, 307.86, 731.14, 731.141, 4115.32, 4115.34, and 4115.36)
Overview.  After the transfer to DAS of the functions of the State Use Committee--in particular, its program for the purchase of products and services of persons with severe disabilities, the act provides for the termination of the Committee and that program and their replacement with the Office of Procurement from Community Rehabilitation Programs and a program to promote the procurement of supplies and services of persons with work-limited disabilities.
Creation of the Office; termination of the State Use Committee.  The act provides that, not later than July 1, 2007, the DAS Director must establish the Office of Procurement from Community Rehabilitation Programs (OPCRP) within DAS.  The Director also must designate a DAS employee as administrator of the OPCRP. 
The act correspondingly provides that not later than July 1, 2007, the Director must abolish the State Use Committee and its program for the purchase of products and services of persons with severe disabilities.  Abolition of the Committee will make all the laws governing the Committee no longer effective.
Key definitions.  The OPCRP purchase program provides for the purchase by government ordering offices of supplies or services provided by persons with a work-limiting disability who are employed by a community rehabilitation program.  The act defines a "government ordering office" as any of the following:  (1) any state agency, including the General Assembly, the Ohio Supreme Court, and the office of a state elected official, or any state authority, board, bureau, commission, institution, or instrumentality that is funded in total or in part by state money, or (2) a county, township, or village.  "Person with a work-limiting disability" is defined by the act as an individual who has a disability as described in the federal Americans with Disabilities Act and who (1) because of that disability is substantially limited in the type or quantity of work the individual can perform or is prevented from working regularly, and (2) meets the criteria established by OPCRP.[5]  Finally, the act defines a "community rehabilitation program" as an agency that (1) is organized under federal or Ohio law such that no part of its net income inures to the benefit of any shareholder or other individual, (2) is certified as a sheltered workshop, if applicable, by the Wage and Hour Division of the U.S. Department of Labor, (3) is registered and in good standing with the Ohio Secretary of State as a domestic nonprofit corporation, (4) complies with applicable occupational health and safety standards required by federal or Ohio law, (5) operates in the interest of persons with work-limiting disabilities, provides vocational or other employment-related training to persons with work-limiting disabilities, and employs persons with work-limiting disabilities in the manufacture of products or the provision of services, and (6) is a nonprofit corporation for federal tax purposes.
Purchases from the procurement list.  The act requires the OPCRP to establish, maintain, and periodically update a procurement list of approved supplies and services available from qualified nonprofit agencies or their agents (see below).  Government ordering offices, before purchasing any supply or service, must determine whether the supply or service is on the procurement list.  And, if the supply or service is on the list at a fair market price established by the OPCRP (see below), the government ordering office must purchase it from the qualified nonprofit agency or an approved agent offering it for sale at that price.  If the supply or service is on the procurement list but a fair market price has not been established, the government ordering office must attempt to negotiate an agreement with one or more of the listed qualified nonprofit agencies or approved agents.
Fair market price.  The act provides that, prior to purchases by government ordering offices under its provisions, the OPCRP must attempt to establish for each item (i.e., supply or service) on the procurement list a fair market price that is representative of the range of prices that a government ordering office would expect to pay to purchase the item in the marketplace.  When establishing a fair market price for an item, the OPCRP must consider the cost of doing business with respect to that item, including sales, marketing, and research and development costs and agent fees.  If the OPCRP cannot establish a fair market price as described above, it must put the item on the list and let a government ordering office and qualified nonprofit agency negotiate the price.  If the negotiations produce an agreement, the OPCRP may accept the agreed upon price as the fair market price.  If an agreement is not successfully negotiated in such a case, the OPCRP may establish a fair market price or release the government ordering office from the act's requirements (see further "release" discussion below).
Qualified nonprofit agencies and approved agents.  The act permits a community rehabilitation program to apply to the OPCRP to be certified as qualified to provide its supplies and services for procurement by government ordering offices.  The OPCRP must prescribe the form of the application, and, if it is satisfied that an applicant program is qualified, it must certify the program as a qualified nonprofit agency for the purposes of the purchasing program outlined in the act.  The act also gives DAS the authority to structure or regulate competition among qualified nonprofit agencies for the overall benefit of the OPCRP purchase program.
Under the act, the OPCRP may certify any entity to serve as an approved agent of a qualified nonprofit agency for purposes of the OPCRP purchase program.  The OPCRP must prescribe procedures under which an entity can apply and be considered for that certification.  An approved agent can do any of the following:  (1) contract with the OPCRP to provide centralized business facilitation or other assistance to qualified nonprofit agencies (however, the OPCRP must consult with qualified nonprofit agencies before agreeing to such a contract), (2) act as a distributor of supplies and services registered on the procurement list, and (3) provide marketing, administrative, and other services related to sales.
DAS fee for purchases.  The act provides that all government ordering offices purchasing supplies and services from qualified nonprofit agencies or their approved agents must reimburse DAS a reasonable sum to cover its costs in administering the OPCRP purchase program.  DAS is permitted to bill administrative costs to government ordering offices directly, or allow qualified nonprofit agencies or their approved agents to collect and remit the fees.  Any fee collected and remitted by qualified nonprofit agencies or their approved agents will be considered allowable expenses in addition to the fair market price.  All fees collected under these provisions must be deposited in the state treasury to the credit of DAS' General Services Fund.
Release from compliance with OPCRP purchase program.  The act provides that when a government ordering office and a qualified nonprofit agency or approved agent are negotiating a price and they cannot come to an agreement, instead of setting a fair market price, the OPCRP may release the government ordering office from compliance with the OPCRP purchase program.
It also provides that the OPCRP, on its own or pursuant to a request from a government ordering office, may release a government ordering office from compliance with the OPCRP purchase program.  If the OPCRP determines that compliance is not possible or not advantageous, or if conditions prescribed in rules adopted by the OPCRP for granting a release are met, it may grant such a release.  That release must be written, specify the supplies or services to which it applies, state how long it will be effective, and state the reason for which it is granted.
Nonapplicability of OPCRP purchase program.  The act provides that the OPCRP purchase program does not apply to the purchase of a product or service available from a state agency, state instrumentality, or political subdivision under any law in effect on July 1, 2005.  It also specifies that the program does not prohibit the purchase of a supply or service from a qualified nonprofit agency by a political subdivision that is not a government ordering office.
Competitive selection nonapplicability.  The act makes it clear that purchases under the OPCRP purchase program by a government ordering office are not subject to any competitive selection requirements.  It also specifies that purchases made by any of the following political subdivisions that are not government ordering offices from a qualified nonprofit agency or its approved agent are exempt from any competitive selection procedures otherwise required by law:  municipal corporations, school districts, conservancy districts, township park districts, metropolitan park districts, regional transit authorities, regional airport authorities, regional water and sewer districts, port authorities, and any other political subdivision approved by DAS to participate in DAS "pooled" supply or service purchase contracts.  Finally, a political subdivision of the type listed in the previous sentence is prohibited from purchasing supplies or services from another party or political subdivision instead of through the OPCRP purchase program if the supplies or services are on the procurement list, even if it can get the supplies or services at a lower price.
Other OPCRP duties and powers.  The act provides that the OPCRP, in addition to its previously described functions, must or may do all of the following: Provision of information to OPCRP.  The act requires a government ordering office and qualified nonprofit agency to provide the necessary information and documentation requested by the OPCRP to enable it to effectively administer the purchase program.
Cooperation with other governmental agencies.  The act provides that the Department of MRDD, Department of Mental Health, Department of Job and Family Services, Rehabilitation Services Commission, and any other state or governmental agency or community rehabilitation program responsible for the provision of rehabilitation and vocational educational services to persons with work-limiting disabilities may cooperate, through written agreement, in providing resources to DAS for the operation of the OPCRP.  The resources may include leadership and assistance in dealing with the societal aspects of meeting the needs of persons with work-limiting disabilities.
The act also permits the OPCRP and all governmental entities that administer socioeconomic programs to enter into contractual agreements, cooperative working relationships, or other arrangements that are necessary for the effective coordination and realization of the objectives of these entities.
Temporary work levels and personnel assignments for employees exempt from the Collective Bargaining Law
(Section 569.03)
Under continuing codified law, whenever an employee is assigned to work in a higher-level position for a continuous period of more than two weeks but not more than two years because of a vacancy, the employee may be paid at a rate approximately 4% higher than the employee's current base pay rate.  The Director of Administrative Services must approve the temporary position change.  (R.C. 124.181(J)--not in the act.)
Under the act, notwithstanding that codified law, in cases where a vacancy does not exist, an appointing authority, with the written consent of an exempt employee (see below), may assign duties of a higher classification for not more than two years to the exempt employee.  The exempt employee must receive compensation commensurate with the duties of the higher classification.  The act utilizes continuing law's definitions of (1) "appointing authority"--an officer, commission, board, or body having the power of appointment to, or removal from, positions in any office, department, commission, board, or institution, and (2) "exempt employee"--a permanent full-time or permanent part-time employee paid directly by warrant of the Auditor of State whose position is included in the job classification plan of the Department of Administrative Services but who is not considered a public employee for the purposes of the Collective Bargaining Law.
The act also permits employees who are exempt from the Collective Bargaining Law and who are assigned to duties within their agency to maintain operations during the Ohio Administrative Knowledge System implementation, to agree to a temporary assignment for more than two years if necessary--notwithstanding the codified law referred to above.
Department of Administrative Services' recommendations for a state government reorganization plan
(Section 315.04)
The act would have required the Department of Administrative Services to do both of the following: (1) begin, within 30 days after the provisions' effective date, developing recommendations for a state government reorganization plan focused on increased efficiencies in the operation of state government and a reduced number of state agencies and (2) present its recommendations to the House Speaker, Senate President, and House and Senate Minority Leaders by not later than January 1, 2007.  (VETOED.)
DEPARTMENT OF AGING


Penalty for late payment of annual long-term care facility bed fee
(R.C. 173.26)
Continuing law, unaltered by the act, requires a nursing home, residential care facility, adult care facility, adult foster home, or other specified long-term care facility to annually pay to the Ohio Department of Aging (ODA) a fee of $6 for each bed the facility maintained for use by a resident during any part of the previous year.  The funds are used to pay the costs of operating regional long-term care ombudsperson programs.  The act requires ODA to assess a penalty on long-term care facilities that fail to pay the bed fee not later than 90 days after the deadline established by ODA rules.  The penalty is an amount equal to a facility's total annual bed fee. 
Penalty for denial of ombudsperson access to long-term care facilities or community-based long-term care sites
(R.C. 173.99(C); R.C. 173.19 (not in the act))
The Office of the State Long-Term Care Ombudsperson Program, through the State Long-Term Care Ombudsperson and the Regional Long-Term Care Ombudsperson Programs, must receive, investigate, and attempt to resolve complaints made by long-term care facility residents, recipients, sponsors, providers of long-term care, or any person acting on behalf of a resident or recipient relating to health, safety, civil rights, or residents' rights issues.  Each complaint is assigned to a representative of the Office who is responsible for investigating and working with the parties to resolve the complaint.  To carry out these responsibilities, a representative has the right to access long-term care facilities and community-based long-term care sites unescorted as reasonably necessary to investigate a complaint.  The act permits ODA to assess a penalty, not to exceed $500 for each violation, against a long-term care provider, other entity, or person employed by the provider or entity that denies a representative of the Program access to a long-term care facility or community-based long-term care site.
Certification for provision of community-based long-term care services
(R.C. 173.39 to 173.393)
The act requires ODA to certify providers of community-based long-term care services[6] under programs ODA administers and, subject to certain exceptions, prohibits ODA from paying a person or government entity for providing community-based long-term care services under such a program unless the provider is certified to provide the services and provides the services.  ODA may, however, pay a non-certified person or government entity for providing community-based long-term care services if the provider meets the terms of a contract that includes conditions of participation and service standards and the contract is not for Medicaid-funded services, other than services provided under the Program of All-Inclusive Care for the Elderly (PACE).[7]
ODA is required to adopt rules in accordance with Ohio's Administrative Procedure Act (R.C. Chapter 119.) establishing certification requirements.  The rules must establish procedures for ensuring that PASSPORT agencies comply with criminal background check requirements under the law governing the PASSPORT Program and evaluating the services provided by persons and government entities seeking or holding a certificate to ensure they are provided in a quality manner advantageous to the individual receiving the services.
Evaluation considerations
The act requires that ODA consider the following during the evaluation of a provider:
(1) Provider's experience and financial responsibility;
(2) Provider's ability to comply with standards of the community-based long-term care services program;
(3) Provider's ability to meet the needs of individuals served;
(4) Any other factor ODA considers relevant.
The act provides that, in general, records of an evaluation are public records and must be made available on the request of any person.  The act, however, prohibits the release of a part of a record of an evaluation as a public record if the release of the part would violate federal or state law.
Disciplinary action and enforcement
The act authorizes ODA to take disciplinary action against a provider.  ODA must adopt rules setting standards for determining which type of disciplinary action to take.  The act requires the rules to specify the reasons for taking disciplinary action, including disciplinary actions based on good cause, and for misfeasance, malfeasance, nonfeasance, confirmed abuse or neglect, financial irresponsibility, or other conduct of the provider ODA determines is injurious to the health or safety of individuals being served.

ODA is authorized to take the following types of disciplinary actions:
(1) Issue a written warning;
(2) Require submission of a plan of correction;
(3) Suspend referrals;
(4) Remove clients;
(5) Impose a fiscal sanction, such as a civil monetary penalty or an order that unearned funds be repaid;
(6) Revoke the provider's certificate;
(7) Impose another sanction.
The act requires ODA to hold hearings when there is a dispute between ODA or its designee and a provider concerning actions ODA or its designee takes or does not take regarding certification or disciplinary proceedings.  This does not apply, however, if the disciplinary action is issuing a written warning or requiring the submission of a plan of correction.
Rules governing contracts and payments
ODA is required by the act to adopt rules concerning contracts between ODA, or ODA's designee, and persons and government entities regarding community-based long-term care services provided under a program ODA administers.  ODA must also adopt rules concerning ODA's payments for such services.
Long-term care consultation program
Background
The Revised Code provides for several different types of assessments of persons applying or intending to apply for admission to a nursing facility.[8]  The Ohio Department of Job and Family Services (ODJFS), or an agency designated by ODJFS, is authorized to assess any person who is not an applicant for or recipient of Medicaid who applies or intends to apply to a nursing facility to determine whether the person is in need of nursing facility services and whether an alternative source of long-term care is more appropriate for the person in meeting the person's physical, mental, and psychosocial needs than admission to the facility to which the person has applied (R.C. 5101.75 and 5101.751).  In addition, ODJFS may require an applicant for or recipient of Medicaid who applies or intends to apply for admission to a nursing facility to undergo an assessment to determine whether the person needs the level of care provided by a nursing facility (R.C. 5101.754, 5111.204, and 5111.205).
Overview
In general, the act transfers from ODJFS to ODA, the authority to provide assessments of non-Medicaid recipients, modifies the nature of those assessments by including a "long-term care consultation,"[9] and expands the population that must be given the assessments (R.C. 173.42 and 173.43 and repeal of R.C. 5101.751 and 5101.753).  It also revises the law governing assessments of Medicaid recipients by ODJFS (R.C. 5111.204 and repeal of R.C. 5101.754 and 5111.205).
Duty to perform assessments
(R.C. 173.42(B) and (C) and 5101.75(B))
Under prior law, ODJFS was permitted to assess a person applying or intending to apply for admission to a nursing facility who was not an applicant for or recipient of Medicaid to determine whether the person was in need of nursing facility services and whether an alternative source of long-term care was more appropriate for the person in meeting the person's physical, mental, and psychosocial needs than admission to the facility to which the person has applied.  Each assessment was to be performed by ODJFS or an agency designated by ODJFS.
The act requires ODA to develop a long-term care consultation program whereby individuals or their representatives are provided with information through professional consultations about options available to meet long-term care needs and about factors to consider in making long-term care decisions.  ODA may enter into a contract with an area agency on aging or other entity under which the long-term care consultation program for a particular area is administered by the area agency on aging or other entity pursuant to the contract; otherwise, the program is to be administered by ODA.
Information to be provided; assessment of individual's functional capabilities
(R.C. 173.42(E), (F), and (J))
Under the act, the information provided through a long-term care consultation must be appropriate to the individual's needs and situation.  The information must address the following:
(1) The availability of any long-term care options open to the individual;
(2) Sources and methods of both public and private payment for long-term care services;
(3) Factors to consider when choosing among the available programs, services, and benefits;
(4) Opportunities and methods for maximizing independence and self-reliance, including support services provided by the individual's family, friends, and community.
An individual's long-term care consultation may include an assessment of the individual's functional capabilities.  It also may incorporate portions of determinations required to be made by the Department of Mental Health or the Department of Mental Retardation and Developmental Disabilities[10] and may be provided concurrently with the assessment required to be made by ODJFS (see "Level-of-care assessments to receive Medicaid nursing facility services," below).
At the conclusion of a consultation, ODA or the program administrator under contract with ODA must provide the individual or the individual's representative with a written summary of options and resources available to meet the individual's needs.  And even though the summary may specify that a source of long-term care other than care in a nursing facility is appropriate and available, the individual is not required to seek an alternative source and may be admitted to or continue to reside in a nursing facility.
Individuals to be provided consultations; exemptions
(R.C. 173.42(G) and (I))
Under the act a long-term care consultation may be provided for nursing facility residents who have not applied and have not indicated an intention to apply for Medicaid.  The purpose of these consultations is to determine continued need for nursing facility services, to provide information on alternative services, and to make referrals to alternative services.
But, the act requires long-term care consultations to be provided to the following:
(1) Individuals who apply or indicate an intention to apply for admission to a nursing facility, regardless of the source of payment to be used for such care;
(2) Residents of nursing facilities who apply or indicate an intention to apply for Medicaid;
(3) Residents who are likely to "spend down" their resources within six months after admission to a level that qualifies them financially for Medicaid;
(4) Any individual who requests a long-term care consultation.
The act exempts certain individuals from the long-term care consultation requirement.  The exemptions largely parallel exemptions in prior law, but differ in the following ways:
(1) The act exempts an individual from the requirement if the individual or the individual's representative chooses to forego participation in the consultation pursuant to criteria specified in rules adopted under the act.
(2) The act eliminates the exemption regarding a person placed in the nursing facility in order to provide temporary relief to the person's primary caregiver.[11]
(3) The act additionally exempts an individual who is seeking admission to a facility that is not a nursing facility with a provider agreement under the Medicaid Law.
(4) The act exempts any individual who is to be transferred from another nursing facility.
(5) The act exempts any individual who is to be readmitted to a nursing facility following a period of hospitalization.
(6) The act eliminates the exemption based on the failure of a timely assessment.
Time frame for completion of consultations
(R.C. 173.42(H))
When a long-term care consultation is required, the act requires it to be provided as follows:
(1) If the individual for whom the consultation is being provided has applied for Medicaid and the consultation is being provided concurrently with the assessment required to be made by ODJFS (see "Level-of-care assessments to receive Medicaid nursing facility services," below), the consultation must be completed in accordance with the applicable time frames specified in the Medicaid law for providing a level of care determination based on the assessment.
(2) In all other cases, the consultation must be provided not later than five calendar days after ODA, or the program administrator under contract with ODA, receives notice that (a) the individual has applied or has indicated an intention to apply for admission to a nursing facility or (b) if the individual is a resident of a nursing facility, the individual has applied or has indicated an intention to apply for Medicaid.
An individual or the individual's representative may request that a long-term care consultation be provided on a date that is later than that required under (1) or (2), above.  Also, if a consultation cannot be completed within the required time frames, ODA or the program administrator may (a) exempt the individual from the consultation pursuant to rules adopted under the act, (b) in the case of an applicant for admission to a nursing facility, provide the consultation after the individual is admitted to the facility, or (c) in the case of a resident of a nursing facility, provide the consultation as soon as practicable.
Who may perform assessments
(R.C. 173.42(D), 173.43, 5101.75(B), and 5101.752 and 5101.751 (repealed))
The act requires the long-term care consultations to be provided by individuals certified by ODA.  The Director of ODA is required to adopt rules in accordance with the Administrative Procedure Act (R.C. Chapter 119.) governing the certification process and requirements.  The rules must specify the education, experience, or training in long-term care a person is to have to qualify for certification.  The act repeals the authority of ODJFS to designate another agency to provide the assessments, and ODA is given no analogous designation authority.
Authority to fine nursing facilities
(R.C. 173.42(K) and (M) and 5111.62)
The act, in a manner similar to prior law, prohibits any nursing facility for which an operator has a provider agreement under the Medicaid law from admitting or retaining any individual as a resident, unless the nursing facility has received evidence that a long-term care consultation has been completed for the individual or that the individual is exempt from the long-term care consultation requirement.  The act transfers from the Director of ODJFS to the Director of ODA the authority to fine a nursing facility an amount determined by rule if the facility violates this prohibition.  All fines collected are to be deposited into the state treasury to the credit of the Residents Protection Fund.
Rulemaking
(R.C. 173.42(L))
Under the act, the Director of ODA is authorized to adopt any rules the Director considers necessary for the implementation and administration of the act's long-term care consultation provisions.  The rules must be adopted in accordance with the Administrative Procedure Act and may specify all of the following:
(1) Procedures for performing long-term care consultations;
(2) Information to be provided through long-term care consultations regarding long-term care services that are available;
(3) Criteria for identifying nursing facility residents who would benefit from the provision of a long-term care consultation;
(4) Criteria under which an individual or the individual's representative may choose to forego participation in a long-term care consultation;
(5) Criteria for exempting individuals from the long-term care consultation requirement;
(6) Circumstances under which it may be appropriate to provide an individual's consultation after the individual's admission to a nursing facility.
Plan for providing home and community-based services
(R.C. 5101.573 (repealed))
The act repeals a provision under which ODJFS or an agency designated by ODJFS could develop a plan for provision of home and community-based services to a person if the recommendation resulting from the assessment is that home and community-based services are appropriate for the person.
Level-of-care assessments to receive Medicaid nursing facility services
Individuals to be assessed
(R.C. 5111.204(B))
Continuing law authorizes ODJFS to require an applicant for or recipient of Medicaid who applies or intends to apply for admission to a nursing facility to undergo an assessment to determine whether the applicant or recipient needs the level of care provided by a nursing facility.
The act expands this provision to also apply to an applicant for or recipient of Medicaid who resides in a nursing facility.  In addition, the act specifies that the assessment may be performed concurrently with a long-term care consultation performed by ODA.
Who may perform assessments
(R.C. 5101.754 and 5111.204(B) and (G))
Prior law permitted ODJFS to designate another agency to conduct assessments.  Under the act, ODJFS may instead enter into contracts in the form of interagency agreements with one or more other state agencies to perform the assessments.  The interagency agreements must be in accordance with Medicaid law provisions governing interagency agreements to administer one or more components of the Medicaid program.  The interagency agreements must specify the responsibilities of each agency in the performance of the assessments.
Level of care determinations
(R.C. 5111.204 (C) and (D))
The act adds an additional category of assessment:  a level of care determination.  Under the act, ODJFS or the contracting agency must provide a level of care determination based on the assessment as follows:
(1) In the case of a person applying or intending to apply for admission to a nursing facility while hospitalized, not later than (a) one working day after the person or the person's representative submits the application or notifies ODJFS of the person's intention to apply and submits all information required for providing the level of care determination or (b) a later date requested by the person or the person's representative.
(2) In the case of a person applying or intending to apply for admission to a nursing facility who is not hospitalized, not later than (a) five calendar days after the person submits an application for Medicaid or notifies ODJFS of the person's intention to apply and submits all information required for providing the level of care determination or (b) a later date requested by the person or the person's representative.
(3) In the case of a person who resides in a nursing facility, not later than (a) five calendar days after the person or the person's representative submits an application for medical assistance and submits all information required for providing the level of care determination, or (b) a later date requested by the person or the person's representative.
(4) In the case of an emergency, within the number of days specified by ODJFS rules.
The act also removes a provision that provided for partial assessments to be conducted (existing R.C. 5111.204(C), (D), (E), and (H)).
Appeals
(R.C. 5111.204(D))
The act retains a law that permits a person assessed or the person's representative to appeal the conclusions reached by ODJFS or the contracting agency on the basis of the assessment, but rephrases the provision to refer to requesting "a state hearing to dispute the conclusions" rather than referring to an "appeal."  The act requires that the state be represented in any requested state hearing by ODJFS or the contracting agency, whichever performed the assessment.
Rulemaking
(R.C. 5111.204(F))
The act revises law authorizing the Director of ODJFS to adopt rules to implement and administer the assessment provision as follows:
(1) It eliminates partial assessments.
(2) It requires that the rules set forth circumstances that constitute an "emergency" and the number of days within which a level of care determination must be provided in the case of an emergency.
(3) It eliminates specific criteria that must be included in rules establishing criteria and procedures to be used in determining whether admission to a nursing facility or continued stay in a nursing facility is appropriate for the person being assessed.
(4) It makes conforming changes to reflect the other changes in the act.
Plan for providing home and community-based services
(R.C. 5111.205 (repealed))
The act repeals a provision under which ODJFS or the designated agency, whichever performed the assessment, could develop a plan for provision of home and community-based services to that person if the recommendation resulting from the assessment was that home and community-based services were appropriate for the person assessed.
Nursing home and residential care facility survey
(R.C. 173.44 and 173.99(D))
The act authorizes ODA to conduct an annual survey of nursing homes and residential care facilities.[12]  The survey is to include questions about capacity, occupancy, and private pay charges related to the facilities.  ODA may work with an outside entity to conduct the survey and analyze the results.  The results and analysis of the survey are to be made available to the General Assembly, other state agencies, nursing home and residential care facility providers, and the public.
A nursing home or residential care facility that recklessly fails to complete the survey is subject to a $100 fine.
Long-Term Care Consumer Guide
Background
(former R.C. 173.45 to 173.59 and R.C. 173.02; O.A.C. Chapter 173-45)
Am. Sub. H.B. 95 of the 125th General Assembly, the biennial operating budget for fiscal years 2004 and 2005, repealed provisions that required ODA to publish the Ohio Long-Term Care Consumer Guide, a guide to Ohio nursing homes.  Prior law required the Guide to be made available on the Internet and updated periodically.  Every two years, ODA was required to publish an Executive Summary of the Guide, which had to be available in electronic and printed media.  In addition, prior law specified that, to the extent possible, annual customer satisfaction surveys had to be conducted for use in the Guide.  ODA was permitted to charge the nursing home a fee of up to $400 for each annual survey.  The Guide has continued to be published pursuant to ODA rules, but the statutory provisions were eliminated.
The act
(R.C. 173.45 to 173.49)
The act enacts new statutory provisions governing publication of an Ohio Long-Term Care Consumer Guide, conduct of customer satisfaction surveys, and the fee relating to the surveys.
Authorization to publish and content of Guide.  The act requires ODA to develop and publish a guide to long-term care facilities for use by individuals considering long-term care facility admission and their families, friends, and advisors.[13]  This Ohio Long-Term Care Consumer Guide may be published in printed form or in electronic form for distribution over the Internet.  The Guide may be developed as a continuation or modification of the rule-authorized Guide currently published by ODA.
The Guide must include information on each long-term care facility in Ohio.  For each facility, the Guide must include the following information, as applicable to the facility:
(1) Information regarding the facility's compliance with Ohio statutes and rules and federal statutes and regulations;
(2) Information generated by the United States Department of Health and Human Services Centers for Medicare and Medicaid Services from the quality measures developed as part of its nursing home quality initiative;
(3) Results of customer satisfaction surveys;
(4) Any other information ODA specifies by rule.
Customer satisfaction surveys.  For purposes of publishing the Guide, ODA must conduct or provide for the conduct of an annual customer satisfaction survey of each long-term care facility.  The act specifies that each long-term care facility must cooperate in the conduct of the survey (but does not specify a penalty for non-compliance).  The results of the surveys may include information obtained from long-term care facility residents, their families, or both.
Fees and the Long-Term Care Consumer Guide Fund.  ODA may charge fees for the conduct of annual customer satisfaction surveys.  ODA may contract with any person or government entity to collect the fees on its behalf.  The fees may not exceed the following amounts:
(1) $400 for the customer satisfaction survey of a long-term care facility that is a nursing home;
(2) $300 for the customer satisfaction survey pertaining to a long-term care facility that is a residential care facility.
Fees paid by a long-term care facility that is a "nursing facility" must be reimbursed through the Medicaid Program.[14]
The act creates in the state treasury the Long-Term Care Consumer Guide Fund.  Money collected from the fees charged for the conduct of customer satisfaction surveys must be deposited in the state treasury and credited to the Fund.  ODA must use money in the Fund for costs associated with publishing the Guide, including, but not limited to, costs incurred in conducting or providing for the conduct of customer satisfaction surveys.
Rules.  The act authorizes ODA to adopt rules under the Administrative Procedure Act (R.C. Chapter 119.) to implement and administer the provisions relating to the annual surveys and the publication of the Long-Term Care Consumer Guide.
Transfer of PACE administrative duties
(R.C. 173.50; Section 490.03)
The Program of All-Inclusive Care for the Elderly (PACE) is a Medicaid component based on a managed care model through which certain sites provide frail, older adults with all of their needed health care and ancillary services in acute, subacute, institutional, and community settings.  Enrollment is voluntary, and once enrolled, PACE becomes the sole source of all Medicare and Medicaid covered services and other items or medical, social, or rehabilitation services the PACE interdisciplinary team determines an enrollee needs.  If a participant requires placement in a nursing home, PACE is responsible and accountable for the care and services provided and must regularly evaluate the participant’s condition.[15]
To be eligible for PACE, a person must:

Currently, Ohio has two PACE sites: TriHealth SeniorLink located in Cincinnati and Concordia Care in Cleveland Heights.[17]
Am. Sub. H.B. 95 of the 125th General Assembly (Section 59.19) authorized the Director of ODJFS to submit an amendment to the state Medicaid Plan asking the United States Secretary of Health and Human Services for permission to transfer the day-to-day administration of PACE to ODA.  This act also provided that if the Secretary approved the amendment, the Directors of ODJFS and ODA could enter into an interagency agreement to transfer responsibility and appropriation authority for administrative expenses for PACE.
As of February 15, 2005, the plan amendment was still under review by the Secretary.  If the amendment is approved, an effective date of December 10, 2004, will apply.[18]  In anticipation of approval, the act requires ODA, pursuant to an interagency agreement, to carry out the day-to-day administration of PACE.  ODA must carry out the administrative duties in accordance with the interagency agreement and all applicable federal laws, including the Social Security Amendments of 1965.[19]  The act grants rulemaking authority to ODA as long as the rules:  (1) are authorized by rules adopted by ODJFS and (2) address only issues that are not already addressed by ODJFS rules for the PACE program.  The act repeals Section 59.19 of Am. Sub. H.B. 95 of the 125th General Assembly; the Director of ODJFS has submitted the amendment request to the Secretary and therefore, this provision is no longer needed.
Transferring individuals from nursing facilities to PASSPORT
(Section 206.66.64)
The act provides that on a monthly basis, each Area Agency on Aging must determine whether individuals who reside in the area served by the Area Agency are on a waiting list for the PASSPORT Program and were admitted to a nursing facility during the previous month.  If the Area Agency determines that any individual meets both criteria, the Area Agency is required to contact the Long-Term Care Consultation Program administrator for that area.
The act then requires the administrator to determine whether PASSPORT is appropriate for the individual and whether the individual would rather receive PASSPORT services than continue to reside in a nursing facility.  If the administrator determines that the individual should receive PASSPORT services, the administrator is required to contact ODA.  Upon receipt of the notice from the administrator, ODA is required to approve the enrollment of the individual in the PASSPORT Program regardless of that individual's place on the PASSPORT waiting list.  
The act requires that the Director of ODJFS submit to the U.S. Secretary of Health and Human Services an amendment to the Medicaid waiver authorizing the PASSPORT Program if necessary to implement this provision. 
The act also requires the Director to submit to the General Assembly by not later than December 31, 2006, a report regarding the number of individuals placed in the PASSPORT Program as a result of the Area Agencies on Aging determinations and the costs incurred and savings achieved as a result of the individuals' being placed in the PASSPORT Program under this provision.
PASSPORT Evaluation Panel
(Section 203.21.06)
The Governor vetoed a provision that would have created the PASSPORT Evaluation Panel to oversee the performance of an evaluation of the PASSPORT Program conducted by an independent contractor.[20]  The act would have required the Panel to establish criteria to be used in selecting an independent contractor to evaluate the PASSPORT Program, accept and evaluate bids from potential contractors in accordance with the request for proposals process administered by the Department of Administrative Services, and select a contractor that meets the criteria established by the Panel.
The act would have required the independent contractor selected by the Panel to conduct the evaluation of the PASSPORT Program in accordance with specified criteria and issue to the Panel quarterly reports.  Then, by not later than May 15, 2007, issue a final report of its findings.  By not later than June 30, 2007, the Panel was to have approved a final report.
Aging and disability resource centers
(Section 203.21.09)
The Aging and Disability Resource Center Grant Initiative is a program, jointly offered by the federal Administration of Aging (AoA) and Centers for Medicare and Medicaid Services (CMS), that offers states the opportunity to establish Aging and Disability Resource Centers that provide public education, information, counseling, access to public programs and coordination with other programs, and assistance with prospective planning to help people plan ahead for long-term services and support.  AoA and CMS offer each state up to $800,000 for a period of three years, to establish such centers and programs.  To date, 24 states have received these grants.[21]
The act requires that ODA apply for the Aging and Disability Resource Center Grant Initiative and to create an Aging and Disability Resource Center beginning in fiscal year 2006 if the application is accepted.  The act also requires that ODJFS endorse ODA's application to the extent required by the invitation to apply.
Ambulette service providers solely serving ODA
(R.C. 4766.09, 4766.14, 4766.15 (not in the act); Section 612.12)
The act provides that ambulette service providers are not required to meet the requirements of the Medical Transportation Law during the period of time on any day the provider is solely serving ODA or ODA's designee.[22]  Under the act, the Medical Transportation Law applies to an ambulette service provider at any time the ambulette service provider is not solely serving ODA or ODA's designee.
The act creates new requirements for ambulette service providers who are exempted from the Medical Transportation Law under the act.  These ambulette service providers must do all of the following:
(1) Make available to all ambulette drivers while operating ambulette vehicles a means of two-way communication using either ambulette vehicle radios or cellular telephones;
(2) Equip every ambulette vehicle with one isolation and biohazard disposal kit that is permanently installed or secured in the vehicle's cabin;
(3) Before hiring an applicant, obtain all of the following:
(a) A signed statement from a licensed physician that the applicant does not have any impairment or medical condition that could interfere with safe driving, passenger assistance, and emergency treatment activity or could jeopardize the health and welfare of a client or the general public;
(b) The results of a chemical test for drug and alcohol abuse;
(c) Certificates of completion of CPR and first aid courses;
(d) The results of a criminal records check.
The act prohibits an ambulette service provider from employing an applicant as an ambulette driver if the applicant has six or more points on the applicant's driving record.
The act requires that ODA enforce the above provisions and specifies that these provisions go into immediate effect.
DEPARTMENT OF AGRICULTURE


Family Farm Loan Program

(R.C. 122.011; Sections 403.11 and 403.12)
Under former law, the Family Farm Loan Program was scheduled to expire on October 15, 2005.  The act extends the expiration date to October 15, 2007, and changes all statutory dates with regard to that Program accordingly.
Animal Health and Food Safety Fund
(R.C. 901.43)
Former law created the Animal Industry Laboratory Fund and the Laboratory Services Fund in the state treasury.  The act combines those two funds and names the combined fund the Animal Health and Food Safety Fund.  Under the act, moneys that were deposited into the two separate funds instead are required to be deposited into the combined fund.  Those moneys are collected by the Director of Agriculture from fees generated:  (1) by a laboratory service performed by the Department of Agriculture and related to the diseases of animals, (2) for the inspection and accreditation of laboratories and laboratory services related to the diseases of animals, (3) by a laboratory service performed by the consumer analytical laboratory, and (4) for the inspection and accreditation of laboratories and laboratory services not related to weights and measures or the diseases of animals.
Under the act, the Director may use moneys in the combined fund for the same purposes that were designated for moneys in the two separate funds.  Those purposes are to pay the expenses necessary to operate the animal industry laboratory and the consumer analytical laboratory, including the purchase of supplies and equipment for both laboratories.
Creation of Laboratory and Administrative Support Fund
(R.C. 901.44)
The act creates the Laboratory and Administrative Support Fund in the state treasury.  The Department of Agriculture must deposit the following moneys received by the Department to the credit of the Fund:  payment for the rental of the Department's auditoriums by outside parties and reimbursement for related utility expenses, laboratory fees that are not designated for deposit into another fund, and other miscellaneous moneys that are not designated for deposit into another fund.  The Department may use moneys in the Fund to pay costs associated with any program of the Department as the Director of Agriculture sees fit.
Permits for concentrated animal feeding facilities
(R.C. 903.05 (in the act) and 903.01, 903.02, and 903.03 (not in the act))
Introduction
Continuing law prohibits a person from modifying an existing or constructing a new concentrated animal feeding facility without first obtaining a permit to install from the Director of Agriculture.  Likewise, continuing law prohibits a person from operating a concentrated animal feeding facility without a permit to operate issued by the Director.  "Concentrated animal feeding facility" means an animal feeding facility with a total design capacity equal to or more than the specified number of animals in various categories.  Those numbers range from 700 to 125,000 depending on the type of animals and, for certain types of animals, whether the facility uses a liquid manure handling system.  "Animal feeding facility" generally means a lot, building, or structure where both of the following conditions are met:  (1) agricultural animals have been, are, or will be stabled or confined and fed or maintained there for a total of 45 days or more in any 12-month period, and (2) crops, vegetative forage growth, or post-harvest residues are not sustained in the normal growing season over any portion of the lot, building, or structure.
Background information requirements
Law retained in part by the act.  Law retained in part by the act requires each application for a permit to install or permit to operate that is submitted by an applicant who has not operated a concentrated animal feeding facility in Ohio for at least two of the five years immediately preceding the submission of the application to be accompanied by information concerning other concentrated animal feeding facilities that the owner or operator of the proposed new or modified concentrated animal feeding facility has operated or is operating, including information concerning certain past liability and past violations involving those other facilities.  The Director may deny the permit application if the background information reveals a history of substantial noncompliance with environmental laws.
The act.  The act makes two changes to the background information requirements.  First, it expands the scope of the background information that must be submitted to the Director by an applicant for a permit to install or permit to operate who has not operated a concentrated animal feeding facility in Ohio for at least two of the five years immediately preceding the submission of the application by requiring such an applicant to submit information concerning all animal feeding facilities of any size that the applicant has operated or is operating rather than information concerning only the concentrated animal feeding facilities that the applicant has operated or is operating as in prior law.
Second, the act creates an exemption from the background information requirements for certain permit applicants.  Generally, a permit to install or permit to operate is not required under continuing law for an animal feeding facility that has a total design capacity that is less than the number of animals enumerated in the definition of "concentrated animal feeding facility."  However, under certain circumstances generally involving pollution of the waters of the state, an animal feeding facility with a smaller total design capacity can be required to obtain a permit to install or permit to operate.  The act exempts from the background information requirements such smaller facilities by specifying that the requirements apply only to an application involving a concentrated animal feeding facility.
Fertilizer license, registration, and tonnage report schedule
(R.C. 905.32, 905.33, 905.331, and 905.36; Section 203.24.03)
Continuing law requires each person who manufactures or distributes any type of fertilizer in Ohio to obtain an annual fertilizer manufacturing or distribution license from the Department of Agriculture.  Further, a person who engages in the businesses of blending custom mixed fertilizer for use on lawns, golf courses, recreation areas, or other real property that is not used for agricultural production must obtain a nonagricultural production custom mixed fertilizer blender license from the Director of Agriculture.  Under former law, the licenses were valid from July 1 of a given year through June 30 of the subsequent year.  A renewal application for a license had to be submitted no earlier than June 1 and no later than June 30 of each year.  A person who submitted a renewal application for a license after June 30 had to include with the application a late filing fee of $10.
The act changes the annual schedule for obtaining fertilizer manufacturing and distribution licenses and nonagricultural production custom mixed fertilizer blender licenses.  Under the act, all licenses are valid for one year beginning on December 1 of a calendar year through November 30 of the following calendar year.  A renewal application must be submitted no later than November 30 each year.  A person who submits a renewal application for a license after November 30 must include with the application a late filing fee of $10.  With regard to licenses for which applications for the license period beginning July 1, 2005, have been submitted prior to the act's effective date, a license must be issued for a period beginning on July 1, 2005, and ending on November 30, 2005, and must expire on November 30, 2005.
Law unchanged by the act prohibits any person from distributing a specialty fertilizer in Ohio until it is registered by the manufacturer or distributor with the Department.  Formerly, all registrations expired on June 30 of each year.  The act instead provides that all registrations are valid for one year beginning on December 1 of a calendar year through November 30 of the following calendar year.  With regard to registrations of a specialty fertilizer for which applications for the registration period beginning July 1, 2005, have been submitted prior to the act's effective date, a registration must be issued for the period beginning on July 1, 2005, and ending on November 30, 2005, and must expire on November 30, 2005.
Continuing law requires every licensee or registrant to file a statement that includes the number of net tons or metric tons of fertilizer distributed to nonlicensees or nonregistrants in Ohio by grade, packaged, bulk, dry, or liquid.  Under prior law, the statements were semiannual and were due within 30 days after June 30, and within 30 days after December 31 of each calendar year.  The act instead requires a tonnage report to be submitted to the Director annually instead of semiannually.  Under the act, the tonnage report must be filed on or before November 30 of each calendar year and must include data from the period beginning on November 1 of the year preceding the year in which the report is due through October 31 of the year in which the report is due.  A person who is required to submit a tonnage report within 30 days of June 30, 2005, under the former semiannual tonnage reporting system must submit the report by that date.  However, the person also must submit a tonnage report by November 30, 2005 for the period beginning on July 1, 2005, and ending on October 31, 2005.
Fertilizer inspection fee
(R.C. 905.36)
Under law retained in part by the act, a licensee or registrant under the Fertilizer Law must pay to the Director for all fertilizers distributed in Ohio an inspection fee at the rate of 12¢ per ton or 13¢ per metric ton.  The act increases the fee to 25¢ per ton and 28¢ per metric ton.  The fee must be paid at the time the annual tonnage report is submitted (see above).  Under law generally unchanged by the act, if a tonnage report is not filed or payment of inspection fees is not made within ten days after the due date, a penalty of $50 or 10% of the amount due, whichever is greater, must be assessed.  Under the act, the penalty must be assessed if the report is not filed or payment is not made on or before November 30 of the applicable calendar year.
Annual fertilizer sales statement
(R.C. 905.37)
Under law retained in part by the act, the Director of Agriculture must distribute annual statements of fertilizer sales by grades of materials and mixed fertilizer by counties in a manner prescribed by the Director.  Further, the Director must publish at least annually a report of the analysis of fertilizers inspected.  The act makes the distribution of the annual statements and the publishing of the annual report discretionary rather than mandatory.
Merger of funds
(R.C. 905.38, 905.381, 905.50, 905.66, 907.16, and 923.46)
Former law created the Commercial Feed, Fertilizer, and Lime Inspection and Laboratory Fund, which was used by the Director to administer and enforce the Fertilizer Law and the Livestock Feeds Law.  It also created the Seed Fund, which was used by the Director to administer and enforce the Agricultural Seed Law.  The act merges these funds to create the Commercial Feed, Fertilizer, Seed, and Lime Inspection and Laboratory Fund and requires it to be used to administer and enforce all of the above Laws.
Prohibition against regulation of fertilizer and seed by political subdivisions
(R.C. 905.501 and 907.111)
Ongoing law prohibits a political subdivision from regulating the application of fertilizer, or requiring a person licensed or registered under the state statutes governing fertilizers to obtain a license or permit to operate in a manner described in those statutes or to satisfy any other condition except as provided by a statute or rule of this state or of the United States.  "Political subdivision" means a county, township, or municipal corporation and any other body corporate and politic that is responsible for government activities in a geographic area smaller than that of the state.  The act expands the activities that political subdivisions cannot regulate to include the registration, packaging, labeling, sale, storage, distribution, and use of fertilizers.
In addition, the act prohibits a political subdivision from enacting, adopting, or continuing in effect local legislation relating to the registration, packaging, labeling, sale, storage, distribution, use, or application of fertilizers.  "Local legislation" is defined to include, but be not limited to, an ordinance, resolution, regulation, rule, motion, or amendment that is enacted or adopted by a political subdivision.
Similar to the above prohibition against regulation of fertilizer by political subdivisions, the act prohibits regulation of seed by political subdivisions.  It specifies that the Department of Agriculture has sole and exclusive authority to regulate the registration, labeling, sale, storage, transportation, distribution, notification of use, use, and planting of seed within the state.  It then states that the regulation of seed is a matter of general statewide interest that requires uniform statewide regulation and that the Agricultural Seed Law and rules adopted under it constitute a comprehensive plan with respect to all aspects of the regulation of seed within Ohio.
Under the act, no political subdivision can do any of the following:
(1) Regulate the registration, labeling, sale, storage, transportation, distribution, notification of use, use, or planting of seed;
(2) Require a person who has been issued a permit or license under the Agricultural Seed Law to obtain a permit or license to operate in a manner described in that Law or to satisfy any other condition except as provided by a statute or rule of this state or of the United States; or
(3) Require a person who has registered a legume innoculant under the Agricultural Seed Law to register that innoculant in a manner described in that Law or to satisfy any other condition except as provided by a statute or rule of this state or of the United States.
The act also prohibits a political subdivision from enacting, adopting, or continuing in effect local legislation relating to the permitting or licensure of any person who is required to obtain a permit or license under the Agricultural Seed Law or to the registration, labeling, sale, storage, transportation, distribution, notification of use, use, or planting of seed.
Pesticide registration and inspection fee
(R.C. 921.02 and 921.16; Section 203.24.03)
Under continuing law, no person may distribute a pesticide within Ohio unless the pesticide is registered with the Director.  Law changed in part by the act requires that each applicant for a registration must pay a registration and inspection fee established by rule for each product name and brand registered for the company whose name appears on the label.  If an applicant files a renewal of a registration after the deadline established by rule or if a person distributes an unregistered pesticide in Ohio, the applicant or person must pay a penalty fee established by rule for each product name and brand registered for the applicant.  The act replaces the registration and inspection fee established by rule with a statutory fee of $150 and changes the penalty for late registration or distribution of an unregistered pesticide from an amount established by rule to a statutory fee of $75.  The changes are effective on January 1, 2007.  Until that date, the fees established by rule remain in effect.[23]
Under former law, the aggregate amount of the fees initially established by rule had to be designed to cover, but not exceed, the costs incurred by the Department of Agriculture in administering the Pesticides Law and could not be increased without the approval of the General Assembly.  The act eliminates this provision.
Commercial feed inspection fee
(R.C. 923.44)
Under law changed in part by the act, the first distributor of a commercial feed must pay the Director of Agriculture a semiannual inspection fee at the rate of 10¢ per ton, with a minimum payment of $10, on all commercial feeds distributed by him in this state.  The act changes the fee to 25¢ per ton and establishes the minimum payment at $25.
Commercial feed report
(R.C. 923.45)
Under law generally retained by the act, the Director is required to publish at least annually information concerning the sale of commercial feed and a comparison of the analyses of official samples of commercial feeds distributed in Ohio with the guaranteed analyses on the label.  The act makes annual publishing of the information discretionary rather than mandatory.
Agricultural Commodity Handlers Law definitions
(R.C. 926.01)
Law largely unchanged by the act defines several terms for the purposes of the Agricultural Commodity Handlers Law.  The act revises the definitions for two of those terms.  Under former law, the definition of "agricultural commodity handling" or "handling" included in part the engaging in or participating in the business of purchasing an agricultural commodity for sale, resale, processing, or for any other use in the following volumes:
(1) In the case of purchases made from producers, more than 30,000 bushels annually;
(2) In the case of purchases made from agricultural commodity handlers, more than 100,000 bushels annually;
(3) In the case of total purchases made from producers combined with total purchases made from handlers, more than 100,000 bushels annually.
The act revises that portion of the definition by specifying instead that it includes engaging in or participating in the business of purchasing from producers agricultural commodities for any use in excess of 30,000 bushels annually rather than engaging in or participating in the business of purchasing an agricultural commodity for sale, resale, processing, or any other use in the volumes discussed above.
Under continuing law, "agricultural commodity handler" or "handler" means any person who is engaged in the business of agricultural commodity handling.  Former law specified that it did not include a person who did not handle agricultural commodities as a bailee and who purchased agricultural commodities in the following volumes:
(1) 30,000 or fewer bushels annually from producers;
(2) 100,000 or fewer bushels annually from agricultural commodity handlers.
Also under former law, a person who did not handle agricultural commodities as a bailee and who annually purchased 30,000 or fewer bushels of agricultural commodities from producers and 100,000 or fewer bushels of agricultural commodities from agricultural commodity handlers had to be considered to be an agricultural commodity handler if the combined annual volume of purchases from the producers and the agricultural commodity handlers exceeded 100,000 bushels.
The act removes from the definition the exclusion of a person who did not handle agricultural commodities as a bailee and who purchased agricultural commodities in volumes of 30,000 or fewer bushels annually from producers or 100,000 or fewer bushels annually from agricultural commodity handlers unless the combined annual volume of purchases from producers and handlers exceeded 100,000 bushels.
Plant pests program fee
(R.C. 927.69)
Law retained by the act establishes a fee for the inspection of agricultural products and their conveyances under the Plant Pests Law.  Formerly, the fee was $65.  The act changes the fee to an amount equal to the hourly rate of pay in the highest step in the pay range, including fringe benefits, of a plant pest control specialist multiplied by the number of hours worked by such a specialist in conducting an inspection.
Metrology and Scale Certification Fund
(R.C. 1327.511)
The act changes the name of the Scale Certification Fund to the Metrology and Scale Certification Fund.
Cannery license fee
(R.C. 913.02)
Continuing law prohibits a person, firm, or corporation from engaging in the business of operating a cannery without obtaining a license for the operation of each cannery from the Director of Agriculture.  In order to obtain a license, an application must be made on a form prescribed by the Director and must be accompanied by a fee.  Under former law, the fee was $100.  Similarly, the fee for an annual license renewal was $100.  The act increases the cannery license fee and license renewal fee from $100 to $200.
Soft drink manufacturing or bottling and sale of syrup or extract fees
(R.C. 913.23)
Continuing law prohibits a person from manufacturing or bottling for sale within Ohio any soft drink in closed containers unless the person has a license issued by the Director of Agriculture.  Upon receipt of an application for a license, the Director must examine the products and the place of manufacture where the business is to be conducted to determine whether the products and place comply with the statutes governing soft drink bottling.  Upon finding there is compliance, and upon payment of a license fee, the Director must issue a license authorizing the applicant to manufacture or bottle for sale such soft drinks.  Formerly, the fee was $100.  The act increases the annual license fee to $200.
Similarly, continuing law states that no soft drink that is manufactured or bottled out of the state can be sold or offered for sale within this state unless the soft drink and the plant in which the soft drink is bottled are found by the Director to comply with the statutes governing soft drink bottling and are registered by the Director.  The act also requires that the plant in which such a soft drink is manufactured comply with those statutes.  Law changed in part by the act establishes an annual $100 registration fee for out-of-state soft drink manufacturers or bottlers.  The act increases the annual fee to $200.
However, ongoing law provides that registration of out-of-state soft drink manufacturers or syrup and extract manufacturers is not required if a reciprocal agreement is in effect whereby a soft drink manufacturer or syrup and extract manufacturer located in this state is not subject to a license or registration fee by another state or a political subdivision of it.  The act retains the exemption and adds that the exemption also applies to out-of-state bottlers.
Continuing law prohibits a person, other than a manufacturer holding a valid soft drink plant license, from selling, offering for sale, using, or possessing with the intent to sell any soda water syrup or extract or soft drink syrup, to be used in making, drawing, or dispensing soda water or other soft drinks, without registering annually with the Director of Agriculture and paying a license fee.  Under former law, the fee was $50.  The act increases the annual license fee to $100.  In addition, the act extends the exemption from registration and payment of the fee to a bottler holding a valid soft drink plant license.
Cold-storage warehouse operation license fee
(R.C. 915.02)
Law retained in part by the act requires an applicant for an annual license to operate a cold-storage warehouse to pay a $100 fee to the Director of Agriculture before the Director issues the license.[24]  The act increases the fee to $200.
Food locker establishment operation license fee
(R.C. 915.16)
Law largely unchanged by the act requires an applicant who wishes to operate an establishment in Ohio to obtain an annual license from the Department of Agriculture and to pay a fee of $25 for the license.[25]  The act increases the fee to $50.
Certificates of health and freesale
(R.C. 915.24 and 3715.04)
The act authorizes the Director of Agriculture, upon the request of a food processing establishment, manufacturer of over-the-counter drugs, or manufacturer of cosmetics, to issue a certificate of health and freesale after determining that conditions at the establishment or place of business of the manufacturer, as applicable, have been found to be sanitary through an inspection conducted pursuant to the Pure Food and Drug Law.  For each certificate issued, the Director must charge the establishment or manufacturer a fee of $20.  The act requires the Director to deposit all such fees that are collected to the credit of the continuing Food Safety Fund and adds the fees to the list of moneys that comprise that Fund.
The act defines "certificate of health and freesale" as a document issued by the Director that certifies to states and countries receiving products that the products have been produced and warehoused in Ohio under sanitary conditions at a food processing establishment or at a place of business of a manufacturer of over-the-counter drugs or cosmetics, as applicable, that has been inspected by the Department of Agriculture.  Other names of documents that are synonymous with "certificate of health and freesale" include, but are not limited to, "sanitary certificate of health and freesale," "certificate of origin," "certificate of freesale," "certificate of health and origin," "certificate of freesale, sanitary and purity," and "certificate of freesale, health and origin." 
The act defines "food processing establishment," by reference to continuing law, as a premises or part of a premises where food is processed, packaged, manufactured, or otherwise held or handled for distribution to another location or for sale at wholesale.  "Food processing establishment" includes the activities of a bakery, confectionery, cannery, bottler, warehouse, or distributor, and the activities of an entity that receives or salvages distressed food for sale or use as food.  "Food processing establishment" does not include a cottage food production operation; a processor of maple syrup who boils sap when a minimum of 75% of the sap used to produce the syrup is collected directly from trees by that processor; a processor of sorghum who processes sorghum juice when a minimum of 75% of the sorghum juice used to produce the sorghum is extracted directly from sorghum plants by that processor; or a beekeeper who jars honey when a minimum of 75% of the honey is from that beekeeper's own hives.
Wine tax diversion to Ohio Grape Industries Fund

(R.C. 4301.43)
Continuing law imposes a tax on the distribution of wine, vermouth, and sparkling and carbonated wine and champagne at rates ranging from 30¢ per gallon to $1.48 per gallon.  From the taxes paid, a portion is credited to the Ohio Grape Industries Fund for the encouragement of the state's grape industry, and the remainder is credited to the General Revenue Fund.  Under former law, the amount credited to the Ohio Grape Industries Fund was scheduled to decrease from 3¢ to 1¢ per gallon on July 1, 2005.  The act extends the extra 2¢ earmarking through June 30, 2007.
Amusement rides
Permit fee
(R.C. 1711.53)
Under continuing law, the Department of Agriculture charges a fee for an annual amusement ride permit.  Under former law, the fee was $50.  The act increases the permit fee to $150.
Funding report by Advisory Council on Amusement Ride Safety
(R.C. 1711.52)
Under continuing law, the Advisory Council on Amusement Ride Safety must perform certain duties.  The act adds to these duties by requiring the Council to prepare and submit a report, not later than December 31, 2006, to the Governor, Speaker and Minority Leader of the House of Representatives, President and Minority Leader of the Senate, and Director of Agriculture concerning the Council's recommendations for alternative funding sources for the Amusement Ride Safety Program.
Requirements for electrical connections
(R.C. 1711.531)
The act prohibits a person from operating an amusement ride powered from an electric light company source unless the amusement ride operates through a fusible switch, enclosed circuit breaker, or panelboard that has been:
(1) Rated by the Underwriters Laboratories for service entrance applications;
(2) Installed in compliance with the National Electrical Code;
(3) Metered through a meter installed by the electric light company.  "Electric light company" has the same meaning as in public utility law.
Under the act, an amusement ride owner cannot use an electric light company source as described above unless the owner has written certification that the fusible switch, enclosed circuit breaker, or panelboard satisfies the requirements established by the act and that is issued by a person certified under the Electrical Safety Inspection Law or licensed under the Construction Industry Examining Board Law.  The owner must make the certificate available to the Director of Agriculture upon request.
The act specifies that the electrical requirements established under it do not apply to either of the following types of amusement rides:
(1) Rides that do not require electrical current; or
(2) Rides that the Director exempts in rules the Director adopts.
It further specifies that a person licensed under the Construction Industry Examining Board Law, when conducting an electrical connection inspection under the act, is not violating the Electrical Safety Inspection Law.

STATE BOARD OF EXAMINERS OF ARCHITECTS


Imposition of fines against certificate holders
(R.C. 4703.15)
Under continuing law, the State Board of Examiners of Architects may deny renewal of, revoke, or suspend any certificate of qualification to practice architecture or any certificate of authorization, if the certificate holder engages in specified practices or violates the Board's rules governing the standards of service, conduct, and practice of architects.  The act permits the Board, in addition to those disciplinary actions specified, to impose a fine against a certificate holder.  The fine may be not more than $1,000 for each offense, but cannot exceed $5,000 regardless of the number of offenses the certificate holder has committed between the time the fine is imposed and the time any previous fine was imposed.
OHIO ATHLETIC COMMISSION


Authority to issue, deny, suspend, or revoke boxing or wrestling match or exhibition permits
(R.C. 3773.34, 3773.38, 3773.39, and 3773.57)
Under continuing law, the Ohio Athletic Commission may issue, deny, suspend, or revoke permits to hold prize fights and public boxing or wrestling matches or exhibitions.  When the Commission receives a permit application, the Commission must determine if the applicant holds a valid promoter's license, if the contestants in the match or exhibition are evenly and fairly matched, and whether the applicant is financially responsible and able to pay the contestants.  If the Commission determines the requirements are met, the Commission must issue a permit.
The Commission may require the applicant to deposit, before the match or exhibition, an amount estimated to be equal to the amount that the applicant will pay the contestants following the match or exhibition.  If the applicant fails to make the deposit if it is required, the Commission may revoke the applicant's permit.
The act allows the Commission's Executive Director to also perform all of the functions described above when authorized by the Commission to do so.
Under ongoing law, the Commission cannot issue a permit if the Commission determines that the municipal corporation or township where an applicant wants to hold a match or exhibition prohibits such matches or exhibitions.  The act applies this same prohibition to the Executive Director.
Alternative sites and substitute contestants for boxing or wrestling matches or exhibitions
(R.C. 3773.40)
Under continuing law, the Commission may allow a permit holder to substitute contestants and to hold a match or exhibition for which a permit was already issued at an alternative site within the same municipal corporation or township under specified conditions.  The act allows the Commission's Executive Director, when authorized by the Commission, to also perform these functions.
ATTORNEY GENERAL


Investigation of election-related criminal activity by the Bureau of Criminal Identification and Investigation
(R.C. 109.54)
The act authorizes the Bureau of Criminal Identification and Investigation of the Office of the Attorney General to investigate criminal activity in Ohio related to the conduct of elections when requested to do so by the Secretary of State.
Removal of Chief Justice from the Crime Victims Assistance Advisory Committee
(R.C. 109.91)
The Crime Victims Assistance Advisory Committee established under preexisting law within the Office of the Attorney General:  (1) advises the Attorney General's Crime Victims Assistance Office in determining crime and delinquency victim service needs and policies and in improving and exercising leadership in the quality of crime and delinquency victim programs and (2) reviews and recommends to the Crime Victims Assistance Office the victim assistance programs that should be considered for the receipt of state financial assistance.  Formerly, the Committee consisted of a chairperson appointed by the Attorney General, 15 members appointed by the Attorney General from specified categories of persons, and four ex officio nonvoting members.  The ex officio nonvoting members were the Chief Justice of the Supreme Court, the Attorney General, a member of the Senate designated by the President of the Senate, and a member of the House of Representatives designated by the Speaker of the House.  The act removes the Chief Justice from the Committee.
Debts owed to the state
Time at which debts must be certified to the Attorney General for collection
(R.C. 131.02)
Under preexisting law, unchanged by the act except for the special rule described in the next sentence, whenever any amount owed to the state is not paid within 45 days after payment is due, the public official responsible for administering the law under which the debt arose must certify the amount due to the Attorney General for collection.  The act provides a special rule for certification of an unpaid amount payable by a student enrolled in a state institution of higher education--under the act, that amount must be certified to the Attorney General for collection within the later of 45 days after the amount is due or the tenth day after the beginning of the next academic session following the session for which the amount is payable.
The act would have specified when various classes of debts would have fallen due for the purpose of when they would have had to have been certified to the Attorney General under the provisions described above, but the provisions containing the specification were vetoed by the Governor.  Under the vetoed provisions of the act, a payment would have been due at whichever of the following times applied with respect to the debt:
(1) If a law of Ohio, including an administrative rule, prescribed the time a payment was required to be made or reported, when payment was required by that law to be paid or reported;
(2) If the payment was for services rendered, when the rendering of the service was completed;
(3) If the payment was reimbursement for a loss, when the loss was incurred;
(4) In the case of a fine or penalty for which a law or administrative rule did not prescribe a time for payment, when the fine or penalty was first assessed;
(5) If the payment arose from a legal finding, judgment, or court adjudication order, when the finding, judgment, or order was rendered or issued;
(6) If the payment arose from an overpayment of money by the state to another person, when the overpayment was discovered;
(7) The date on which the amount for which an employee of a corporation or business trust was personally liable under the motor fuel tax, sales tax, or personal income tax laws was determined;
(8) Upon proof of a claim being filed in a bankruptcy case; or
(9) Any other appropriate time determined by the officer, employee, or agent responsible for administering the law under which the debt arose on the basis of statutory requirements or the business processes of the agency to which the debt is owed.
Under the vetoed provisions, if more than one of the times specified in (1) to (9) above applied with respect to a debt, the debt would have fallen due for purposes of when they would have had to have been certified to the Attorney General for collection at the earliest of the applicable times.
Sale of final overdue claims to any person
(R.C. 131.022--vetoed)
The act would have enacted provisions that would have authorized the Attorney General to sell or otherwise transfer to any person certain claims arising from debts that are certified to the Attorney General for collection, pursuant to the provision described above in "Time at which debts must be certified to the Attorney General for collection," but the provisions were vetoed in their entirety.  Under the vetoed provisions, the Attorney General could have sold or otherwise transferred such a claim to any person at any time after it had become a "final overdue claim."  If the claim was to be sold, it could have been sold by private negotiated sale or at "public auction" conducted by the Attorney General or a designee, as the Attorney General believed was most likely to yield the most favorable return on the sale.  The Attorney General could have consolidated any number of final overdue claims for sale under the provisions.
Under the vetoed provisions, not less than 60 days before first offering a final overdue claim for sale, the Attorney General would have been required to provide written notice, by ordinary mail, to the person owing the claim (the debtor) at that person's last known mailing address.  The notice would have been required to state the nature and amount of the claim and the manner in which the debtor could have contacted the Attorney General to arrange terms to pay the claim.  The notice also would have been required to state that, if the debtor did not contact the Attorney General within 60 days after the date the notice was issued and arrange terms to pay the claim, then the claim would have been offered for sale to a private party for collection by that party by any legal means, the debtor would have been deemed to have been denied any right to seek and obtain a refund of any amount from which the claim arose if the applicable law otherwise allowed for such a refund; and the debtor would have been deemed to waive any right the debtor may have had to confidentiality of information regarding the claim to the extent it was provided under any other Revised Code section.
Under the vetoed provisions, upon the sale or transfer of a final overdue claim under the provisions, the claim would have become the property of the purchaser or transferee, and could have been sold or otherwise transferred to any other person or otherwise disposed of.  The owner of the claim would have been entitled to all proceeds from the collection of the claim.  Purchasers or transferees of a final overdue claim would have been subject to applicable laws governing collection of debts of the kind represented by the claim.  Upon the sale or transfer of a final overdue claim, no refund could have been issued or paid to the debtor for any part of the amount from which the claim arose.
The vetoed provisions specified that, notwithstanding any other Revised Code provision, the Attorney General, solely for the purpose of selling or transferring a final overdue claim under the provisions, could have disclosed information about the debtor that otherwise would have been confidential under a Revised Code section, and the debtor would have had no right of action against such disclosure to the extent such a right was available under that section.
Finally, the vetoed provisions would have specified that the authority granted under the provisions would have been supplemental to the authority granted under the provision described above in "Time at which debts must be certified to the Attorney General for collection."
The vetoed provisions specified that, as used in those provisions:
(1) A "final overdue claim" would have been a claim that had been certified to the Attorney General, that had been "final" for at least one year, and for which no arrangements had been made for the payment thereof or, if such arrangements had been made, the debtor had failed to comply with the terms of the arrangement for more than 30 days.  "Final overdue claim" would have included collection costs incurred with respect to such a claim and assessed by the Attorney General, interest accreting to the claim, and fees.
(2) "Final" would have meant a claim had been finalized under the law providing for the imposition or determination of the amount due, and any time provided for appeal of the amount, legality, or validity of the claim had expired without an appeal having been filed in the manner provided by law.  "Final" would have included, but would not have been limited to, a final determination of the Tax Commissioner for which the time for appeal had expired without a notice of appeal having been filed.
Sale of claims due the state:  confidentiality of information in claim
(R.C. 131.02)
Continuing law provides that if the Attorney General finds, after investigation, that any claim due and owing to the state is uncollectible, the Attorney General, with the consent of the chief officer of the agency reporting the claim may, among other things, sell, convey, or otherwise transfer the claim to one or more private entities for collection.  The act provides that if information contained in a claim that is sold, conveyed, or transferred is confidential under federal law or a section of the Revised Code that implements a federal law governing confidentiality, that information remains subject to that law during and following the sale, conveyance, or transfer.
Review of state agencies' debt collection procedures
(Section 503.03)
The act requires that, sometime during 2005, the Auditor of State examine the compliance of each state agency with the requirements set forth in R.C. 131.02, as amended by the act (see "Time at which debts must be certified to the Attorney General for collection") with respect to collecting debts owed to them and certifying delinquent debts to the Attorney General for collection.  Specifically, under the act, the Auditor must examine:
(1) The practices and procedures used by the agency to collect claims before the claims are certified to the Attorney General under the section;
(2) The number of individuals employed by the agency or engaged under contract with the agency in 2003 and 2004 whose only, or primary, duty is to collect debts owed to the agency; and
(3) With respect to claims certified to the Attorney General under the section in 2003 and 2004, the average number of days elapsing between the last day for timely payment of the claims and the day the agency certified the claim.
For purposes of completing the Auditor's examination, the Auditor may request a state agency to provide reports to the Auditor on the matters described above.  The act requires that state agencies provide the reports within 60 days after the request; however, the Auditor may extend the time providing the report for up to another 60 days for good cause.
The act requires the Auditor, on or before March 31, 2006, to submit a written report on the Auditor's findings under the provisions described above to the Governor, the Speaker of the House of Representatives, the President of the Senate, and the Legislative Service Commission.
Funding the Ohio Peace Officer Training Academy
(R.C. 109.79)
Under preexisting law, unchanged by the act, the Ohio Peace Officer Training Academy provides training for law enforcement officers of any political subdivision or the State Public Defender's office.  To fund the Academy, the Ohio Peace Officer Training Commission is required to determine tuition costs that are sufficient in the aggregate to pay the costs of operating the Academy.  The costs of acquiring and equipping the Academy are paid from designated General Assembly appropriations or from gifts or grants received for that purpose.  The act additionally allows fees for goods related to the Academy to be used for acquiring and equipping the Academy.
OHIO STATE BARBER BOARD


Annual review of Barber Board's rules
(R.C. 4709.05)
Under continuing law, the Barber Board is required to adopt rules concerning sanitary conditions of barber shops and schools, the contents of licensing examinations for barbers, continuing education requirements for barbers, licensing requirements for barber schools and teachers, requirements for barber students, and any other area the Barber Board determines appropriate.  The act requires the Barber Board to review these rules annually in order to compare them with the rules adopted by the State Board of Cosmetology.  If the Barber Board determines that the cosmetology rules would be beneficial to the barbering profession (including, but not limited to, rules concerning using career technical schools), the act requires the Barber Board to adopt rules for barbers similar to the cosmetology rules.
OFFICE OF BUDGET AND MANAGEMENT


User charges for OBM budgeting services
(R.C. 126.25)
Continuing law requires that the accounting services provided by the Director of Budget and Management be supported by user charges.  The Director determines a rate that is sufficient to defray the expense of those services and deposits all money collected from user charges in the state treasury to the credit of the State Accounting Fund.
Under the act, the budgeting services provided by the Director are also to be supported by user charges.  Likewise, the Director is to determine a rate that is sufficient to defray the expense of the services.  The act changes the name of the State Accounting Fund to the "Accounting and Budgeting Fund," and requires that all user charges collected for accounting and budgeting services be deposited into that fund.
Authority to transfer interest to GRF
(Section 312.06)
Under ongoing law, many sections of the Revised Code specify that interest earnings of particular funds are to be credited to those funds.  The act provides that, in spite of any such law, the Director of Budget and Management, through June 30, 2007, may transfer interest earned by any fund in the Central Accounting System to the GRF.  This authority, however, does not apply to funds whose source of revenue is restricted or protected by the Ohio Constitution, federal tax law, or the federal "Cash Management Improvement Act of 1990."
CAPITOL SQUARE REVIEW AND ADVISORY BOARD


Financial disclosure statement filings
(R.C. 102.02)
Under continuing law, the 13 Capitol Square Review and Advisory Board (CSRAB) members are appointed for terms of three years.  Among its other powers and duties, the CSRAB must employ and fix the compensation of an executive director for the CSRAB and other employees its considers necessary for the performance of its powers and duties.
The act includes among those persons required to file financial disclosure statements under the Ethics Law, the CSRAB's executive director and its members.
DEPARTMENT OF COMMERCE


Plumbing inspectors
Certifying and recertifying
(R.C. 3703.01 and 3703.10)
Under prior law, the Superintendent of Industrial Compliance in the Department of Commerce was required to adopt rules prescribing minimum qualifications that the Director of Commerce used in approving plumbing inspectors to do plumbing inspections for health districts.  Rather than approving inspectors, the act instead requires the Superintendent to prescribe these minimum qualifications that the Superintendent, not the Director, uses for certifying and recertifying plumbing inspectors.
The act allows the Superintendent to contract with one or more persons to conduct certification examinations of plumbing inspectors.  The persons contracted with must prepare, administer, score, and maintain the confidentiality of the examination; maintain responsibility for all the expenses of conducting the examination; charge each applicant a fee for the examination, in an amount the Superintendent authorizes; and design the examination.
Under the act, the Superintendent may deny, suspend, or revoke the certification of any inspector and examine an inspector under oath.  The Superintendent also may examine the books and records of the inspector if the Superintendent finds the books and records relevant to denying, suspending, or revoking a certification or examining an inspector under oath.
The act permits the Superintendent to adopt rules for the continuing education of inspectors.
Reciprocal registration, licensure, or certification
(R.C. 3703.01)
The act permits the Superintendent to enter into reciprocal registration, licensure, or certification agreements with other states and other agencies of this state relative to inspectors if two requirements are met.  First, the registration, licensure, or certification requirements of the other state or other agency must be substantially equal to the requirements adopted by the Superintendent.  Second, the other state or other agency must extend similar reciprocity to inspectors certified by the Superintendent.
Fees
(R.C. 3703.07)
The act allows the Superintendent to establish fees to pay the costs of fulfilling the duties of the Division of Industrial Compliance under the Plumbing Law (R.C. Chapter 3703.).  These fees can include, but are not limited to, fees for administering a continuing education program for inspectors and for certifying and recertifying inspectors.  The fees must bear some reasonable relationship to the costs of administering and enforcing the Plumbing Law.
Engaging in the plumbing business
(R.C. 3703.04)
Under prior law, plumbing inspectors employed by the Department were prohibited from engaging in or having an interest in the plumbing business or the sale of any plumbing supplies.  The act eliminates this prohibition.
Technical changes in the Plumbing Law
(R.C. 3703.01, 3703.03, 3703.04, 3703.05, 3703.06, 3703.07, 3703.08, 3703.10, and 3703.99)
Prior law gave the Director of Commerce and the Department of Commerce the authority to act under the Plumbing Law.  The act gives this authority specifically to the Superintendent of Industrial Compliance and the Division of Industrial Compliance.
Fire Marshal's Fireworks Training and Education Fund
(R.C. 3743.57)
Under prior law, licensed fireworks manufacturers and wholesalers had to pay assessments determined by the State Fire Marshal into the Fire Marshal's Fireworks Training and Education Fund (used to pay for fireworks training and education).  The act eliminates the assessments and the fund and requires the Fire Marshal, instead, to use the State Fire Marshal's Fund for fireworks training and education.
Fireworks Law
(R.C. 3743.01, 3743.02, 3743.04, 3743.05, 3743.06, 3743.15, 3743.17, 3743.18, 3743.19, 3743.59, 3743.65, and 3743.75)
Distance requirements between buildings used for fireworks and other buildings and roadways
Under prior law, no licensed manufacturer or wholesaler of fireworks could situate a building used in the manufacture, storage, or sale of fireworks closer than (1) 1,000 feet from any structure not located on the property of and not belonging to the licensed manufacturer or wholesaler, (2) 300 feet from any highway or railroad, (3) 100 feet from any building used for storing explosives or fireworks, or (4) applicable only to manufacturers of fireworks, 50 feet from any factory building.
Under existing law, a licensed wholesaler of fireworks could transfer from one geographic location to another within the same municipal corporation or unincorporated area of the same township if, among other requirements, every building at the new location was no closer than (1) 2,000 feet to any building used for the sale, storage, or manufacturing of fireworks that does not belong to the licensee, (2) 1,000 feet from any property line or structure that does not belong to the licensee requesting the transfer, (3) 300 feet to any highway or railroad, (4) 100 feet to any building used for the storage of explosives or fireworks by the licensee, and (5) 50 feet to any factory building owned or used by the licensee.
The act removes these distance restrictions and requires the State Fire Marshal to adopt rules concerning the required distances between buildings and structures used in the manufacturing, storage, or sale of fireworks and occupied residential and nonresidential buildings or structures, railroads, highways, or any additional buildings.  However, these new requirements the State Fire Marshal adopts do not apply to buildings that were erected on or before May 30, 1986, and that were legally being used for fireworks activities under authority of a valid license issued by the Fire Marshal as of December 1, 1990.  The distance restrictions contained in prior law also did not apply to these buildings.
Expansion or contraction of licensed premises
The act requires the State Fire Marshal to adopt rules for the expansion or contraction of a licensed premises and for approval of such expansions or contractions.  If the licensed premises consists of more than one parcel of real estate, the parcels must be contiguous unless the fireworks manufacturer or wholesaler meets certain requirements specified by the act.
Under the act, a licensed manufacturer or wholesaler may expand its licensed premises to include not more than two storage locations that are located upon one or more real estate parcels that are noncontiguous to the licensed premises if all of the following apply:  (1) the licensee submits an application and a $100 fee per storage location to the State Fire Marshal, (2) the identity of the license holder remains the same at the storage location, (3) the storage location has received valid certificates of compliance for zoning and occupancy for each building or structure at the storage location and those certificates permit the distribution and storage of fireworks, (4) every building or structure located upon the storage location is separated from occupied residential and nonresidential buildings or structures, railroads, highways, or other buildings on the licensed premises in accordance with distance requirements the State Fire Marshal adopts by rule, (5) neither the licensee nor any person holding, owning, or controlling a 5% or greater interest in the licensee has been convicted of or pleaded guilty to a felony after the act's effective date, and (6) the State Fire Marshal approves the application for expansion.
Under the act, the State Fire Marshal must approve an expansion application if the State Fire Marshal receives the application fee and proof that the manufacturer or wholesaler has met all of the requirements described above.  The storage location must be considered part of the original licensed premises.  If a licensee obtains approval for expansion, the storage location may be used only for the following purposes:  (1) packaging, assembling, or storing fireworks, which must occur only in approved buildings and be performed in accordance with applicable rules, (2) distributing fireworks to other parcels of real estate located on the manufacturer's or wholesaler's premise or to licensed wholesalers or other licensed manufacturers in this state or other states or countries, and (3) distributing fireworks to a licensed exhibitor of fireworks.  The State Fire Marshal is required to adopt rules to establish requirements for the operation of storage locations, including packaging, assembling, and storage of fireworks.
The act prohibits the licensee who obtains approval for expansion from engaging in any sales activity at the storage location, including the retail sale of fireworks otherwise permitted under continuing law.  Continuing law permits manufacturers and wholesalers to sell fireworks to licensed wholesalers and manufacturers, out-of-state residents who are transporting the fireworks out of this state, Ohio residents if the fireworks are 1.4G fireworks, out-of-state residents if the manufacturer or wholesaler is shipping the fireworks out of this state to that person, or licensed exhibitors of fireworks.
Under the act, a licensee who obtains approval for expansion must prohibit public access to all storage locations used by the licensee.  The State Fire Marshal must adopt rules establishing acceptable measures a manufacturer or wholesaler must use to prohibit public access.
The act defines "storage location" to mean a single parcel or contiguous parcels of real estate approved by the State Fire Marshal for expansion or contraction that are separate from a licensed premises containing a retail showroom, and which parcel or parcels a licensed manufacturer or wholesaler of fireworks may use only for distribution, possession, and storage of fireworks.
Variances to requirements of Fireworks Law and license moratorium
Under prior law, the State Fire Marshal, upon application by an affected party, could grant variances from any of the requirements of the Fireworks Law if the State Fire Marshal determined that the literal enforcement of the requirements would result in unnecessary hardship.  The act instead permits the State Fire Marshal to grant variances if enforcing the requirements of the Fireworks Law will result in "practical difficulty" in complying with the Fireworks Law or the rules adopted pursuant to the Fireworks Law.
Under continuing law, the State Fire Marshal may not issue wholesaler or manufacturer licenses between June 29, 2001 and December 15, 2008 to a person for particular fireworks plant for a manufacturer's license or for a particular location for a wholesaler's license.  The act prohibits the State Fire Marshal, notwithstanding the authority granted to the Fire Marshal to grant variances as described above, from granting variances, waivers, or exclusions in order to allow the State Fire Marshal to grant (1) manufacturers or wholesalers licenses within the prohibited time frame, (2) approval for any expansion or contraction without meeting the necessary requirements, or (3) approval for storage locations on noncontiguous real estate without meeting the necessary requirements, all as described above.  For purposes of this provision, the act defines "person" to include any person or entity that acquires possession of a manufacturer's or wholesaler's license by transfer of possession of the license in any manner that is in accordance with the Fireworks Law and approved by the state Fire Marshal.  The act defines "particular location" to include a licensed premises and any approved storage location.
Residential Building Code
(R.C. 307.37, 3781.07, 3781.10, 3781.102, 3781.191, and 4740.14)
The act clarifies that the local residential building regulations a board of county commissioners adopts under existing law may be enforced within the unincorporated area of the county or within districts the Board of Building Standards establishes in any part of the unincorporated area.  The act also clarifies that a board of county commissioners may enforce an existing structures code pertaining to the repair and continued maintenance of residential structures within districts established by the Board in the unincorporated area of the county.
Under prior law, the Board of Building Standards was comprised of ten members and the Residential Construction Advisory Committee was comprised of eight members.  The act expands the membership of both the Board and the Committee by one member who must be the mayor of a municipal corporation in which the residential and nonresidential building codes are enforced by a certified building department.  This member must be chosen from a list of three names the Ohio Municipal League submits to the Governor.  Under the act, the actual and necessary expenses of the members of the Residential Construction Advisory Committee, including a per diem for each day a member must attend an official meeting of the Committee, must be paid from the Industrial Compliance Operating Fund.
Under the act, the Board of Building Standards may certify persons furnishing "other services," in addition to architectural or engineering services as under existing law, pursuant to a contract to exercise enforcement authority, to accept and approve plans and specifications, and to make inspections on behalf of a municipal corporation, township, or county.
The act specifies that the Board of Building Appeals has no authority to hear any case based on the Residential Building Code or to grant any variance to that Code.
Minimum price discount for spirituous liquor wholesale purchases
(R.C. 4301.10(B)(4))
Continuing law grants the Division of Liquor Control the authority to fix the wholesale and retail prices for the various classes, varieties, and brands of spirituous liquor sold by the Division.  However, it requires the Division to fix wholesale prices at a discount, which, under previous law, had to be not less than 12.5% of the retail selling prices.  The act reduces this minimum price discount to 6% of the retail selling prices.
Issuance of Sunday sales liquor permit without local option election approval to D liquor permit premises located at ski areas
(R.C. 4303.182)
Law unchanged by the act prohibits the sale of intoxicating liquor after 2:30 a.m. on Sunday unless the liquor is sold under the authority of a permit that authorizes Sunday sale (R.C. 4301.22(D)--not in the act).  The D-6 permit authorizes the Sunday sale of intoxicating liquor and generally is issued only to the holder of an existing liquor permit for sales at the permit holder's premises if Sunday liquor sales have been approved in a local option election on sales at that premises or in the area where the premises is located.
Continuing law, however, does authorize the issuance of a D-6 permit under certain conditions to an existing permit holder for the permit holder's premises even though Sunday liquor sales have not been approved in a local option election on sales at that premises or in the area where the premises is located.[26]  The act additionally requires a D-6 permit to be issued to the holder of any D permit for a premises that is licensed as a retail food service operation or retail food establishment that is authorized to have sales of on-premises consumption and that is located at a ski area, to allow sales under the D-6 permit between the hours of 10 a.m. and midnight on Sunday, whether or not those sales have been approved in a local option election on sales at that premises or in the area where the premises is located.  "Ski area" is defined by the act as all the ski slopes, ski trails, and passenger tramways that are administered or operated as a single enterprise within Ohio, provided that the passenger tramway operator at that area is registered under the Skiing Safety Law.
OFFICE OF CONSUMERS' COUNSEL


Call center for consumer complaints against public utilities
(R.C. 4905.261 and 4911.021)
Committee testimony indicated that both the Public Utilities Commission (PUCO) and the Consumers' Counsel receive and respond to telephoned consumer's public utilities complaints.  The act expressly requires the PUCO to operate a telephone call center for consumer complaints against any public utility by any person, firm, or corporation.
The act negates the Consumers' Counsel authority to operate a telephone call center for consumer complaints.  The Consumers' Counsel must forward any calls received concerning consumer complaints to the PUCO's call center.  However, the PUCO must expeditiously provide the Consumers' Counsel with all information received in the operation of the call center concerning residential consumer complaints and with any materials produced in the operation of the call center concerning residential consumer complaints.  If technology is reasonably available, the act requires the PUCO to provide the Consumers' Counsel with real-time access to the PUCO's residential consumer complaint information. 
Changes to assessments collected from public utilities for maintaining the Consumers' Counsel
(R.C. 4911.18)
For the purpose of maintaining the Office of the Consumers' Counsel, each public utility pays a yearly assessment.  The amount is calculated by first computing an assessment in proportion to the intrastate gross earnings or receipts of the utility for the preceding calendar year.  The Consumers' Counsel may include in the initial computation, any amount underreported by a utility from a prior year.  Excluded from the computation are earnings or receipts from sales to other public utilities.  Under the act, the Consumers' Counsel may also exclude from the computation any overreported amount from a prior year.
Under prior law, a final computation of the assessment imposed a $50 assessment on each utility whose assessment under the initial computation equaled $50 or less.  The act changes the minimum yearly assessment against each utility from $50 to $100. The utility payments are deposited in the state treasury to the credit of the Consumers' Counsel Operating Fund.
Formerly, the Consumers' Counsel notified each utility of the sum assessed against it by October 1 of each year, after which payment was to be made to the Consumers' Counsel.  The act changes this schedule, to require that by May 15 of each year beginning in the 2006 calendar year, the Consumers' Counsel must notify each utility that had an assessment against it for the current fiscal year of more than $1,000, that the utility must pay 50% of that amount to the Consumers' Counsel by June 20.  This payment is an initial payment for the next fiscal year.  The act requires the Consumers' Counsel to make a final determination of the assessment against each utility by October 1 of each year, deducting any initial payment received, and to notify the utility of that amount.  Each utility must pay the Consumers' Counsel the remaining assessment amount by November 1 of that year.
Under prior law, at the beginning of each fiscal year, the Director of Budget and Management transferred an amount from the General Revenue Fund (GRF) to the Consumers' Counsel Operating Fund so the Consumers' Counsel could maintain operations during the first four months of the fiscal year.  The amount transferred by the Director was required to be transferred back into the GRF from the Consumers' Counsel Operating Fund by December 31.  Under the act, beginning in calendar year 2006, these obligations no longer apply because under the act's new assessment schedule the Consumers' Counsel Operating Fund will receive sufficient revenue from the initial assessment payment to operate at the beginning of each fiscal year.
CONTROLLING BOARD


Approval of state collective bargaining agreements and funds necessary to implement agreement
(R.C. 4117.10)
Under the Public Employee Collective Bargaining Law (Chapter 4117.) any collective bargaining agreement concluded between a public employer and an employee organization must be submitted to the "legislative body" of the public employer for ratification.  Under prior law, in the case of the state, the legislative body was the General Assembly.  The act replaces the General Assembly with the Controlling Board as the entity responsible to accept or reject both of the following: (1) a collective bargaining agreement between a state public employer and an exclusive representative and (2) a request for the funds necessary to implement the agreement.  Under continuing law, a collective bargaining agreement and a request for funds must be accepted or rejected as a whole.

OHIO STATE BOARD OF COSMETOLOGY


State Board of Cosmetology office location
(R.C. 4713.02)
The act requires the State Board of Cosmetology to establish an office in Franklin County, Ohio, instead of in Columbus, Ohio, as under former law.
OFFICE OF CRIMINAL JUSTICE SERVICES


Abolition of the Office of Criminal Justice Services and creation of the Division of Criminal Justice Services in the Department of Public Safety
(R.C. 108.05, 109.91, 141.011, 181.251 (5502.63), 181.51 (5502.61), 181.52 (5502.62), 181.54 (5502.64), 181.55 (5502.65), 181.56 (5502.66), 2152.74, 2901.07, 2923.25, 3793.09, 4112.12, 5120.09, 5120.51, 5139.01, and 5502.01; Section 209.51)
Prior law created the Office of Criminal Justice Services with a director appointed by the Governor and employees appointed by the director.  The Office served as the state criminal justice services agency and performed criminal justice system planning in Ohio; collected, analyzed, and correlated information and data concerning the criminal justice system in Ohio, assisted state and local governmental agencies and entities in dealing with criminal justice services planning and problems, administered federal and state programs and funds related to criminal justice, reported to the General Assembly, Attorney General, and Governor on ways to improve the criminal and juvenile justice systems, and performed other tasks related to criminal justice services.  (R.C. 181.52.)
The act abolishes the Office of Criminal Justice Services and creates a Division of Criminal Justice Services in the Department of Public Safety.  Under the act, the Director of Public Safety, with the concurrence of the Governor, appoints an executive director of the Division to serve at the pleasure of the Director.  The executive director, subject to the control of the Director of Public Safety, appoints the Division's staff and enters into any agreements necessary to perform the Division's functions.  The act requires the Division to perform the same functions as did the Office of Criminal Justice Services.  (R.C. 5502.62.)
The act makes appropriate changes in the Revised Code to reflect the abolition of the Office and creation of the Division, including the renumbering of sections.  The act provides for the transfer to the Division of:  (1) the employees of the Office, subject to the layoff provisions of R.C. 124.321 to 124.328, and (2) the assets, rules, business, and determinations of the Office.  The act repeals the authority of the Governor to appoint advisory committees to assist the Office of Criminal Justice Services.  (Repeal of R.C. 181.53.)
Creation of Federal Justice Programs Fund
(R.C. 181.52 renumbered R.C. 5502.62)
The act creates the Federal Justice Programs Fund in the state treasury for the deposit of all money from federal grants that require that the money be deposited into an interest-bearing fund, that are intended to provide funding to local criminal justice programs, and that require that investment earnings be distributed for program purposes.  The act requires that all investment earnings of the Fund be credited to the Fund and distributed in accordance with the terms of the grant under which the money is received.
OHIO CULTURAL FACILITIES COMMISSION


Composition
(R.C. 3383.02)
The Ohio Cultural Facilities Commission engages in and provides for the development, performance, and presentation or making available of culture and professional sports and athletics to the public in Ohio, and the provision of training or education in culture.  Under prior law, the Commission consisted of ten members, seven of whom were voting members appointed by the Governor, with the Senate's advice and consent, from different geographical regions of the state.[27]  Not more than four of the voting members could be affiliated with the same political party.  Former law specified that four voting members constituted a quorum for the conduct of Commission business and that the affirmative vote of four voting members was necessary for approval of any action taken by the Commission.
The act increases the Commission's membership to 12 members, by adding two voting members to be appointed by the Governor with the Senate's advice and consent.  No more than five of the nine voting members appointed by the Governor to the Commission can be affiliated with the same political party.
The two additional voting members must be appointed within 60 days after the act's effective date, one for a term ending December 31, 2007, and the other for a term ending December 31, 2008.  Their successors will serve three-year terms, the same as the Commission's other voting members, commencing on January 1 and ending on December 31 in the appropriate years.
The act also specifies that five voting members of the Commission constitute a quorum for the conduct of Commission business, and the affirmative vote of five voting members is necessary for approval of any action taken by the Commission.
Cultural Facilities Commission bond premium
(R.C. 3383.09)
The Ohio Cultural Facilities Commission also focuses on the construction, renovation, and use of cultural and sports facilities.  The General Assembly makes appropriations to the Cultural and Sports Facilities Building Fund that consist of proceeds of obligations authorized to pay costs of the cultural and sports facilities.
Under ongoing law, the Commission's Chairperson or Executive Director can request the Director of Budget and Management to transfer to the Ohio Cultural Facilities Commission Administration Fund, investment earnings credited to the Cultural and Sports Facilities Building Fund that exceed the amount required to meet estimated federal arbitrage rebate requirements.[28]  The act adds that the Commission's Chairperson or Executive Director can also request the Director of Budget and Management to transfer to the Commission's administration fund, the premium paid on any bonds issued on behalf of the Commission and credited to the Cultural and Sports Facilities Building Fund that exceed the federal arbitrage rebate requirements.
Refunding Ohio Cultural Facilities Commission obligations
(R.C. 154.11)
Continuing law permits the Treasurer of State to authorize and issue obligations for the refunding, including funding and retirement, of any obligations previously issued under the Public Facilities Commission Law.  Obligations for Ohio Cultural Facilities Commission capital facilities are issued under that Law.  But, prior to the enactment of Am. Sub. H.B. 16 of the 126th General Assembly, they were issued under the Ohio Building Authority Law.  The act clarifies that the Treasurer's authority to issue refunding obligations extends to bonds and notes issued under the Building Authority Law to pay costs of capital facilities leased to the Ohio Cultural Facilities Commission (which was known as the Ohio Arts and Sports Facilities Commission until renamed by Am. Sub. H.B. 516 of the 125th General Assembly).
DEPARTMENT OF DEVELOPMENT


Alternative Fuel Transportation Grant Program
(R.C. 122.075)
The act provides that for the purpose of improving the air quality in this state, the Director of Development must establish the Alternative Fuel Transportation Grant Program.  "Alternative fuel" means blended biodiesel or blended gasoline.  ("Blended biodiesel" is diesel fuel containing at least 20% biodiesel by volume and "blended gasoline" is gasoline containing at least 85% ethanol by volume.)[29]  Under the program, the Director may make grants to businesses, nonprofit organizations, public school systems, or local governments for the purchase and installation of alternative fuel refueling facilities and for the purchase and use of alternative fuel.
In accordance with the Administrative Procedure Act, the Director must adopt any rules that are necessary for the administration of the grant program.  The rules must establish at least all of the following:
(1) An application form and procedures governing the grant application process;
(2) A procedure for prioritizing the award of grants under the program;
(3) A requirement that the maximum grant for the purchase and installation of an alternative fuel refueling facility be no more than 50% of the facility cost;
(4) A requirement that the maximum grant for the purchase of alternative fuel be no more than 50% of the incremental cost of the fuel ("incremental cost" means either of the following:  the difference in cost between blended gasoline and gasoline containing 10% or less ethanol at the time the blended gasoline is purchased, or the difference in cost between blended biodiesel and diesel fuel containing 2% or less biodiesel at the time the blended biodiesel is purchased);
(5) Any other criteria, procedures, or guidelines that the Director determines are necessary to administer the program.
The act creates the Alternative Fuel Transportation Grant Fund in the state treasury to make grants under the program and to pay the program's administrative costs.  The fund consists of money as may be specified by the General Assembly from the existing Energy Efficiency Revolving Loan Fund.
Shovel Ready Sites Program
(R.C. 122.083)
The act makes permanent the Department of Development's Shovel Ready Sites Pilot Program, which provides grants for projects to port authorities and development entities approved by the Director of Development.  The act specifies that the grants may be used to pay the costs of any or all of the following:  (1) acquisition of property, including options, (2) preparation of sites, including brownfield clean-up activities, (3) construction of road, water, telecommunication, and utility infrastructure, and (4) payment of professional fees the amount of which cannot exceed 20% of the grant amount for a project.  In addition, the act requires the Director to adopt rules in accordance with the Administrative Procedure Act that establish procedures and requirements necessary for the administration of the program, including a requirement that a recipient of a grant enter into an agreement with the Director governing the use of the grant.  Finally, the act creates in the state treasury the Shovel Ready Sites Fund consisting of money appropriated to it.  The Fund must be used solely for the purposes of the Shovel Ready Sites Program.
Agreements to assist in retaining jobs at military facilities scheduled to close
(R.C. 122.18)
Continuing law allows the Tax Credit Authority to enter into an agreement with a landlord under which an annual payment equal to the new income tax revenue or the amount called for under the agreement must be made to the landlord from moneys of this state that were not raised by taxation and must be credited by the landlord to the rental owing from the tenant to the landlord for a facility.  "Landlord" is defined as a county or municipal corporation or a corporate entity that is an instrumentality of a county or municipal corporation and that is not subject to the corporate franchise tax or the state income tax.  In addition, "tenant" means the United States, any department, agency, or instrumentality of the United States, or any person under contract with the United States or any department, agency, or instrumentality of the United States.  "New income tax revenue" means the total amount withheld under the Income Tax Law by the tenant or tenants at a facility during a year from the compensation of new employees for the tax levied under that Law.  "New employee" is defined as a full-time employee first employed by, or under or pursuant to a contract with, the tenant in the project that is the subject of the agreement after a landlord enters into an agreement with the Tax Credit Authority under these provisions.  Finally continuing law defines "facility" to mean all real property and interests in real property owned by a landlord and leased to a tenant pursuant to a project subject to an agreement.  The act adds that "facility" also means all real property and interests in real property owned by the United States or any of its departments, agencies, or instrumentalities.
The act also allows the Tax Credit Authority to enter into such an agreement under which an annual payment equal to retained income tax revenue must be made to the landlord.  The act defines "retained income tax revenue" to mean the total amount withheld under the Income Tax Law from employees retained at an existing facility recommended for closure to the Base Realignment and Closure Commission in the United States Department of Defense.
Continuing law provides that a landlord that proposes a project to create new jobs in Ohio may apply to the authority to enter into such an agreement for annual payments.  The act adds that a landlord also may apply to the authority to enter into such an agreement when the landlord proposes a project to retain jobs in Ohio at an existing facility recommended for closure or realignment to the Base Realignment and Closure Commission.  The act retains a requirement that the Director of Development prescribe the form of the application.
Continuing law authorizes the Tax Credit Authority, after receipt of an application, to enter into an agreement with the landlord for annual payments if it determines all of the following:
(1) The project will create new jobs in this state;
(2) The project is economically sound and will benefit the people of this state by increasing opportunities for employment and strengthening the economy of this state; and
(3) Receiving the annual payments will be a major factor in the decision of the landlord and tenant to go forward with the project.
The act adds in item (1) that the determination can be that the project will retain jobs at a facility recommended for closure or realignment to the Base Realignment and Closure Commission.
Continuing law requires that an agreement with a landlord for annual payments include all of the following:
(1) A description of the project that is the subject of the agreement;
(2) The term of the agreement, which cannot exceed 20 years;
(3) Based on the estimated new income tax revenue to be derived from the facility at the time the agreement is entered into, provision for a guaranteed payment to the landlord commencing with the issuance by the landlord of any bonds or other forms of financing for the construction of the facility and continuing for the term approved by the authority;
(4) Provision for offsets to the state of the annual payment in years in which the annual payment is greater than the guaranteed payment, of amounts previously paid by the state to the landlord in excess of the new income tax revenue by reason of the guaranteed payment;
(5) A specific method for determining how many new employees are employed during a year;
(6) A requirement that the landlord annually must obtain from the tenant and report to the Director the number of new employees, the new income tax revenue withheld in connection with the new employees, and any other information the Director needs to perform the Director's duties; and
(7) A requirement that the Director annually verify the amounts reported by the landlord and, after doing so, issue a certificate to the landlord stating that the amounts have been verified.
The act applies these requirements to agreements that it authorizes for projects that will retain jobs at facilities that are recommended for closure or realignment as discussed above.  For that purpose, it adds references to retained income tax revenue to items (3) and (4) above and, in item (6), adds that the landlord's report must include the number of retained employees and the retained income tax revenue withheld in connection with the retained employees if applicable.
Development Financing Advisory Council quorum
(R.C. 122.40)
Under continuing law, the Development Financing Advisory Council assists the Director of Development in carrying out various assistance programs authorized by statute.  The Council consists of ten members--seven members appointed by the Governor who are selected for their knowledge of and experience in economic development financing, one member of the Senate appointed by the President of the Senate, one member of the House of Representatives appointed by the Speaker of the House of Representatives, and the Director or his designee.  Continuing law imposes various requirements governing the operation of the Council.  One of those requirements specifies that four members of the Council constitute a quorum.  The act instead specifies that six members of the Council constitute a quorum and that the affirmative vote of six members is necessary for any action taken by the Council.
Increased state contributions under the Capital Access Loan Program
(R.C. 122.603)
The Capital Access Loan Program seeks to increase the amount of capital available to certain for-profit businesses located in Ohio by securing loans made from financial institutions to the businesses.  Under the program, the state, a financial institution, and a business each make a contribution to a loan guarantee reserve pool at the financial institution.  If a business defaults on a loan, the financial institution that made the loan can recover the delinquent loan amount from its reserve pool.
Under prior law, upon receiving a certification from a financial institution that it made a loan under the program in a specified amount, the Director of Development disbursed to the financial institution an amount equal to 10% of the principal amount of the loan for deposit into the financial institution's reserve pool.  The act increases the amount of the state's contribution with respect to the first three loans made by a participating financial institution.  Under the act, with respect to the first three loans, the state contributes 50%, as opposed to 10%, of the principal amount of each loan.  Any loans made thereafter with respect to that financial institution would receive a 10% contribution.
Minority business development loan and bond guarantee programs
(R.C. 122.71, 122.72, 122.73, 122.74, 122.75, 122.751, 122.76, 122.78, 122.79, 122.82, and 122.83)
Generally under continuing law, the Minority Business Development Loan Program involves the Minority Development Financing Advisory Board advising the Director of Development in determining assistance to minority businesses, including approval of loan applications.  This law includes specifications about the composition of the Board and its duties; duties of the Director; and eligibility for, purposes of, and the approval process for loans made under the Program.  Continuing law also permits the Director to guarantee bonds executed by sureties for minority businesses and certain enterprises.
The act adds references to this Bond Guarantee Program as being part of the Minority Business Development Loan Program, including for purposes of administration by the Director.  This also authorizes the Minority Development Financing Advisory Board to advise and make recommendations to the Director as to applications for assistance under the Bond Guarantee Program.
The act modifies eligibility for, and expands the permissible purposes of, loans made under the Minority Business Development Loan Program by expressly adding African Americans and Latinos and replacing "Orientals" with Asians, and by removing a prohibition for loans used to procure or improve power driven vehicles, office equipment, raw materials, small tools, supplies, or inventories.  In addition to other specifications for considering an application for a loan, the act adds that an application will be considered if there is certification by the Minority Business Supplier Development Council that the applicant is a minority business.
The act modifies the approval process for these loans to empower "regional economic development entities," rather than the Minority Development Financing Advisory Board, to submit recommendations and determinations to the Director.  Specifically, if these entities submit a recommendation or determination to the Director, the Director is not required to submit information to or to solicit recommendations from the Board.  Regional economic development entities are defined in the act to be entities having a contract with the Director to administer a loan program under the Economic Development Law in a particular area of Ohio.
The act also increases the size of the Minority Development Financing Advisory Board from nine to ten members, with the Director or the Director's designee being added as a voting member of the Board.  The act increases from five to six the number of Board members necessary to constitute a quorum and from five to six the number of affirmative votes necessary for any action to be taken by the Board.
Loan Guarantees for Small Businesses Program
(R.C. 122.77)
For purposes of the loan guarantees for the general Small Businesses Loan Program, the act increases from 50% to 80% the total amount of a project that the Director of Development may guarantee.  The act also expands the purposes for which a loan guarantee may be made by eliminating a prohibition for guaranteeing loans used to procure or improve power driven vehicles, office equipment, raw materials, small tools, supplies, or inventories.
Industrial Site Improvement Fund
(R.C. 122.95 and 122.951)
Under prior law, if the Director of Development determined that a grant from the Industrial Site Improvement Fund would create new jobs or preserve existing jobs and employment opportunities in an eligible county, the Director could grant up to $1 million from the Fund to the eligible county for the purpose of making improvements to commercial or industrial areas within the eligible county.  The act instead provides that if the Director determines that a grant from the Fund may create new jobs or preserve existing jobs and employment opportunities in an eligible county, the Director may grant up to $500,000 from the Fund to the eligible county for the purpose of acquiring commercial or industrial land or buildings and making improvements to commercial or industrial areas within the eligible county.
For the purposes of this program, law that is modified by the act defines "eligible county" to mean any of the following:
(1) A county designated as being in the "Appalachian region" under the federal Appalachian Regional Development Act of 1965;
(2) A county that is a "distressed area" as defined in the Department of Development Law;
(3) A county that has a population of less than 100,000 according to the most recent federal decennial census and in which 350 or more residents of the county were, during the most recently completed calendar year, permanently or temporarily terminated from a private sector employment position for any reason not reflecting discredit on the employee; or
(4) A county that has a population of 100,000 or more according to the most recent federal decennial census and in which 1,000 or more residents of the county were, during the most recently completed calendar year, permanently or temporarily terminated from a private sector employment position for any reason not reflecting discredit on the employee.
The act eliminates categories (3) and (4), above, from the definition and instead includes a county that within the previous calendar year has had a job loss numbering 200 or more of which 100 or more are manufacturing-related as reported in the notices prepared by the Department of Job and Family Services pursuant to the federal Worker Adjustment and Retraining Notification Act.
Under prior law, "commercial or industrial area" was defined to mean areas established by a state, county, municipal, or other local zoning authority as being most appropriate for business, commerce, industry, or trade or an area not zoned by state or local law, regulation, or ordinance, but in which there is located one or more commercial or industrial activities.  The act instead defines "commercial or industrial area" to mean areas zoned either commercial or industrial by the local zoning authority or an area not zoned, but in which there is located one or more commercial or industrial activities.
Under prior law, an eligible county that received a grant from the Industrial Site Improvement Fund was not eligible for any additional grants from the Fund.  The act instead specifies that an eligible county that receives a grant from the Fund is not eligible for any additional grants from the Fund in the fiscal year in which the grant is received and in the subsequent fiscal year.
The act also adds that a grant from the Fund cannot provide more than 75% of the estimated total cost of the project for which an application is submitted.  In addition, the act states that not more than 10% of the amount of the grant can be used to pay the costs of professional services related to the project.
Finally, the act allows an eligible county to designate a port authority, community improvement corporation as defined in the Department of Development Law, or other economic development entity that is located in the county to apply for a grant from the Industrial Site Improvement Fund.  If a port authority, community improvement corporation, or other economic development entity is so designated, references to an eligible county in the statute governing the Fund include references to the authority, corporation, or other entity.
Restrictions on Third Frontier Commission funding embryonic stem cell research
(R.C. 184.02)
The Governor vetoed a provision that would have prohibited the Third Frontier Commission from making any grants or loans to individuals, public agencies, private companies or organizations, or joint ventures for any activities involving stem cell research with human embryonic tissue.

DEPARTMENT OF EDUCATION
I. School Funding
Base-cost funding Add-backs to the 23-mill charge-off Guarantee/transitional aid Twice annual ADM reports Parity aid Poverty-based assistance Transportation funding Special education funding Other school funding provisions II. Scholarship Programs III. Community Schools
Caps and limits on sponsors Contract and opening deadlines Enrollment of students E-schools Sanctions for poorly performing community schools State payments to community schools Other community school provisions IV. Other Education Programs
Statewide testing Early childhood education programs Reading grants Post-Secondary Enrollment Options Program School district RIF authority Other education provisions


I. School Funding
Background to school funding formula changes
Base-cost and categorical funding
State operating funding for school districts is divided primarily into two types:  base-cost funding and categorical funding.  Base-cost funding is the prescribed minimum amount of money needed per pupil to pay the expenses that all school districts experience on a somewhat even basis.  These expenses include compensation for teachers of curriculum courses, textbooks, janitorial and clerical services, administrative functions, and support services such as libraries and guidance counseling.
Categorical funding, on the other hand, is calculated for expenses that vary from district to district due to special circumstances, such as the demographics of the student population or the geography of the district.  Some categorical funding, namely the cost-of-doing-business factor and some adjustments to property value, is actually built into the base-cost formula.  But most categorical funding is paid separately from the base cost, including:  additional weighted funding for special education and vocational education services, gifted education funding, aid for districts with a significant proportion of low-income students, and transportation funding.
Equalization
State funds are used in the school funding formula to "equalize" school district revenues.  Equalization means using state money to ensure that all districts, regardless of property wealth, have an equal amount of combined state and local revenues to spend for necessary services.  In an equalized system, poor districts receive more state money than wealthy districts in order to guarantee the established minimum amount for all districts.
The school funding system essentially equalizes 23 mills of property tax for base-cost funding.  It does this by providing sufficient state money to each school district to ensure that, if all districts in the state levied exactly 23 effective mills, they all would have the same per pupil amount of base-cost money to spend.[30]
Base-cost formula
To determine a district's funding for base-cost expenses, prior law set forth the following formula:

(Base-cost "formula amount" x cost-of-doing-business factor x the "formula ADM") minus (0.023 times "recognized valuation")
Where:
(a) The "formula amount" is the statutorily prescribed minimum amount for each student. 
(b) The cost-of-doing-business factor varied by county from 1.000 (for the lowest-cost county) to 1.075 (for the highest-cost county) as prescribed by statute based on a comparison of labor costs for each county.  The act phases out the cost-of-doing-business factor by reducing its total range from 7.5% to 5% in fiscal year 2006 and 2.5% in fiscal year 2007.  Under prior law and the act, Gallia County is the lowest-cost county, and Hamilton County is the highest-cost county.
(c) "Formula ADM" is the number of full-time-equivalent students reported as attending school in the district during the first full week of October.  In addition to the traditional October student count, the act prescribes a second formula ADM count for the third full week in February, which for purposes of payments during the second half of the fiscal year is to be averaged with the count of the previous October.
(d) The district's "recognized valuation" is the value of taxable property in the district, adjusted to diminish the sudden effect of increases due to triennial appraisal updates.
(e) "0.023" represents 23 mills of property taxation, which is the "charge off" presumed to be the district's contribution of the total base cost.   In other words, an amount equal to 23 mills worth of the district's adjusted taxable value will be subtracted from the total amount of base cost calculated for the district.
Beginning in fiscal year 2007, the act applies 23 mills not only against the sum of a district's recognized valuation but also the valuation of certain tax exempt property in the district.
State share percentage
As a result of the base-cost formula, a "state share percentage" is computed.  It is the percentage of the total base-cost amount supplied by the state after the charge-off is deducted.  That state share percentage is subtracted from many, but not all, of the separately calculated categorical funding amounts to determine how much of those amounts is presumed to be the responsibility of the district.  Continuing law limits a district's share of the aggregate of its calculated special education, vocational education, and transportation funding to 3.3 mills beyond the 23-mill charge off.  The state, then, pays the remainder of the district's calculated aggregate amount of funding for those three categories with a subsidy known as the "excess cost supplement."
How the base-cost "formula amount" was established under prior law
Since 1998, the General Assembly utilized an explicit methodology for determining the base cost of an adequate education, from which was derived the formula amount.  That methodology relied on the premise that, all other things being equal, most school districts should be able to achieve satisfactory performance if they have available to them the average amount of funds spent by those districts that have met the standard for satisfactory performance.[31]   The latest standard for that performance, adopted by the General Assembly in 2001, was meeting in fiscal year 1999 at least 20 of the 27 state academic performance standards.  In essence, the General Assembly developed an "expenditure model" by examining the average per pupil expenditures of school districts deemed to be performing satisfactorily.  From the initial group of these districts, it eliminated "outriders" (the top and bottom 5% in property wealth and personal income) and arrived at 127 districts to include in the model.  The base cost derived from analyzing that group's fiscal year 1999 expenditures was $4,814 per pupil for fiscal year 2002.  That amount was increased by an inflation factor of 2.8% for fiscal year 2003 and 2.2% for fiscal years 2004 and 2005.
New "building blocks" methodology
(R.C. 3317.012(A) and (B))
The act prescribes a new method for determining the base cost of an adequate education relying on "building blocks," which the act describes as the following:
(1) Base classroom teachers;
(2) Other personnel support, including "additional teachers, such as music, arts, and physical education teachers funded by state, local, or federal funds or other funds that are above the base cost funding level," and other school personnel including administrators; and
(3) Nonpersonnel support.
The act further states that this model reflects the General Assembly's "policy decisions" that the cost of base classroom teachers rests on two "policy variables."  Those variables are (1) the number of students per base classroom teacher necessary for an adequate education and (2) the average compensation for a base classroom teacher necessary for an adequate education.  In addition, under the model the General Assembly then decides the amount of other personnel support necessary for an adequate education, which is to increase from year to year by the same percentage as the General Assembly increases the average compensation for base classroom teachers.  Finally, the General Assembly decides the nonpersonnel costs necessary for an adequate education, which are inflated from year to year using the projected inflationary measure for the Gross Domestic Product Deflator (all items) prepared by the U.S. Bureau of Labor Statistics.
Using this new model, the act specifies that, for fiscal years 2006 and 2007, the General Assembly has resolved that a ratio of one base classroom teacher for every 20 students is necessary for an adequate education.  It then prescribes that the average compensation for base classroom teachers in fiscal year 2006 is $53,680, and in fiscal year 2007 is $54,941.  Both of these amounts include the value of fringe benefits.  Based on a ratio of 20 students per base classroom teacher, these average compensation amounts equal $2,684 per pupil in fiscal year 2006 and $2,747 per pupil in fiscal year 2007.
The act then specifies that the General Assembly has made a policy decision that the per pupil cost of salary and benefits of other personnel support is $1,807 in fiscal year 2006.  Based on the percentage increase for the average compensation of base classroom teachers from fiscal year 2006 to fiscal year 2007, the act prescribes that the fiscal year 2007 per pupil cost of other personnel support is $1,850.
Finally, the act specifies that the General Assembly has made a policy decision that the per pupil cost of nonpersonnel support is $792 in fiscal year 2006 and $806 in fiscal year 2007, the latter amount reflecting the inflationary measure for the Gross Domestic Product Deflator (all items) projected for those years of 1.80%.
FY 2006 and FY 2007 base-cost formula amount
(R.C. 3317.012(B)(4))
Based on the determinations described under the "building blocks" methodology statement, the act prescribes that the per pupil base-cost amount is $5,283 in fiscal year 2006 and $5,403 in fiscal year 2007.
Base funding supplements
(R.C. 3317.012(C))
In addition to the base-cost amount, the act prescribes four new "base funding supplements," which are to be calculated for each school district, except joint vocational school districts.  One of these supplements is phased in, as described below.  The supplements are as follows:
Base Funding Supplements--Per Pupil Amounts

Supplement
FY 2006
FY 2007
Large-group academic intervention   $25.00  $25.50
Professional development     $3.50  $10.73
Data-based decision making     $5.28    $5.40
Professional development for
data-based decision making
     $6.22    $6.36
                                                      Total   $40.00  $47.99


(1) The base funding supplement for "large-group academic intervention" for all students is calculated as follows:
"Large-group intervention units" x 25 hours x hourly rate
Where:
(a) "Large-group intervention units" equals the district's formula ADM divided by 20; and
(b) "Hourly rate" equals $20.00 in fiscal year 2006 and $20.40 in fiscal year 2007.
In other words, the supplement provides funding for 25 hours of intervention for every student at a 20:1 student-to-teacher ratio and an hourly rate of $20 in the first year of the biennium and $20.40 in the second year.
(2) The base funding supplement for professional development is phased in as follows:
District's teacher factor x 4.5% x formula amount x phase-in percentage
Where:
(a) For each school district, the district's "teacher factor" is the district's formula ADM divided by 17; and
(b) "Phase-in percentage" equals 25% in fiscal year 2006 and 75% in fiscal year 2007.
(3) The base funding supplement for "data-based decision making" is calculated according to the following formula:
0.1% x formula amount x formula ADM
This subsidy presumably is to help defray a district's cost in examining student performance data to determine the appropriate courses of action for students.[32]
(4) Finally, the base funding supplement for "professional development regarding data-based decision making" is calculated as follows:
(20% of the district's "teacher factor" x 8% of the formula amount) + (the district's "principal factor" x 8% of the formula amount)
A district's "teacher factor" is its formula ADM divided by 17 (meaning the formula assumes one teacher per 17 students).  A district's "principal factor" is its formula ADM divided by 340 (meaning the formula assumes one principal per 340 students, or per 20 teachers).  Presumably, this supplement is to help districts defray the cost related to professional development for just its data-based decision-making activities.
Cost-of-doing-business factor
(R.C. 3317.02(N))
As noted above, under prior law, the cost-of-doing-business factor applied a multiple of between 1.000 to 1.075 (7.5% extra maximum for the highest cost county) to the formula amount to account for the labor costs of the county in which the district is located.  The act phases out the cost-of-doing-business factor by prescribing new ranges by county that vary from 1.000 to 1.050 (5% maximum) for fiscal year 2006 and from 1.000 to 1.025 (2.5% maximum) for fiscal year 2007.
Add-backs to the 23-mill charge-off
(R.C. 3317.02(X), 3317.021, 3317.022(A), and 3317.0216(A)(2))
Because of incentive district property tax exemptions
Continuing law requires that the Tax Commissioner certify to the Department of Education certain information for each city, exempted village, and local school district, including the taxable value of real and tangible personal property in the school district subject to taxation in the preceding year, to be used to compute the district's 23-mill charge-off for the base-cost formula.
The act provides that, beginning in fiscal year 2007, the Tax Commissioner also must certify the aggregate value of real property in each school district that is exempted from taxation pursuant to an ordinance or resolution creating an incentive district (see "Incentive districts," below), as indicated on the list of exempted property for the preceding tax year, and as if the property had been assessed for taxation that year.  The reported value must exclude payments in lieu of taxes provided to the school district by a municipal corporation, county, or township that adopted the ordinance or resolution.  The amount certified by the Commissioner, which the act defines as the "property exemption value," must be added back to the 23-mill charge-off.  The effect is the school district must include, in the taxable value of property in the district, the value of property in an incentive district that is exempted from taxation, causing an increase in property value and a decrease in state aid.
Grandfathered projects not included.  The act "grandfathers-in" certain types of "projects" (the development activities undertaken on parcels of property in an incentive district) by excluding from the school district's property exemption value the following property that was exempted from taxation pursuant to an ordinance or a resolution creating an incentive district, so that the value of the exempted property is not added back to the 23-mill charge-off:
(1) The aggregate value of improvements to parcels of real property in the school district exempted from taxation, if (a) the ordinance or resolution is adopted prior to January 1, 2006, and (b) the legislative authority of the municipal corporation or board of township trustees or county commissioners, prior to January 1, 2006, executes a contract or agreement with a developer, whether for-profit or not-for-profit, with respect to the development of a project undertaken or to be undertaken and identified in the ordinance or resolution, and upon which parcels the project is being, or will be, undertaken.
(2) The product determined by multiplying (a) the aggregate value of the improvements to parcels of real property in the school district exempted from taxation pursuant to any such ordinance or resolution, minus the aggregate value of any improvement excluded pursuant to (1), above, by (b) a fraction, the numerator of which is the difference between (i) the amount of anticipated revenue the school district would have received in the preceding fiscal year if the real property exempted from taxation had not been exempted, and (ii) the aggregate amount of payments and other compensation received in the preceding fiscal year by the school district pursuant to all agreements between the school district and the legislative authority or board that were entered into in relation to the ordinance or resolution, and the denominator of which is the amount of anticipated revenue the school district would have received in the preceding fiscal year if the real property exempted from taxation had not been exempted.
(3) The aggregate value of improvements to parcels of real property in the school district exempted from taxation pursuant to any such ordinance or resolution, if and to the extent that, on or before April 1, 2006, the fiscal officer of the municipal corporation that adopted the ordinance, or of the township or county that adopted the resolution, certifies and provides appropriate supporting documentation to the Tax Commissioner and the Director of Development that, based on hold-harmless provisions in any agreement between the school district and the legislative authority or board that was entered into on or before June 1, 2005, the ability or obligation of the municipal corporation, township, or county to repay bonds, notes, or other financial obligations issued or entered into prior to January 1, 2006, will be impaired, including obligations to or of any other body corporate and politic with whom the legislative authority or board has entered into an agreement pertaining to the use of service payments derived from the improvements exempted.
(4) The aggregate value of improvements to parcels of real property in the school district exempted from taxation pursuant to any such ordinance or resolution adopted prior to January 1, 2006, in a municipal corporation with a population that exceeds 100,000, that includes a major employment center, and that is adjacent to historically distressed neighborhoods, if the legislative authority of the municipal corporation or the board of township trustees or county commissioners that exempted the property prepares an economic analysis that demonstrates that all taxes generated within the incentive district accruing to the state by reason of improvements constructed within the district during its existence exceed the amount of base-cost funds the state pays the school district that are attributed to the property's exemption from the school district's recognized valuation.  The analysis must be submitted to and approved by the Department of Development prior to January 1, 2006, and the Department cannot unreasonably withhold approval.  The approval permits use of the aggregate value of the improvements for the life of the incentive district as designated in the ordinance or resolution creating it.
(5) The aggregate value of improvements to parcels of real property in the school district exempted from taxation under any such ordinance or resolution adopted before January 1, 2006, if service payments have been pledged to be used for mixed-use riverfront entertainment development in any county with a population that exceeds 600,000.
(6) The aggregate value of improvements to parcels of real property in the school district exempted from taxation under any such ordinance or resolution, if, prior to January 1, 2006, service payments have been pledged for a designated transportation capacity project approved by the Transportation Review Advisory Council.
(7) The aggregate value of improvements to parcels of real property in the school district exempted from taxation under any such ordinance or resolution, if, by January 1, 2006, proceeds have been pledged for designated transportation improvement projects that involve federal funds for which the proceeds are used to meet a local share match requirement for such funding.
Because of enterprise zone and similar property tax exemptions
As part of a school district's property exemption value, the act also requires the Tax Commissioner, beginning in fiscal year 2007, to certify to the Department of Education the aggregate value of real property in the school district, as indicated on the list of exempted property for the preceding tax year and as if the property had been assessed for taxation that year, for which an exemption from taxation is granted on or after January 1, 2006, pursuant to an agreement between the school district and another political subdivision that exempts property because it is part of urban renewal projects, community redevelopment programs (for blighted areas), community reinvestment programs, enterprise zones, local railroad operations, or programs for the remediation of contaminated property, but not including compensation for tax revenue foregone pursuant to an agreement entered into on or after January 1, 2006.
The amount certified by the Commissioner must be added back to the 23‑mill charge-off, except that the following amount is subtracted from a school district's property exemption value:  the product determined by multiplying (a) the aggregate value of the real property in the school district exempted from taxation under any of those programs, projects, or enterprise zones by (b) a fraction, the numerator of which is the difference between (i) the amount of anticipated revenue the school district would have received in the preceding fiscal year if the real property exempted from taxation had not been exempted, and (ii) the aggregate amount of payments and other compensation received in the preceding fiscal year by the school district pursuant to any agreements between the school district and the political subdivision that acted under the authority of law and that were entered into in relation to the exemption, and the denominator of which is the amount of anticipated revenue the school district would have received in the preceding fiscal year if the real property exempted from taxation had not been exempted.
Reporting requirements for school district treasurers
The act provides that on or before June 1 each year, beginning June 1, 2006, the Director of Development must certify to the Department of Education the total amount of payments received by each city, local, exempted village, or joint vocational school district during the preceding tax year pursuant to an agreement whereby the school district is compensated for tax revenue foregone as a result of property tax exemptions granted under an ordinance or resolution creating an incentive district.  On or before April 1 each year, beginning April 1, 2006, the treasurer of each city, local, exempted village, or joint vocational school district that has entered into such an agreement must report to the Director the total amount of payments the district received during the preceding tax year pursuant to the agreement.  The State Board of Education, in accordance with procedures established in continuing law, may suspend or revoke the license of a treasurer found to have willfully reported erroneous, inaccurate, or incomplete data regarding those agreements.  (However, the charge-off "add backs" do not apply to joint vocational school districts.)
Revised base-cost formula
(R.C. 3317.022)
The act uses the new base funding supplements, the phased-out cost-of-doing-business factor, and "add backs" of the valuation of some tax exempt property (all as described above) in setting forth the following revised formula for calculating a district's total base cost funding:
[(Cost-of-doing-business factor x formula amount x formula ADM) + the sum of all four of the base funding supplements] – [0.023 x (recognized valuation + "property exemption value")]
Base-cost formula for joint vocational school districts
(R.C. 3317.16)
Joint vocational school districts (JVSDs) are special taxing districts that provide career-technical instruction to high school students.  They are formed by agreements among two or more school districts.  The member districts send their students who wish to enroll in career-technical programs to the JVSD for those services.  In addition, JVSDs may enter into contracts with nonmember districts and schools to provide services specified in the contracts.
Under prior law and the act, a JVSD's base-cost funding and some of its categorical funding are calculated in the same manner as other school districts, except that its "charge off" is only ½ mill (or 0.0005) times its recognized valuation.  Under the act, the base-cost formula for JVSDs remains:
(Cost-of-doing-business factor x formula amount x formula ADM) –
(0.0005 x recognized valuation)
The base-cost formula for JVSDs under the act is essentially identical to the one for JVSDs under prior law.  The act does not provide for payment of base funding supplements to JVSDs.  Also, the act does not change the charge-off calculation for JVSDs.[33]  The act does, however, apply the new base-cost funding guarantee to JVSDs as well as city, exempted village, and local school districts (see below).
Base-cost funding guarantee
(R.C. 3317.022(A) and 3317.16(B))
The act guarantees that each city, exempted village, local, or joint vocational school district's state payment for base cost funding will be no lower than its fiscal year 2005 state aggregate or per pupil base cost payment, whichever is less.
To do so, the act requires the Department of Education to calculate both of the following for each district:
(1) The difference between the district's fiscal year 2005 base-cost payment and the base-cost amount computed for the district for the current fiscal year;
(2) [(fiscal year 2005 base-cost payment divided by fiscal year 2005 formula ADM) times current year formula ADM] minus the base-cost amount computed for the district for the current fiscal year.  This formula results in a per pupil fiscal year 2005 state base-cost amount multiplied by the district's current formula ADM.
If one of the amounts computed under (1) and (2) above is a positive amount, the Department must pay the district that amount in addition to the base-cost amount calculated for the district.  If both amounts are positive amounts, the Department must pay the district the lesser of the two amounts in addition to the base-cost amount calculated for the district.
Building blocks spreadsheet
(R.C. 3317.016)
In addition to the funding information for each district that the Department already has on its web site (that is, the district's form SF-3 and other forms that show how a district's funding is calculated), the act requires the Department to publish on its web site a spreadsheet for each district that indicates the "constituent components of the district's 'building blocks' funds."  Specifically, the act requires that the following information be included in each district's spreadsheet:
(1) Aggregate and per pupil amounts of state funds and of combined state and local funds for compensation of base classroom teachers;
(2) The average compensation decided by the General Assembly for base classroom teachers and the number of base classroom teachers attributable to the district based on the student-teacher ratio decided by the General Assembly;
(3) Aggregate and per pupil amounts of state funds and of combined state and local funds for each of the following:
(a) Other personnel support;
(b) Nonpersonnel support;
(c) Academic intervention services;
(d) Professional development;
(e) Data-based decision making;
(f) Professional development for data-based decision making; and
(g) Separate specifications for each of the eight components of the poverty-based assistance subsidy (see "Poverty-based assistance payments" below).
Spending requirements associated with the building blocks model
In general
(R.C. 3317.012(D))
The act states that the General Assembly intends that school districts spend the state funds calculated and paid for each component of the building blocks methodology (that is, the amount determined for base classroom teachers, other personnel support, and nonpersonnel support and the amount of base funding supplements paid to a district) for those specific purposes.
Academic watch and academic emergency districts
(R.C. 3317.017)
In addition, the act requires the Superintendent of Public Instruction, not later than July 1, 2006, to adopt a rule under which the Superintendent "may issue an order with respect to the spending, by a school district declared to be under an academic watch or in a state of academic emergency . . . of the following state building block funds intended to pay instructional-related costs" (including in many cases amounts received from the poverty-based assistance subsidy):
(1) Compensation of base classroom teachers;
(2) Academic intervention services;
(3) Professional development;
(4) Data-based decision making;
(5) Poverty-based assistance guarantee payment;
(6) All-day kindergarten payments;
(7) Class-size reduction;
(8) Services to limited English proficient students;
(9) Dropout prevention; and
(10) Community outreach.
The rule must authorize the Superintendent of Public Instruction to issue an order that does one or a combination of the following:
(1) Require the school district to periodically report to the Superintendent on its spending of the state funds paid for each building blocks component;
(2) Require the district to establish a separate account for each of the building blocks components; or
(3) Direct the district's spending of any or all of the state funds paid for the components.
The act also directs each school district board of education to comply with an order issued by the Superintendent.
Transitional aid
(Sections 206.09.39 and 206.09.42)
To protect districts from losses in state funding due to the act's funding formula changes, the act specifies that in both fiscal years 2006 and 2007, no city, exempted village, or local school district's "SF-3 funding plus charge-off supplement" be less than it was for the prior fiscal year.  Accordingly, the Department of Education must pay a district additional state funds, as necessary, to eliminate any decrease in either fiscal year.
A district's "SF-3 funding plus charge-off supplement" comprises most of the state subsidies paid to school districts, including base-cost, special education, vocational education, transportation, poverty-based assistance, gifted education units, GRADS subsidy for programs for parenting and pregnant students, adjustments for classroom teachers and educational service personnel, parity aid, state aid guarantee, reappraisal guarantee, and the charge-off supplement.
The act also requires the Department, when calculating the reappraisal guarantee for a district in fiscal year 2006, 2007, or 2008, to include any of these transitional aid payments it made to the district in the previous fiscal year.[34]
In addition, the act guarantees that no JVSD in either fiscal year will receive a decrease from the previous fiscal year in its "joint vocational funding."  The act defines "joint vocational funding" as the district's aggregate state funding for base-cost funding, special education, vocational education, GRADS, and the JVSD state aid guarantee.
Permanent state aid guarantee eliminated
(repealed R.C. 3317.0212 and R.C. 3317.16(H); conforming changes in R.C. 3314.08(A)(10), 3317.031, 3317.081, and 3317.09)
Prior law guaranteed that every city, exempted village, and local school district with a formula ADM over 150 would receive a minimum amount of total state aid (base cost and categorical funding) based on its state funds for fiscal year 1998.  The state funds guaranteed included the sum of base-cost funding, special education funding, vocational education funding, gifted education funding, DPIA funds, equity aid, state subsidies for teachers with high training and experience, and state "extended service" subsidies for teachers working in summer school.  The Department of Education was required to pay a district the difference between the amount calculated under the current formulas and the amount the district received in fiscal year 1998.  A similar guarantee applied to JVSDs.
The act eliminates both guarantees.
Application of funding formula changes to county MR/DD boards, community schools, open enrollment, and Post-Secondary Enrollment Options Program
(R.C. 3313.98, 3314.08, 3317.20, and 3365.01)
The act applies its new base-cost formula to funding for county MR/DD boards, community schools (charter schools), interdistrict open enrollment, and the Post-Secondary Enrollment Options Program.  In doing so, it provides that per pupil payments for participants under those provisions will be determined based on the formula amount times the phased-out cost-of-doing-business factor plus a per pupil amount of the four new base funding supplements.
Twice-annual reporting of formula ADM
(R.C. 3317.01, 3317.02, and 3317.03)
"Formula ADM" (average daily membership) is the figure that represents for school funding purposes each school district's full-time-equivalent enrollment. Under prior law, each city, exempted village, and joint vocational school district certified its formula ADM once annually for the first full week of October.[35]  Prior law also permitted a school district to report any increase in its formula ADM for the first full week of February that amounted to at least 3% over the count of the previous October.  In such case, the district's payments for the balance of the fiscal year were to be based on the higher formula ADM.
Beginning in fiscal year 2006, the act requires every school district to certify its formula ADM twice each fiscal year.  The first count is the traditional count for the first full week of October, as under prior law.  The second count is to be for the third full week of February.  If a school is closed one or more days that week due to hazardous weather conditions or for other statutorily prescribed public calamities, the district may seek a waiver from reporting the formula ADM of that school for that week.[36]  If the Superintendent of Public Instruction grants the waiver, the Superintendent must specify an alternative date for certifying the formula ADM of that school.
The act prescribes that the October certification be used to calculate the district's state payments for the months of July through December of the fiscal year and that the average of the February and October certifications be used to calculate payments for the months of January through June.[37]  Also, in the case of the February certification (or the alternate week if applicable), the act authorizes a district to include in its formula ADM any students who were included in the October count but who since then have received their high school diplomas.
Recommended plan for second annual ADM certification
(Section 206.10.24)
The act provides that, regardless of its changes regarding the reporting of formula ADM (as described above), the Superintendent of Public Instruction, not later than July 1, 2006, must recommend to the General Assembly a plan for reporting of formula ADM twice each year.  The plan is to include provisions whereby:
(1) School districts make a second annual certification of formula ADM in the second half of each fiscal year, prior to the first day of April; and
(2) This second annual certification of formula ADM may be used to guarantee a minimum level of state funding to each school district for the next fiscal year, with sufficient notice so that the districts may prepare in advance of each school year.
The recommended plan also must include methods to accommodate enrollment growth trends in fast-growing districts.
Random audits of school district ADM reports
(R.C. 3317.035)
The act permits, but does not require, the Auditor of State to conduct annual random, select audits of the average daily membership information reported by school districts to the Department of Education.
Parity aid
(R.C. 3317.0217)
Background
In 2001, the General Assembly began phasing in a new subsidy known as "parity aid," to replace equity aid and another former subsidy known as "power equalization."  The parity aid subsidy pays additional state funds to school districts based on combined income and property wealth.  For most eligible school districts, the subsidy is the difference between what a specified number of mills will raise in the 123rd wealthiest district, or in other words the district in the 80th percentile of wealth, and what that same number of mills will raise in the district for which the subsidy is being calculated.  The amount of the subsidy, therefore, varies depending on how far below the 80th percentile a district is ranked.  The 123 districts with the highest income-adjusted valuations are not eligible for the subsidy.  There also is an alternative formula for calculating parity aid for districts that might not otherwise qualify but that experience a combination of lower incomes, higher poverty, and higher business costs than the statewide median of these variables.
Changes in the parity aid calculation
Under prior law, the millage rate used to compare the revenue power of most of the districts eligible for parity aid was 9.5 mills.  That rate represented the General Assembly's determination of the average number of "effective operating mills" (including school district income tax equivalent mills) that school districts in the 70th to 90th percentiles of property valuations levied in fiscal year 2001 beyond the millage needed to finance their calculated local shares of base-cost, special education, vocational education, and transportation funding.  The act revises the formula for calculating parity aid by basing it on what 7.5 mills would raise in the 123rd highest ranked district, instead of 9.5 mills.  The act states that this change is to account for the General Assembly's policy decision to phase-out use of the cost-of-doing-business factor in the base cost formula.
The act also conforms the parity aid calculation to the policy changes elsewhere in the act prohibiting the payment of parity aid to Internet- or computer-based community schools (e-schools).  The act essentially removes students attending e-schools from a district's formula ADM for purposes of determining a district's parity aid.  It also removes from a district's formula ADM for that same purpose students receiving scholarships under the Educational Choice Scholarship Pilot Program.
Full funding of parity aid
Prior law provided that state parity aid payments for fiscal year 2005 be 76% of the amount calculated, and for fiscal years thereafter be 100% of the amount calculated.  The act retains the full-funding provision for the revised formula.
Poverty-based assistance--background
Prior law provided for an additional, nonequalized state subsidy to be paid to school districts with threshold percentages of resident children from families receiving public assistance.  Known as "disadvantaged pupil impact aid" or "DPIA," the amount of the subsidy depended on the district's "DPIA index," its percentage of children receiving public assistance compared to the statewide percentage of such children.  The act renames and substantially revises the DPIA subsidy, retaining some of the components of prior law.
Under that prior law, three separate calculations determined the total amount of a district's DPIA funds:
(1) Any district with a DPIA index greater than or equal to 0.35 (meaning its proportion of children receiving public assistance was at least 35% of the statewide proportion) received money for safety and remediation.  Districts with DPIA indexes between 0.35 and 1.00 received $230 per pupil in a public assistance family.  The per pupil amount increased proportionately for districts whose indexes were greater than 1.00.
(2) Districts with a DPIA index greater than 0.60 received an additional "third grade guarantee" or "class-size reduction" payment for increasing the amount of instructional attention per pupil in grades K to 3.  The amount of the payment increased with the DPIA index.
(3) Districts with either a DPIA index equal to or greater than 1.0 (having at least the statewide average percentage of public assistance children) or a three-year average formula ADM exceeding 17,500, and that offer all-day kindergarten under prior law received state funding for the additional half day.  This payment is retained by the act largely as provided under prior law.
Regardless of index, prior law also provided that all districts were eligible for at least the amount of DPIA funding they received during fiscal year 1998.
Poverty-based assistance payments
(R.C. 3317.029; conforming changes in R.C. 3314.03, 3314.08, 3314.13, 3317.0212, 3317.0217, and 3317.10)
The act revises the Disadvantaged Pupil Impact Aid (DPIA) subsidy, and renames the subsidy as "poverty-based assistance."  The revisions consist of changes to the components of the prior DPIA subsidy, plus a phase-in of four new components.
Poverty index
(R.C. 3317.029(A))
As with the former DPIA subsidy, the amount of poverty-based assistance paid to a school district will depend on its percentage of children receiving public assistance, compared to the statewide percentage--a relative measure called the "poverty index" (formerly, the "DPIA index").  For example, a school district with a poverty index of 1.0 has the same proportion of children living in families receiving public assistance as the state as a whole.  A district with a poverty index of 0.25 has a proportion of children receiving public assistance that is 25% of the statewide proportion.  A district with a poverty index of 1.25 has a proportion of children receiving public assistance that is 125% of the statewide proportion.
Under prior codified law, the index accounted for each district's five-year average proportion of children ages 5 to 17 whose families (1) have incomes not exceeding the federal poverty guidelines[38] and (2) participate in one of the following programs:
(a) Ohio Works First;
(b) Food Stamps;
(c) Medicaid;
(d) The Children's Health Insurance Program ("CHIP"); or
(e) The state Disability Medical Assistance program.
Although the use of multiple indicators for calculating the index was enacted in 2001, they were never used due to overriding temporary provisions that delayed their use.  The act permanently precludes the use of these multiple indicators (including the requirement to include families with incomes that do not exceed federal poverty guidelines).  Instead, a district's index under the act (as under prior temporary law) continues to be based only on the proportion of its students living in families receiving assistance under Ohio Works First.
Guaranteed minimum payment
(R.C. 3317.029(B))
The act guarantees that each school district annually will receive poverty-based assistance that is at least equal to its fiscal year 2005 DPIA payment, instead of its fiscal year 1998 payment as under prior law.  If the sum of the various components of the new subsidy does not equal the district's fiscal year 2005 DPIA payment, the district receives the amount of its fiscal year 2005 payment.[39]
All-day kindergarten payment
(R.C. 3317.029(D))
The act does not substantially revise the payment for all-day kindergarten.  Therefore, districts with a poverty index greater than or equal to 1.0, or a three-year average formula ADM exceeding 17,500 students, and that offer all-day kindergarten continue to receive state funding for the additional half-day for their kindergarten students.  However, the act does codify a customary temporary provision that permits a district that received an all-day kindergarten payment in the previous year to continue to receive that payment even if its index falls below 1.0.
Academic intervention payment
(R.C. 3317.029(C), (J)(6), and (M)(2))
The act replaces the former "safety, security, or remediation" payment with a new, phased-in, three-tier payment designated for "academic intervention" paid to districts with a poverty index greater than or equal to 0.25.  The act refers to the respective tiers as "level one," "level two," and "level three," each with its own formula for calculating payments to eligible districts.  All three payments are phased in at 60% of the calculated amounts in fiscal year 2006 and 100% of the calculated amounts in fiscal year 2007.
Level one. Level one is designated for "large-group academic intervention for all students" for districts with poverty indexes of 0.25 and higher.  Districts with poverty indexes of 0.75 and above receive the maximum calculation, whereas districts with indexes between 0.25 and 0.75 are paid on a sliding scale.  The payment is based on $20 per hour for 25 hours in fiscal year 2006, and $20.40 per hour for 25 hours in fiscal year 2007, for every 20 students in a district's formula ADM. 
Level two.  Level two is designated for "medium-group academic intervention for all students" for districts with poverty indexes of 0.75 and higher.  Districts with poverty indexes of 1.50 and above receive the maximum calculation, whereas districts with indexes between 0.75 and 1.50 are paid on a sliding scale.  The payment is based on $20 per hour for 50 hours in fiscal year 2006, and $20.40 per hour for 50 hours in fiscal year 2007, for every 15 students in a district's formula ADM.
Level three.  Level three is designated for "small-group academic intervention for impoverished students" for districts with poverty indexes of 1.50 and higher.  Districts with poverty indexes of 2.50 and above receive the maximum calculation, whereas districts with indexes between 1.50 and 2.50 are paid on a sliding scale.  The payment is based on $20 per hour for 160 hours in fiscal year 2006, and $20.40 per hour for 160 hours in fiscal year 2007, for each "small group intervention unit."  The act defines that unit as (the district's poverty student count times 3) divided by 10.
Poverty-Based Assistance Academic Intervention Payment

Level One
Level Two
Level Three
FY 2006FY 2007FY 2006FY 2007FY 2006FY 2007
Phase-in
60%
100%
60%
100%
60%
100%
Hourly Rate
$20.00
$20.40
$20.00
$20.40
$20.00
$20.40
Hours
25
25
50
50
160
160
Unit SizeFormula ADM divided by 20Formula ADM divided by 15(Poverty student count times 3) divided by 10
Sliding Scale PaymentSchool districts with poverty indexes between 0.25 and 0.75School districts with poverty indexes between 0.75 and 1.50School districts with poverty indexes between 1.50 and 2.50
Max. PaymentSchool districts with poverty indexes of 0.75 or higherSchool districts with poverty indexes of 1.50 or higherSchool districts with poverty indexes of 2.50 or higher


Use of the payment.  The act requires all school districts, regardless of index, that receive the new "academic intervention" payment to use it for academic intervention services for students who have failed or are in danger of failing any of the state achievement tests, including intervention services required under the third-grade reading guarantee.[40]  The act also prohibits any collective bargaining agreement entered into after June 30, 2005 (the act's effective date) from requiring use of the district's academic intervention payment for any other purpose.
Deployment plan.  The act also requires any district that receives a level two or level three payment to submit to the Department of Education an annual plan describing how the district will deploy those funds.  This deployment must conform to the spending prescriptions described above and with any order issued by the Superintendent of Public Instruction (see "Spending requirements associated with the building blocks model" above).
K to 3 class-size reduction payment
(R.C. 3317.029(E) and (J)(7))
The third component of the former DPIA subsidy, the so-called "class-size reduction" payment, was intended to assist districts to increase instructional attention for students in grades K to 3.  It was paid on a sliding scale based on the amount of money it would take to hire additional teachers to reduce class sizes in those grades, although districts' strategies to increase instructional attention did not have to include hiring more teachers.
The act retains this component within the new poverty-based assistance subsidy, but it raises the eligibility threshold to a poverty index of 1.0, instead of 0.60 under prior law.  It also revises the payment formula by (1) reducing the imputed teacher-pupil ratio from 23:1 to 20:1 for districts at the bottom of the sliding scale and (2) reducing the threshold index at the top of the scale to a poverty index of 1.5, instead of 2.5 under prior law.  The first change (assuming a ratio of 20:1 instead of 23:1) decreases the number of imputed teachers and, therefore, the amount of funding needed to reduce class sizes further.  The second change (lowering the top of the scale to an index of 1.5 instead of 2.5), however, qualifies more districts for full funding instead of a sliding scale payment.
Average teacher salary.  One of the variables of the class-size reduction payment formula is the statutorily designated statewide average teacher salary.  This amount was last set at $43,650 for fiscal year 2003.  The act sets it at $53,680 for fiscal year 2006 and $54,941 for fiscal year 2007, which also are the base classroom teacher compensation amounts prescribed under the act (see "New "building blocks" methodology" above).
Payment for services to limited-English proficient students
(R.C. 3317.029(F) and (J)(2))
The act phases in a new poverty-based component to assist with services to students who are limited-English proficient.  To qualify for this payment, both of the following must apply:
(1) The district's poverty index must be 1.0 or higher; and
(2) The proportion of the district's students who were limited-English proficient in the 2002-2003 school year must have been at least 2%, as reported by the Department of Education on the district's state report card.
The payment formula is a sliding scale that ranges from 12.5% of the base-cost formula amount ($660 in fiscal year 2006) per limited-English proficient student for a district with a poverty index equal to 1.0, to 25% ($1,321 in fiscal year 2006) of the base-cost formula amount per limited-English proficient student for districts with a poverty index of 1.75 or higher.  However, this subsidy is phased-in, with districts eligible for 40% of the formula calculation in fiscal year 2006 and 70% in fiscal year 2007.
Counting limited-English proficient students after fiscal year 2007.  In fiscal years 2006 and 2007, the per student amount calculated by the formula is to be multiplied by the number of the district's limited-English proficient students in the 2002-2003 school year, as determined when the Department calculated the district's limited-English proficient percentage on the state report cards.  The act requires the Department, by December 31, 2006, to recommend to the General Assembly and the Director of Budget and Management a new method of identifying the number of limited-English proficient students for purposes of calculating payments after fiscal year 2007.
Use of the payment.  Each school district must use its payment for services to limited-English proficient students, in one or more of the following ways:
(1) To hire teachers for limited-English proficient students or other personnel to provide intervention services for those students;
(2) To contract for intervention services for those students; or
(3) To provide other services to assist those students in passing the third grade reading achievement test, and to provide the statutorily mandated intervention services to those students who have not passed that test.
Professional development payment
(R.C. 3317.029(G) and (J)(3))
A second new component for poverty-based assistance that the act phases in is a payment for professional development of teachers, payable to districts with poverty indexes greater than or equal to 1.0.  The payment is a percentage of the base-cost formula amount, multiplied by an imputed number of teachers.  For this purpose, the act calculates each eligible district's number of teachers by dividing its formula ADM by 17.  The per teacher amount is set on a sliding scale for districts with poverty indexes greater than or equal to 1.0 but less than 1.75.  For districts with poverty indexes of 1.75 or higher, the per teacher payment is 4.5% of the base-cost formula amount ($238 in fiscal year 2006) per teacher.  However, the act phases in this component by directing that districts be paid for 40% of the formula calculation in fiscal year 2006 and 70% in fiscal year 2007.
Use of the payment.  A district must use its professional development payment for professional development of teachers or other licensed personnel providing educational services to students as follows:
(1) The professional development must be in one or more of the following areas:  (a) data-based decision making, (b) standards-based curriculum models, or (c) job-embedded professional development activities that are research-based, as defined in federal law; and
(2) The professional development program must be on the Department of Education's list of eligible programs, unless the Department grants the district a waiver to implement an alternative program.
Dropout prevention payment
(R.C. 3317.029(H) and (J)(4))
The act phases in a poverty-based component for dropout prevention programs in the "Big-Eight" school districts (Akron, Canton, Cincinnati, Cleveland, Columbus, Dayton, Toledo, and Youngstown).  This component pays an amount for each student in the district's formula ADM.  That amount is 0.5% of the base-cost formula amount ($26 in fiscal year 2006), multiplied by the district's poverty index.  Therefore, the higher a district's poverty index, the higher its per pupil payment.  For example, if a district's poverty index is 1.5, the per pupil payment would be (0.5% x formula amount x 1.5), which equals 0.75% of the formula amount ($40 in fiscal year 2006).  If the district's poverty index is 2.5, the per pupil payment would be (0.5% x formula amount x 2.5), which equals 1.25% of the formula amount ($66 in fiscal year 2006).
However, all calculated amounts are phased in at 40% for fiscal year 2006 and 70% for fiscal year 2007.
Use of the payment.  The Big-Eight districts must use their dropout prevention payment for one or a combination of the following purposes:
(1) Preventing at-risk students from dropping out of school;
(2) Implementing programs designed to ensure that schools are free of drugs and violence and have a disciplined environment conducive to learning; or
(3) Academic intervention services.
If a district elects to use all or part of the payment for dropout prevention, it must implement a program on a list provided by the Department of Education, unless the Department grants the district a waiver to implement an alternative program.
Community outreach payment
(R.C. 3317.029(I), (J)(5), and (M)(3))
The last new component of poverty-based assistance that the act phases in is a payment for community outreach services.  Only the state's 21 urban districts are eligible for this payment.  The payment is calculated in the same manner as the dropout prevention payment for Big-Eight districts:  0.5% times the formula amount times the district's poverty index times the district's formula ADM, phased in at 40% in fiscal year 2006 and 70% in fiscal year 2007.
Use of the subsidy.  Districts that receive a community outreach payment must use it for one or a combination of the following purposes:
(1) To hire or contract for community liaison officers, attendance or truant officers, or safety and security personnel;
(2) To implement programs designed to ensure that schools are free of drugs and violence and have a disciplined environment conducive to learning; or
(3) To implement academic intervention services.
Spending prescriptions
(R.C. 3317.029(J) and (M))
As with the former DPIA subsidy, the act establishes guidelines for spending poverty-based assistance, with the strictest guidelines applying to districts with poverty indexes of 1.0 or higher (the districts that receive most of the subsidy).
Poverty indexes of 1.0 or higher.  Districts with poverty indexes of 1.0 or higher must spend their poverty-based assistance first to provide all-day kindergarten to all of the kindergartners they certified when they requested an all-day kindergarten payment.  They then must follow the spending guidelines established for the payments for academic intervention, limited-English proficient students, professional development, dropout prevention, and community outreach, described above.
The act retains the provision of prior law requiring these districts to use whatever remains of their poverty-based assistance payment (mostly the class-size reduction payment) for increasing the amount of instructional attention to students in grades K to 3, either by reducing the ratio of students to instructional personnel (teachers, aides, or paraprofessionals) or by undertaking other initiatives that have the effect of increasing the length of the school day or school year.
Poverty indexes below 1.0. Although most of the poverty-based assistance subsidy is designated for districts with poverty indexes of 1.0 or higher, it is possible for districts with indexes below 1.0 to receive a subsidy.  The act prescribes spending for those districts, as follows:
(1) All school districts with poverty indexes between 0.25 and 1.0 are eligible for a level one academic intervention payment.  As it does for all other school districts, the act (a) requires these districts to use this payment solely for academic intervention services for students who have failed or are in danger of failing any of the state achievement tests and (b) prohibits any collective bargaining agreement entered into after June 30, 2005 (the act's effective date) from requiring use of this payment for any other purpose.
(2) An Urban-21 district is eligible for the community outreach payment, regardless of its index, and must abide by the spending requirements attached to that payment (see "Community outreach payment" above).
(3) As under prior law, a school district may receive a payment for all-day kindergarten, regardless of its index, if it either (a) has a three-year average formula ADM of 17,500 or higher or (b) received an all-day kindergarten payment in the previous year.  As under prior law, the district must ensure that all-day kindergarten is provided to at least the percentage of kindergartners it certified would receive it.
(4) A district that received a DPIA subsidy in FY 2005 is guaranteed to receive at least that amount in future fiscal years.
For districts with indexes below 1.0 that receive a guarantee payment or have money remaining after paying for all-day kindergarten, the act restricts how the districts may spend the money to an itemized list of services.  This list is essentially the same as specified in prior law.  But where prior law required the districts to spend at least 70% of their DPIA funds for one or more services on the list, the act requires them to spend 100% of their guarantee or leftover all-day kindergarten payment for services on the list.
Report on spending prescriptions
(Section 206.09.37)
The act requires the Department of Education to review the spending requirements for poverty-based assistance and submit a report recommending modifications, by March 31, 2007, to the Director of Budget and Management, the Speaker of the House, and the President of the Senate.  The recommendations must include "decreasing degrees of flexibility of spending for districts not meeting adequate progress standards as defined by the Department."  The Department must specifically review the requirements for increasing instructional attention to children in grades K to 3 with the class-size reduction payment.  The Department must use reports submitted by school districts concerning intervention funding to inform its recommendations.[41]
Transportation subsidy
(Section 206.09.21)
Background
Each school district is eligible for a subsidy for transporting students to and from school.[42]  Like other categorical subsidies, the amount calculated is shared between the district and the state.  The amount of additional state funding paid for transportation is the greater of 60% or the district's state share percentage of the amount calculated by the formula.
The formula itself is based on the statistical method of multivariate regression analysis.[43]  Under this formula, each district's payment for transportation of students on school buses is based on (1) the number of daily bus miles traveled per day per student in the previous fiscal year and (2) the percentage of its student body that it transported on school buses in the previous fiscal year (whether the buses were owned by the district board or a contractor).[44]  The Department of Education updates the values for the formula and calculates the payments each year based on analysis of transportation data from the previous fiscal year.  The Department must apply a 2.8% inflation factor to the previous year's cost data.  There is a separate "rough road subsidy" targeted at relatively sparsely populated districts where there are relatively high proportions of rough road surfaces.
Payments for fiscal years 2006 and 2007
Instead of calculating the transportation subsidy as otherwise required under codified law, the act specifies that each district's transportation subsidy in each of fiscal year 2006 and 2007 be 2% greater than it was in the previous fiscal year.  (For purposes of computing a school district's charge-off supplement and excess cost supplement, the local share of the calculated amount for transportation is 2% greater than in the previous year.)  Districts that did not receive a state subsidy for transportation in fiscal year 2005 are not eligible for transportation funding in either fiscal year 2006 or 2007.
Recommendations for formula changes
The act requires the Department of Education, by July 1, 2006, to submit to the Director of Budget and Management, President of the Senate, and Speaker of the House recommendations for a new transportation funding formula.
Special education weighted funding
(R.C. 3317.013)
Background
School districts are eligible to receive an additional amount per pupil for providing special education and related services to each student who is identified as a disabled student.[45]  The amount of additional funding is calculated as a weight (or multiple) applied to the base-cost formula amount that represents an expression of additional costs attributable to the special circumstances of the students in each class.  For example, a weight of 0.25 would indicate that an additional 25% of the formula amount is presumed necessary to provide additional services to a student in that category.  Each school district is paid its "state share percentage" of the additional weighted amount.
The following weights are prescribed by continuing law for special education and related services.[46]

Continued phase-in of special education weights
Prior law provided that the special education weights were to be paid at 88% in fiscal year 2004 and 90% in fiscal year 2005, but it did not provide any phase-in percentages for subsequent fiscal years.  The act specifies that the special education weights continue to be paid at 90% in both fiscal years 2006 and 2007.
Threshold catastrophic amount
(R.C. 3317.022(C)(3))
In addition to the prescribed weighted amount, school districts and community schools may receive a "catastrophic cost" subsidy for some special education students if the costs to serve the students exceed the prescribed "threshold catastrophic cost."  A school district may receive the sum of (1) one-half of the district's costs in excess of the threshold amount and (2) one-half of those costs times the district's state share percentage.  A community school may receive 100% of the amount of its costs in excess of the threshold amount.[47]
The act increases the catastrophic threshold amount to $26,500 for categories two through five (from $25,700 as under prior law) and to $31,800 for category six (from $30,800 as under prior law).
Speech-language services subsidy
(R.C. 3317.022(C)(4) and 3317.16(D)(2))
A separate subsidy for speech-language pathology services pays school districts their state share percentage of one "personnel allowance" for every 2,000 students in their formula ADMs.  The act maintains the personnel allowance at $30,000, which has been the amount of the allowance since fiscal year 2002.
Special education transportation subsidy
(R.C. 3317.024(J))
School districts and educational service centers are eligible for an additional subsidy for transporting disabled students who cannot be transported by a regular school bus.  Prior law referred only to "developmentally handicapped" students in authorizing this additional payment.  The act provides instead that the subsidy applies to all disabled students.
Special education funding report
(R.C. 3317.013)
The act requires the Department to submit a report to the Office of Budget and Management by May 30, 2006 and 2007, that specifies for each school district the amount of local, state, and federal pass-through funds allocated for special education and related services.  The Department was previously required to submit such a report on May 30, 2004 and 2005.
Payment of special education excess costs to JVSDs
(R.C. 3317.16(G)(3) and (4))
In some cases, the money a JVSD receives from the calculated state and local shares may not cover the actual cost of providing special education and related services to the disabled students enrolled in the JVSD.  Continuing law requires that the portion of the cost of providing those services by a JVSD that exceeds the calculated state and local shares of base-cost and special education funding be paid by the student's resident district or, if the student is also enrolled in a community school, by that school.  (The student's resident school district or community school is legally responsible for the student's services.)  Prior law required the Department of Education to deduct these excess costs from the account of the resident district or community school and pay that amount to the JVSD.  The act permits a JVSD to decline having the Department transfer payments for excess costs and, presumably, to rely instead on a direct payment from the district or community school.
Payment of excess costs for children in residential "homes"
(R.C. 3323.14; conforming changes in R.C. 3314.08(A)(10) and 3317.023(N))
The act authorizes a school district that is providing special education and related services to a child who has been placed by court order in a residential "home" (that is a home, institution, foster home, group home, or other residential facility that receives or cares for children) to charge excess costs to the child's district of residence (generally, where the child's parent resides).  The district educating the child may request the Department of Education to credit it with the amount of the excess costs and deduct that amount from the child's district of residence.
Switch to weighted special education funding for state institutions
(R.C. 3317.201; conforming changes in R.C. 3317.03(G)(1), 3317.05(D), 3317.052, 3317.053, 3323.091, and 3323.16)
The Department of Mental Health, Department of Mental Retardation and Developmental Disabilities, Department of Rehabilitation and Correction, and Department of Youth Services are required under continuing law to provide special education programs for the disabled children in their custody.  Each operates its own schools at the institutions under its control.
Under prior law, the institutions could apply for state unit funding to defray the cost of special education services.  (A "unit" is a group of students receiving the same education program.  The value of a unit is generally the sum of the annual salary of the unit's classroom teacher based on the state's former minimum teacher salary schedule in effect prior to 2001, an amount for fringe benefits equal to 15% of the salary allowance, a basic unit allowance, and a supplemental unit allowance.[48])
The act requires, instead, the payment of per pupil weighted funding to these institutions for school-age special education students in their custody.  Each institution is to receive for each identified pupil an amount equal to the base-cost formula amount times the multiple assigned to the category of that pupil's disability (including the phase-in percentage).  However, the act also specifies that an institution must receive in aggregate for all its school-age disabled children as much state funding as it did in fiscal year 2005 under unit funding.
The act leaves unchanged provisions for unit funding for preschool children receiving special education services from institutions, except for a change in the date for counting students in applicable units (see below).
Date for counting of students in handicapped preschool units
(R.C. 3317.05(D) and (E))
State and federal law both mandate a free, appropriate public education for preschool children who are identified as disabled, whom state law refers to as "handicapped preschool children."[49]  School districts, educational service centers, state institutions, community schools, and county MR/DD boards all may receive unit funding (as described above) for services for handicapped preschool children.  To be counted in a handicapped preschool unit, under prior law, a child had to be less than six years old as of December 1.  The act provides instead that a child must be at least three but less than six years old as of either September 30, or August 1 if the child's school district has adopted a resolution prescribing August 1 as the date by which children must be five or six years old, respectively, to be enrolled in kindergarten or first grade.[50]
Unit funding for preschool special education related services
(R.C. 3317.05(C))
As noted above, school districts, state institutions, community schools, and county MR/DD boards are required to provide special education and related services for identified handicapped preschool children enrolled in their schools and may receive state unit funding for those services.  However, prior law authorizing the Department of Education to grant units for preschool related services mentioned only "child study, occupational, physical, or speech hearing therapy, supervisors, and special education coordinators" as services for which related services units may be granted.  The act clarifies that units may be granted for any of the related services defined in continuing state law regarding services to handicapped children.  That law defines related services as including transportation, developmental, corrective, and other supportive services as may be required to assist a handicapped child to benefit from special education (including the early identification and assessment of disabilities in children, speech pathology and audiology, psychological services, occupational and physical therapy, physical education, recreation, counseling services, and medical services).[51]
Report on the number of handicapped preschool children served
(R.C. 3323.20)
The act requires the Department of Education, by July 1 of each year (beginning in 2006), to report to the General Assembly by electronic means the number of handicapped preschool children who received services during the previous fiscal year for which the Department paid a provider.  The report must disaggregate the data according to each category of handicap (as used to determine the weights for purposes of funding special education and related services to school-age children) regardless of whether those weights are used to fund services to those preschool children (see "Special education weighted funding, Background" above).[52]
GRADS personnel allowance
(R.C. 3317.024(R))
School districts may receive an extra subsidy for operation of a "graduation, reality, and dual-role skill" (GRADS) program for pregnant and parenting students.  The payment is the district's state share percentage times the "personnel allowance" times the full-time-equivalent number of GRADS teachers approved for the district by the Department of Education.  The act specifies that the GRADS personnel allowance for fiscal years 2006 and 2007 is $47,555 (which is the same amount prior law specified for fiscal years 2004 and 2005).
Repeal of equity aid statute
(repealed R.C. 3317.0213; conforming changes in R.C. 3314.08 and 3317.081)
The act repeals outright the Revised Code provision specifying the payment of equity aid.
From fiscal year 1993 through fiscal year 2005, an "equity aid" subsidy was paid to certain school districts with relatively low property wealth.  Since fiscal year 1998, the state has been phasing out equity aid by reducing the number of districts receiving the subsidy and decreasing the number of extra mills equalized under it for each fiscal year.  Prior law specified that no equity aid payments be paid after fiscal year 2005.
Recalculating school district valuations
(R.C. 3317.026, 3317.027, and 3317.028)
A school district's tax valuation may be recalculated after its state funding for a fiscal year has been calculated and even paid.  The recalculations might be triggered by refunds paid to certain taxpayers, adjustments made due to valuation or assessment complaints filed by taxpayers, or creation of new tax exemptions.  Each may reduce the actual revenue received by a district without a corresponding reduction in the value of the tax duplicate.  There also may be fluctuations in tangible personal property valuation during a fiscal year that affect a district's revenue.[53]  In all these cases, continuing law provides for a recalculation of a district's state aid to account for reduced property valuation.
These adjustments under prior law had to be paid on or before June 30 of the year the adjustments are made.  But the act provides, instead, that they be paid on or before July 31 of the following fiscal year (thereby pushing the payment into the next fiscal year).  The act also specifies that the recalculation of state aid for a district applies to the district's entire "SF-3 payment," which the act defines as comprising the aggregate of most state subsidies, less mandated adjustments and transfers.
One change that can prompt the recalculation of a district's state aid is an increase or decrease of 5% or more in the value of tangible personal property.  The act provides that, beginning in fiscal year 2007, only such changes in public utility tangible personal property can prompt a recalculation.
Changes in charge-off supplement ("gap aid")
(R.C. 3317.0216)
Background
Certain school districts are not able to achieve 23 effective mills to cover their assumed local share of the base cost.  In other cases, districts' effective tax rates will not cover their assumed local shares of special education, vocational education, and transportation funding.  In such cases, the state provides a subsidy to make up the "gap" between the districts' effective tax rates and their assumed local shares for base-cost, special education, vocational education, and transportation.
Revenue considerations
For purposes of the supplement, under continuing law, the Department of Education is required to compare a district's charge-off amount (that is the amount presumed to be raised by 23 mills) and its local share of combined special education, vocational education, and transportation funding with the actual amount of taxes charged and payable for the district.  If the tax revenue is not greater than either of the two presumed local shares, the Department must pay the district the difference.
The act adds to the revenue considered to be received by a school district, for purposes of calculating the supplement, the payments a school district receives from the Tangible Personal Property Tax Replacement Fund or the General Revenue Fund for current expense taxes lost due to the act's phase-out of the tangible personal property tax (see "Phase-out of tax on business personal property" below).  It does not take into account any funds received for purposes other than current expenses.
Any district that receives payments for loss of tangible personal property tax for current expenses likely would receive less funding under the charge-off supplement than it would otherwise receive under the supplement.
Phase-down of supplement for districts passing taxes
Districts that receive this "gap aid" potentially face losing it if their voters approve new property or income taxes.  New taxes can disqualify a district for the supplement in the first fiscal year that the taxes are counted in the funding formulas (for example, tax year 2005 taxes are used in fiscal year 2007 state funding calculations).  The act prescribes a method to phase-down the payment over three years, rather than end it immediately.
Specifically, the Department of Education must make the payments to a district that previously received gap aid but becomes ineligible if (1) the ineligibility is the result of a property tax or income tax levy approved for tax year 2005 or later and (2) the Department determines that the levy exceeded, by at least one mill, the millage-equivalent amount of its previous gap aid payment.  For the next three years, rather than losing its entire gap aid subsidy, the district would receive 75%, 50%, and 25%, respectively, of its last full gap aid payment.
A district may receive the phase-out payments only once.  Therefore, if the district were again to qualify for gap aid, it could not also again receive the phase-down payments should a subsequent levy render it ineligible.
Bus purchase subsidies
(R.C. 3317.07)
School districts and county MR/DD boards are eligible to receive additional state subsidies to purchase buses to transport certain students who live more than one mile from school.  Under prior law, a school district could receive 100% of the net cost of acquiring buses for the transportation of special education students and students attending nonpublic schools.  County MR/DD boards also could receive 100% of the net cost of acquiring buses for special education students.  Some districts applying for the subsidy would be denied in order to remain within the appropriated amount.
In both cases, the act prescribes that the subsidy be paid on a "per pupil allocation."  Presumably, under the act, the subsidy would be based on an allocation of the total amount appropriated for the subsidy on a per pupil basis among all district and county MR/DD boards that apply for the subsidy.
Reimbursement of school district share of Medicaid expenses
(R.C. 3317.023(O))
Federal law requires a recipient of federal funds for the provision of Medicaid services to pay a portion of the cost of those services with nonfederal funds.  Payment for Medicaid services must be on a reimbursement basis after the services have been provided.  The act requires the payment and deduction of a school district's share of such expenses upon reimbursement.  Under the act, if the Department of Job and Family Services (ODJFS), which is responsible for distributing federal Medicaid reimbursements, presents to the Department of Education (ODE) a request for payment for the nonfederal share of reimbursements made to a school district, ODE must pay the amount of that request to the ODJFS and deduct the amount of the payment from the district's state aid account.
Annual reporting by state institutions operating vocational education programs
(R.C. 3317.052)
The Department of Mental Health, Department of Mental Retardation and Developmental Disabilities, Department of Rehabilitation and Correction, and Department of Youth Services receive funding for vocational educational services, if they provide those services, on a "unit" basis.  The act adds a requirement that each institution that receives vocational education unit funding annually must report to the Department of Education on the delivery of services and the performance of students and any other information required by the Department to evaluate the institution's vocational education program.
Cap on reimbursement of nonpublic school administrative expenses
(R.C. 3317.063)
Continuing law requires the Superintendent of Public Instruction to annually reimburse chartered nonpublic schools for the administrative and clerical costs they incur from complying with state mandates.  Payment may be made only upon the school's submission of an application containing evidence of the costs.   Reimbursement payments had been limited by a statutory cap of $250 per pupil for each school year.  The act increases this cap to $275 per pupil.
II. Scholarship Programs
Educational Choice Scholarship Pilot Program
(R.C. 3310.01 to 3310.17, and 3317.03; Section 206.10.03)
The act establishes the Educational Choice Scholarship Pilot Program to provide scholarships for primary and secondary students attending school in or assigned to "academic emergency" buildings for the sole purpose of paying tuition at chartered nonpublic schools.[54]  This new pilot program does not apply to any student residing in a school district included in the Cleveland Scholarship Pilot Program.  The first scholarships under the Educational Choice Pilot Program are to be awarded by the Department of Education for the 2006-2007 school year.  In awarding scholarships each year, the Department first must award scholarships to eligible students who received them in the previous school year, then to students whose family incomes are at or below 200% of the federal poverty guidelines, and then on the basis of a lottery.[55]
Eligible students
(R.C. 3310.01(B), 3310.03, and 3310.05)
To be eligible under the Educational Choice Scholarship Pilot Program, a student must meet one of the following conditions:
(1) The student is enrolled in a school building operated by the student's resident district (other than Cleveland) that the Department of Education declared to be in a state of academic emergency for three consecutive school years.  The ratings used for this purpose are those issued in the most recent rating of school buildings published prior to the first day of July of the school year for which a scholarship is sought and in the two preceding school years.[56]
(2) The student is eligible to enroll in kindergarten in the school year for which a scholarship is sought and would be assigned to an academic emergency school building described in (1) above.
(3) The student is enrolled in a community school (public charter school) but otherwise would be assigned to an academic emergency school building described in (1) above.
A student who receives an Educational Choice scholarship remains eligible and may continue to receive scholarships in subsequent school years until the student completes grade 12, so long as the student's resident district stays the same, the student takes each state achievement or proficiency test prescribed for the student's grade level while enrolled in a chartered nonpublic school, and the student is not absent from that school for more than 20 days (not including absences due to illness or injury confirmed in writing by a physician).[57]  Therefore, students who received a scholarship in the prior year can remain eligible even after their school is no longer categorized as under academic emergency.  On the other hand, the Department must cease awarding first-time scholarships with respect to a school building that ceases to be in a state of academic emergency.
Scholarship amount
(R.C. 3310.08(A) and 3310.09)
The amount of each annual Educational Choice scholarship is the lesser of (1) the tuition charged by the chartered nonpublic school in which the student is enrolled or (2) a "maximum" amount specified in the act.  That maximum amount in fiscal year 2007 is:
(a) $4,250 for grades K through 8; and
(b) $5,000 for grades 9 through 12.
In future fiscal years, the maximum amount is to be inflated by the rate of increase in the base-cost formula amount from the previous fiscal year.
Financing of scholarships
(R.C. 3310.08(C) and (D) and 3317.03)
The act requires the resident school district of each student awarded an Educational Choice scholarship to report the number of its resident students who have received a scholarship.  That number will be added to the district's base-cost calculation.  This will credit the district with state base-cost funding.  The act then requires the Department of Education to deduct $5,200 from the district's state funding account for each of the district's students awarded a scholarship.  The act states that this deduction is to fund scholarships under both the Educational Choice and the Cleveland pilot programs.
The Department of Education must disclose on the SF-3 form of a school district from which a deduction is made for Educational Choice scholarships both the aggregate and per pupil differences between (1) the district's state base-cost funding and (2) what its state base-cost funding would have been if the scholarship students had not been included in the district's formula ADM.
Number of scholarships
(R.C. 3310.17; Section 206.10.03)
Under the act, the General Assembly is to prescribe the maximum number of scholarships that may be awarded under the program in each year.  The act specifies that, in fiscal year 2007, the maximum number of scholarships under the program is 14,000.
Scholarship payments
(R.C. 3310.08(B))
The act requires the Department of Education to pay to the parent of each eligible student awarded a scholarship, or to the student if at least 18 years old, periodic partial payments of the scholarship.  The Department must proportionately reduce or terminate the payments for any student who withdraws from school prior to the end of the school year.
Excess tuition charges
(R.C. 3310.13)
The act prohibits a chartered nonpublic school from charging any Educational Choice scholarship student whose family income is at or below 200% of the federal poverty guidelines a tuition fee that is greater than the scholarship amount paid for that student.
On the other hand, it explicitly permits a school to charge any other student the difference between the scholarship amount and the school's regular tuition.  Each school must permit a scholarship student's family, at the family's option, to provide volunteer services in lieu of cash to pay all or part of the school's tuition not covered by the scholarship.
Transportation of scholarship students
(R.C. 3310.04)
The act specifies that Educational Choice scholarship students are entitled to transportation to and from the chartered nonpublic schools they attend in the manner prescribed under continuing law.  That law requires school districts to provide transportation to nonpublic school students in grades K to 8 who reside in the district and who live more than two miles from the school they attend.  Districts may, but are not required to, transport high school students to and from their nonpublic schools.  A district, however, is not required to transport students of any age to and from a nonpublic school if the direct travel time by school bus, from the district school the student would otherwise attend to the nonpublic school, is more than 30 minutes.  Districts are eligible for state subsidies for transporting nonpublic school students.[58]
Start-up; State Board of Education rulemaking authority
(R.C. 3310.16; Section 206.10.03)
The act requires the State Board of Education to adopt rules that prescribe procedures for the administration of the Educational Choice Scholarship Pilot Program.  The act also states that the State Board or the Department of Education may not require chartered nonpublic schools to comply with any education laws or rules or other requirements that are not specified under the act's provisions if they otherwise would not apply to chartered nonpublic schools.[59]
The State Board must adopt its rules so that they are in effect and the program is operational for the 2006-2007 school year.  In the meantime, the Superintendent of Public Instruction, by September 1, 2005, must begin preparations to implement the program.  The Superintendent must ensure that school districts, chartered nonpublic schools, students, and parents are notified of the program and how it may affect them.  This information must be supplied in sufficient time for affected parties to meet deadlines imposed by the Superintendent.
Purpose statement
(R.C. 3310.06)
The act states that it is the policy adopted by the General Assembly that the Educational Choice Scholarship Pilot Program is one of several options available for students enrolled in academic emergency school buildings.  It states that those students may choose to enroll in the schools of the student's resident district, in community schools, in the schools of another school district pursuant to an open enrollment policy, in chartered nonpublic schools with or without an Educational Choice scholarship, or in other schools as the law may provide.  Those other choices might include, for example, enrolling in another school district or in some other type of private school and paying tuition to that district or private school.
Comparison with the Cleveland program
(R.C. 3310.05)
As noted above, a scholarship under the Educational Choice Scholarship Pilot Program is not available for any student whose resident district is the Cleveland Municipal School District, in which the existing Cleveland voucher pilot program is operating.  The act states that the two pilot programs are separate and distinct, each with its own prescribed scholarship amount in recognition of its unique eligibility criteria.  It states that the Cleveland program is a district-wide program that may award scholarships to students who do not attend district schools that face academic challenges, whereas the proposed Educational Choice Scholarship Pilot Program is limited to students of individual district school buildings that do face academic challenges.
Changes to the Cleveland scholarship pilot program
Eligibility for scholarships
(R.C. 3313.975, 3313.976, 3313.977, and 3313.978)
The Pilot Project Scholarship Program (the Cleveland voucher program) provides scholarships to attend alternative schools, including private schools, and tutorial assistance grants to certain students who reside in any school district that is or has been under a federal court order requiring supervision and operational management of the district by the Superintendent of Public Instruction.  Currently, only the Cleveland Municipal School District meets this criteria.
Prior law limited eligibility for participation in the scholarship program to students in kindergarten through tenth grade.  After tenth grade, students either would have to return to the public school to which they are assigned by the district superintendent, enroll in a community school, or pay full tuition at a private school.
The act expands eligibility for scholarships to eleventh graders beginning in the 2005-2006 school year and to twelfth graders in the 2006-2007 school year.  Students must have been awarded a scholarship previously to receive one in the eleventh or twelfth grade.[60]  The act also codifies a long-standing practice to allow new students to enter the scholarship program in any of grades K to 8.[61]
Scholarship amount
(R.C. 3313.978(C)(1))
Under prior law, the amount of the Cleveland scholarship was the lesser of the tuition charged by the student's alternative school or an amount set by the Superintendent of Public Instruction not to exceed $3,000 for grades K through 8 and $2,700 for grades 9 through 12.  The act retains those amounts for fiscal year 2006, but it increases the maximum amount of a scholarship beginning in fiscal year 2007 to $3,450 for all grades K through 12.
Tutorial assistance grant amount
(R.C. 3313.978(C)(3))
Similarly, prior law limited the maximum amount of a tutorial assistance grant to 20% of the average basic scholarship amount under the program.  The act retains this maximum grant amount for fiscal year 2006, but for fiscal year 2007 and thereafter, it prescribes that the maximum amount of a tutorial assistance grant is $400.
Pilot Project Special Education Scholarship Program
(Section 206.09.84)
The budget act for the 2003-2005 biennium established a temporary pilot program to pay scholarships to the parents of certain autistic children to be used for services at public or nonpublic special education programs that are not operated by or for the child's resident school district.[62]  The act reauthorizes that program and increases the maximum amount of the scholarship to $20,000 (from $15,000 under prior law).
Under the program, as reauthorized in the act, in fiscal years 2006 and 2007, the Department of Education is required to pay upon application a scholarship to the parent of a child identified as autistic who is entitled to receive special education and related services at the child's resident school district in any grade from preschool to 12.  The scholarship is to be used solely to pay part or all of the cost of sending the child to a public or nonpublic special education program instead of the one provided by the child's resident school district. The amount of the scholarship is the lesser of the amount charged by the special education program or $20,000.  The scholarship is to be used to pay for only those services specified in the child's "individualized education program."
The amount of the scholarship is to be deducted from the state aid account of the child's resident school district. The district, therefore, is authorized to count the child in the district's formula ADM and category six special education ADM.  The district, then, retains the balance of any amount of state funding credited to the district after the scholarship amount is deducted.
III. Community Schools
Background
Community schools (often called "charter schools") are public schools that operate independently from any school district under a contract with a sponsoring entity.  Community schools often serve a particular educational purpose or a limited number of grades.  Community schools are funded with state funds that are deducted from the state aid accounts of the school districts in which the enrolled students are entitled to attend school.  Community schools may not charge tuition.
A conversion community school, created by converting an existing school district school, may be located in and sponsored by any school district in the state.  On the other hand, a "start-up" community school may be located only in a "challenged school district."  A challenged school district is any of the following:  (1) a "Big-Eight" school district, (2) a school district in academic watch or academic emergency, or (3) a school district in the original community school pilot project area (Lucas County).[63]
The sponsor of a start-up community school, which generally must be approved by the Department of Education, may be any of the following:
(1) The school district in which the school is located;
(2) A school district located in the same county as the district in which the school is located has a major portion of its territory;
(3) A joint vocational school district serving the same county as the district in which the school is located has a major portion of its territory;
(4) An educational service center;
(5) The board of trustees of a state university (or the board's designee) under certain specified conditions; or
(6) A federally tax-exempt entity under certain specified conditions.[64]
The State Board of Education may take over sponsorship of community schools, but only in specified exigent circumstances.
Caps on community schools
(R.C. 3314.013(A)(3), (4), (5), and (8))
Under prior law, there was a statewide limit of 225 start-up community schools sponsored by entities other than the school districts in which they were located.  That cap was to expire July 1, 2005.
The act extends the cap for two years to July 1, 2007, and increases it for that period to 30 more than the number of such schools that were open for operation as of May 1, 2005.  As under prior law, the cap does not apply to community schools sponsored by the school districts in which they are located.  However, the act establishes a separate statewide cap on the number of district-sponsored schools until July 1, 2007, which applies both to start-up schools and to conversion schools that are Internet- or computer-based community schools ("e‑schools").  That cap is equal to 30 more than the number of such schools that were open for operation as of May 1, 2005.  The act specifies that the existence of a cap or moratorium (see "Moratorium on new e-schools" below) on community schools does not prohibit an existing school from offering additional grades.
Lottery to select additional schools allowed under caps
(Section 206.10.10)
Within 30 days after the act's effective date, the Department of Education must conduct a lottery to select the 30 additional community schools allowed to open under each of the statewide caps.  There must be two separate lotteries, one for schools sponsored by the school districts in which they would be located and one for schools sponsored by other entities.  In either case, for a school to participate in the lottery, its sponsor must submit an application on the school's behalf.  A community school is eligible for the lottery only if (1) the sponsor and the school's governing authority have entered into a contract, (2) the school is prepared to open for its initial year of operation in the 2005-2006 school year, and (3) selection of the school in the lottery would not cause the sponsor to exceed the limit on the number of schools it may sponsor (see "Limit on number of schools an entity may sponsor" below).
Opening schools in excess of the caps
(R.C. 3314.014)
The act permits community schools in excess of the statewide caps to open under certain conditions.  Specifically, once a statewide cap to which a community school would otherwise be subject has been reached, the school may still be established if it is run by an "operator" pursuant to a contract with the school's governing authority.[65]  As defined by the act, an operator is an organization that manages the daily operations of the school.  However, the act effectively limits the total number of schools that may open in excess of the caps because each operator may manage only one such school for each community school it manages on the date the caps are reached that has a performance rating of excellent, effective, or continuous improvement.  An operator, for example, that manages two schools in continuous improvement and one effective school on that date could manage three schools in excess of the caps.  The limit on the number of schools an operator may manage in excess of the caps is fixed on the date those caps are reached.  In other words, if a community school managed by an operator achieves a performance rating of continuous improvement or better after that date, the operator's limit does not thereby increase.  Conversion community schools that are not e-schools do not count toward an operator's limit because those schools are not subject to either statewide cap.
Moratorium on new e-schools
(R.C. 3314.013(A)(6) and (7))
The act prohibits any entity from sponsoring a new e-school between May 1, 2005, and the effective date of any standards enacted by the General Assembly governing the operation of e-schools.  If a sponsor entered into a contract with an e-school and the school had not yet opened as of May 1, 2005, the contract is void and a new contract may not be entered into until the moratorium is over.  The moratorium applies to start-up and conversion e-schools.
However, all qualified sponsors may renew any contracts with existing e‑schools when those contracts are eligible for renewal.  In addition, during the moratorium period, all qualified sponsors, except a tax-exempt entity, may assume the sponsorship of existing e-schools formerly sponsored by other entities.  The act retains a provision of former law prohibiting a tax-exempt entity from sponsoring any schools other than existing schools formerly sponsored by the State Board of Education until July 1, 2005.  After that date, the act allows a tax-exempt entity to sponsor an existing or new community school as under prior law, but prohibits the entity from sponsoring a new e-school for the balance of the moratorium period.
Prohibition on operating school from a residential facility
(Section 206.10.11)
Until July 1, 2007, a community school that opens for operation after May 1, 2005, is prohibited from operating from a residential "home."  For this purpose, "home" includes a home, institution, foster home, group home, or other residential facility that is maintained by the Department of Youth Services or is licensed or otherwise authorized by the state to receive and care for children.
Criteria for approval of sponsors
(R.C. 3314.015(B)(1))
Continuing law requires the Department of Education to adopt rules containing criteria for the approval of community school sponsors.[66]  These rules must require an entity seeking approval for sponsorship to provide evidence of its ability and willingness to provide proper oversight.  The act adds two new requirements for sponsors approved on or after June 30, 2005 (the act's effective date).  First, entities seeking approval for sponsorship must have a record of financial responsibility and successful implementation of educational programs.  Second, if the entity sponsors or operates schools in another state, at least one of those schools must be performing as well as or better than Ohio schools in academic watch, as determined by the Department.[67]
Limit on number of schools an entity may sponsor
(R.C. 3314.015(B)(1); Section 206.10.09)
While former law allowed an entity to sponsor any number of community schools, the act establishes limits on sponsorship.  These limits are based on the number of schools an entity sponsored that were open for operation as of May 1, 2005.  All new and existing sponsors must comply with the limits.  The limit of an entity that sponsored more than 50 schools open for operation as of May 1, 2005, is decreased by one whenever one of its schools permanently closes, until the sponsor has a total of 50 schools.  The act's limits on sponsors are shown in the table below.[68]


Limits on Schools an Entity May Sponsor
Number of schools sponsored by entity open as of May 1, 2005

Limit

Other conditions

50 or fewer

50 schools


51-75


Number of schools sponsored by entity open as of May 1, 2005

Limit decreases by one for each school sponsored by entity that permanently closes until the entity sponsors 50 schools



More than 75

(1) Until June 30, 2006, number of schools sponsored by entity open as of May 1, 2005

(2) After June 30, 2006, 75 schools

Limit decreases by one for each school sponsored by entity that permanently closes until the entity sponsors 50 schools


If a sponsor exceeds its limit, the Department of Education must assist schools in excess of the limit in finding new sponsors.  The schools that the sponsor must relinquish are those schools that most recently entered into a contract with the entity for sponsorship.  If a school is unable to secure a new sponsor, the Department must assume sponsorship of the school.  Under continuing law, the Department's term of sponsorship lasts until the school finds another sponsor, but no longer than two school years.[69]
Deadline for adoption of contract
(R.C. 3314.02(D))
The act requires the contract between the sponsor and governing authority of a new community school to be adopted by March 15 prior to the school year in which the school will open.[70]  This deadline only affects contracts adopted on or after September 29, 2005 (the provision's effective date).  Therefore, a school whose contract is adopted after March 15, 2005, but before September 29, 2005, still would be able to open in the 2005-2006 school year.
Nullification of contract
(R.C. 3314.03(F))
Under the act, the contract between a community school and its sponsor becomes void if the school (1) fails to open for operation within one year after adoption of the contract or (2) permanently closes prior to the contract's expiration.[71]  Furthermore, the school may not enter into a contract with another sponsor.  A school whose contract is nullified for one of these reasons does not count toward the statewide caps on community schools.
Enrollment of community school students
(R.C. 3314.03(A)(6)(b) and 3314.08(L)(2))
Under prior law, a student was considered enrolled in a community school for state funding purposes on the date the student commenced participation in the school's learning opportunities following receipt of the appropriate documentation by the student's parent.  The act specifies instead that a student is considered enrolled beginning on the later of that date or 30 days prior to the date on which the school enters the student into the Education Management Information System (EMIS).[72]  For example, if a student enrolls in a community school on October 15 but is not entered into EMIS until December 1, the school could not receive state funding for that student for the period of enrollment between October 15 and November 1.
The act retains law requiring a community school to automatically withdraw a student who misses 105 consecutive hours of learning opportunities without a legitimate excuse.  However, it eliminates the 30-day period previously granted to the school for making the withdrawal.  Therefore, under the act, a student must be withdrawn immediately after accruing the requisite number of missed hours.
Opening date for schools
(R.C. 3314.03(A)(25))
Under law retained by the act through June 30, 2006, a community school may open at any time during the school year.  Beginning in the 2006-2007 school year, however, the act generally requires community schools to open for operation by September 30 each year.  This restriction does not apply to schools whose mission is solely to serve dropouts, which may continue to open at any time during the school year.  Otherwise, if a school fails to open by September 30 in its initial year of operation, the school's contract with its sponsor is void.[73]  A school serving dropouts must open for its first year of operation within one year after the adoption of the contract to avoid nullifying the contract.
Changes regarding e-schools
Limit on daily hours logged by e-school students
(R.C. 3314.08(L)(3) and 3314.27)
Continuing law requires each community school to provide a minimum of 920 hours of learning opportunities to students per school year.[74]  The act specifies that, in the case of students enrolled in an e-school, a student's time spent participating in learning opportunities over 10 hours within a 24-hour period does not count toward the 920 instructional hours due to that student.  In other words, an e-school student who spends 12 hours a day engaged in the school's learning opportunities would only be credited with 10 hours of participation.  If an e-school requires its students to participate in learning opportunities on the basis of days rather than hours, a minimum of five hours of student participation constitutes the equivalent of one day under the act.
E-school teachers
(R.C. 3314.21)
The act establishes two new requirements regarding the employment of teachers by e-schools.  First, each e‑school must retain an "affiliation" with at least one full-time "teacher of record" licensed by the State Board of Education.  The act defines "teacher of record" as a teacher who is responsible for the overall academic development and achievement of a student and not merely the student's instruction in a single subject.  Second, each e-school student must be assigned to at least one teacher of record, but no teacher of record may be primarily responsible for more than 125 students.  The act retains prior law expressing the General Assembly's intent that teachers employed by e-schools conduct face-to-face visits with their students periodically throughout the school year.
Administration of state assessments to e-school students
(R.C. 3313.6410, 3314.25, and 3314.26)
As public schools, all community schools must administer the state-developed achievement tests and diagnostic assessments in the same manner as school districts.  The act requires e-schools to provide each of their students a location within 50 miles of the student's residence at which to take the achievement tests and diagnostic assessments.
Whenever an e-school student fails to participate in the spring administration of a grade-level achievement test (or any of the applicable proficiency tests, which were given for the last time in the 2004-2005 school year) for two consecutive school years, the act requires the school to withdraw that student from enrollment.[75]  Upon withdrawal, the school must report the student's data verification code to the Department of Education (see "Use of student data verification codes" below).  School district-operated schools in which students work primarily on assignments in a nonclassroom-based setting using an Internet- or other computer-based instructional method are also subject to this requirement under the act.
The Department must maintain a list of the data verification codes of all students who have been withdrawn from an e-school, or from a district-operated school that uses a computer-based instructional method, for failure to take achievement tests.  Neither an e-school nor a district-operated school that primarily uses a computer-based instructional method may receive state funding for any student whose data verification code appears on the list.  A student on the list may still enroll in an e-school or similar district-operated school, but the parent must pay tuition for the student in an amount equal to the state funds the Department determines the school would otherwise receive for that student.  The school may withdraw the student for failure to pay tuition.  Therefore, to receive a free education under the act, the student must enroll in a traditional school that relies on classroom-based instruction until the student completes high school.
Plan for special education services
(R.C. 3314.28)
Under the act, each e‑school must submit to its sponsor a plan for providing special education and related services to disabled students enrolled in the school.  Schools established after June 30, 2005 (the act's effective date) must submit the plan prior to the school's receipt of its first payment of state funds and annually thereafter by September 1.  Existing schools must submit their plan by September 1 each year beginning in 2005.
Within 30 days after submission of the plan, the school's sponsor must certify to the Department of Education whether the plan is satisfactory and, if not, that the sponsor will promptly assist the school in developing an acceptable plan.  The sponsor also must provide assurance to the Department that it will monitor implementation of the plan and take corrective action if necessary.  The Department must develop guidelines for the content and format of the plans.
Provision of computers to certain community school students
(R.C. 3314.08(N) and 3314.22)
Law generally unchanged by the act entitles each student enrolled in an e‑school to a computer supplied by the school.  If more than one child living in a household is enrolled in the school, however, the parent of those children may request less than one computer per child, as long as at least one computer is supplied to the household.  The parent may amend this decision at any time during the school year.  In that case, the school must provide any additional computers requested by the parent, up to one computer per child enrolled in the school, within 30 days.  Each computer supplied by the school must be equipped with a filtering device that blocks Internet access to materials that are obscene or harmful to juveniles.[76]  An e-school student is not considered enrolled for purposes of state funding until these requirements have been met.
The act extends this entitlement to certain students enrolled in community schools that are not e-schools.  Under the act, if a traditional ("brick and mortar") community school provides its students with nonclassroom-based learning opportunities using an Internet- or other computer-based instructional method and requires those students to access the learning opportunities from their homes, the school must supply each participating student with a computer on the same terms applicable to e-schools.  This requirement is waived if (1) the nonclassroom-based learning opportunities that a student must participate in from home are supplemental in nature or do not constitute a "significant" portion of the total learning opportunities provided to the student by the school and (2) the student already has a computer to use at home.  As with an e-school, a traditional community school student who is eligible for a computer is not considered enrolled until the computer has been supplied and is fully operational.
The act also prohibits a community school from providing a stipend or other substitute in lieu of supplying an actual computer to a student.[77]  This prohibition applies to both e-schools and other community schools that must provide a student with a computer under the act's extension of the entitlement.[78]
Sanctions for poorly performing community schools
(R.C. 3314.03(A)(4), 3314.35, and 3314.36)
The act requires additional assessments of students enrolled in certain community schools to measure their academic progress during the school year and establishes sanctions in some cases for schools in which student progress is not sufficient.  The required assessments are in addition to the state achievement tests and diagnostic assessments, which community schools must administer under continuing law.  Similarly, the sanctions created by the act must be imposed along with other sanctions prescribed by the federal No Child Left Behind Act of 2001 or accountability provisions of state law.[79]
Additional reading and math assessments
(R.C. 3314.35(A) to (D))
Under the act, beginning in the 2006-2007 school year, a community school must administer reading and math assessments to students in grades 1 to 12 if the school either:
(1) Has a performance rating of continuous improvement, academic watch, or academic emergency;
(2) Has not been in operation for at least two full school years; or
(3) Does not have a performance rating based on achievement test data because it does not offer a grade level in which an achievement test is given or the Department of Education has determined that the number of students enrolled in grades that take an achievement test is too small to yield statistically reliable data about those students' test performance.
A school must give the same assessment in both the fall and spring of the school year to measure student academic growth over that period.  Each school must select the reading and math assessments it gives from a list of nationally normed assessments approved by the Department.[80]  The costs of administering and scoring the assessments are the school's responsibility.  Each school must report student scores to the Department.
Sanctions for insufficient student progress
(R.C. 3314.36(A), (B), (C), and (E))
To determine which community schools face sanctions, the State Board of Education, by July 1, 2006, must adopt rules establishing "reasonable" standards for expected gains in student achievement from the fall to spring assessment periods and for expected gains in the graduation rate.  Community schools that have been open at least two school years and are in academic watch or academic emergency or do not have a performance rating based on achievement test data face sanctions if (1) the school offers a high school diploma but is not showing the expected gains in its graduation rate established by the State Board or (2) the percentage of the school's population showing the State Board's expected gains in student achievement on the reading or math assessments is less than 55%.  The act's sanctions are shown in the table.  For the first two years, they apply only to e‑schools.  The closure of a school after the third year of failure to make expected gains applies to both traditional ("brick and mortar") community schools and e‑schools.



Consecutive years of failure to make expected gains in student achievement
1
2
3













Sanctions for community schools



(1) E-school prohibited from enrolling more students than it enrolled at end of previous school year.(1) E-school prohibited from enrolling more students than it enrolled at end of previous school year.

(2) E-school must withdraw at the end of the school year any student for whom one of the following applies, unless the student's parent agrees to pay tuition in an amount equal to the state funds the school otherwise would receive for the student:

(a) For two consecutive school years, the student has taken the reading and math assessments but failed to show the expected achievement gains in both subjects;

(b) For two consecutive school years, the student failed to take one or more of the reading and math assessments; or

(c) For one of two consecutive school years, the student took the reading and math assessments but failed to show the expected achievement gains in both subjects and, in the other school year, failed to take one or more of the assessments.
(1) E-school prohibited from enrolling more students than it enrolled at end of previous school year.

(2) E-school ineligible for state funding for any student who was required to be withdrawn at the end of the previous school year or for whom tuition is owed.

(3) School (whether a "brick and mortar" community school or an e-school) must permanently close at end of school year.

(4) Sponsor's limit on number of schools it may sponsor is reduced by one, if the sponsor has more than 50 schools (see "Limit on number of schools an entity may sponsor" above).


In calculating whether a school makes the expected gains, the Department of Education must include the scores of all students who participated in both the fall and spring assessments.  If a school's participation rate for any grade level is less than 90%, the Department must assume a score of zero for each student that must be added to the participation rate to bring that rate up to 90%.  Therefore, schools are more likely to fail to make the expected gains, and be subject to sanctions, if they do not ensure that their students take the assessments.
Optional use of progress measure by other community schools
(R.C. 3314.03(A)(4), 3314.35(E), and 3314.36(D))
If a community school has a performance rating of continuous improvement or higher based on achievement test data, the school is not subject to the act's sanctions.  Nevertheless, the school's sponsor may choose to have the school administer the additional reading and math assessments and evaluate the school's performance using the goals for student achievement described above.  The length of time the school will be evaluated in this manner must be specified in the school's contract with the sponsor.  But if a sponsor opts to have them administered, it must be for a minimum of three years.  Unless the contract specifies otherwise, a sponsor need not impose any of the act's sanctions on a school for failure to meet the goals.  Presumably, though, the sponsor may consider the school's performance when deciding whether other actions, such as suspension of the school's operations or contract termination, are warranted.
Procedures for closing a community school
(R.C. 3314.015(E))
The act requires the Department of Education to adopt procedures for permanently closing a community school.  These procedures must cover the reporting of data to the Department, handling of student records, distribution of assets in the manner prescribed by law, and other pertinent matters.[81]
District report card data for conversion schools serving at-risk students
(R.C. 3302.03(C))
Under law generally retained by the act, the academic performance data of students enrolled in a conversion community school is combined with the data for students enrolled in the sponsoring school district in determining the district's report card rating.  The act creates an exception to this requirement.  Under the act, the data for a conversion school is not combined with the sponsoring district's data if the school primarily enrolls students ages 16 to 22 who are high school dropouts or are at risk of dropping out due to poor attendance, disciplinary problems, or suspensions.  However, as in prior law, the performance data of students in such a conversion school must be included on the sponsoring district's report card, even though that data would not affect the district's performance rating.
Annual report of expenditures for special education services
(R.C. 3314.12)
The act requires the sponsor of a community school to submit an annual report to the Department of Education describing the special education and related services provided by the school to its students during the previous fiscal year and the school's expenditures for those services.  The report is due by November 1 and must be submitted in accordance with guidelines adopted by the Department.
Community school to serve autistic students and non-disabled students
(R.C. 3314.03(A)(5) and (19), 3314.06, and 3314.061)
The act permits the establishment of a community school to simultaneously provide (1) special education and related services to autistic students and (2) regular educational programs for non-disabled students.  The contract between the sponsor and governing authority of such a school must specify the school's admission standards, including the target ratio of autistic students to non-disabled students and the total number of each type of student the school may enroll.  Despite these targets, the school may not deny admission to a disabled student on the basis of the student's disability, even if the disability is not autism, unless the school is fully enrolled.  As required by continuing law for all community schools, if the applicants for enrollment exceed the school's capacity limits, the school must admit students by lottery after giving preference to students enrolled the previous year and students residing in the school district where the school is located.  However, since the school sets different capacity limits for autistic and non-disabled students, it must hold separate lotteries for each group.
State payments to community schools
(R.C. 3314.08(C), (D), and (F), 3314.084, 3314.085, and 3314.13)
Under law retained in part by the act, community schools receive various state payments, including base-cost funding, special education and vocational education weights, handicapped preschool and gifted units, parity aid, and Disadvantaged Pupil Impact Aid (DPIA), which the act renames "poverty-based assistance."  In most cases, these payments are deducted from the state aid accounts of the school districts in which the community school's students are entitled to attend school and paid to the community school by the Department of Education.
Traditional ("brick and mortar") community schools remain eligible for these payments under the act.  However, the act prohibits e-schools from receiving (1) vocational education weighted funding, (2) parity aid, and (3) poverty-based assistance, including funding for all-day kindergarten.  E-schools retain eligibility under the act for state base-cost and special education payments, as well as handicapped preschool and gifted units.
E-school expenditures for instruction
(R.C. 3314.085)
Beginning in fiscal year 2007 (2006-2007 school year), each e-school must spend at least the per pupil amount designated for base classroom teachers (see "New "building blocks" methodology" above) on instructional purposes, including (1) teachers, (2) curriculum, (3) academic materials other than computers and filtering software, and (4) other purposes designated by the Superintendent of Public Instruction.  E‑schools annually must report their expenditures for instruction to the Department of Education.  If the Department determines that an e-school has failed to comply with the expenditure or reporting requirements, the e-school must pay a fine equal to 5% of the total state payments to the school in the fiscal year of noncompliance or the amount the school underspent on instruction, whichever is greater.  The Department may cancel the fine, however, if the e-school develops and implements a compliance plan approved by the Department.  The Department must offer an e-school an opportunity for a hearing prior to assessing any fine and may withhold future state payments to the school to collect the fine.
Elimination of special education funding guarantee
(R.C. 3314.08(D)(2))
Under prior law, each community school was guaranteed at least as much in aggregate state base-cost and special education weighted funding for students receiving special education and related services as the school received in fiscal year 1999.  The act retains this funding guarantee for fiscal year 2006, but eliminates it thereafter.  Therefore, beginning in fiscal year 2007, each community school will receive the amount of state base-cost and special education weighted funding calculated under the funding formulas applicable to that fiscal year.
Payments for a child enrolled in a community school but also living in a residential facility
(R.C. 3314.084)
The act establishes procedures for paying state funds to a community school for a student enrolled in the school and living in a residential "home."[82]  Those procedures specify that the student's school district of residence, which is generally the district where the student's parent resides, must count the student in its average daily membership (ADM) rather than the district where the student is living in the residential home.  Therefore, the Department must deduct the amount of state funds owed to the community school for that student from the state aid account of the student's district of residence.
Poverty-based assistance for limited-English proficient students
(R.C. 3314.08(C)(6) and (D)(7))
As under prior law for the DPIA subsidy, the act directs that per pupil amounts of the new components of poverty-based assistance be transferred to community schools for students whose resident school districts receive this subsidy.  The Governor vetoed a portion of the language concerning transfer of poverty-based assistance for limited-English proficient students.  The veto left intact the principal instruction that a per pupil amount of the subsidy be transferred for each limited-English proficient student enrolled in a community school (if the student's resident district actually receives the subsidy), but deleted the instruction that the per pupil amount is the amount actually calculated and paid to the school district for each limited-English proficient student (from $264 to $528 in fiscal year 2006, depending on the district's poverty index).  That leaves the act silent on how the Department must calculate the per pupil amount for transfer to community schools.
Temporary subsidy for community schools that enroll a high number of severe behavior handicapped students
(Section 206.09.82)
Although community schools receive funds in addition to the formula amount for each special education student they enroll, an additional subsidy is available under the act for certain community schools to assist them in meeting special education costs.  The act establishes a subsidy for fiscal years 2006 and 2007 for any community school in which the number of students receiving special education and related services for "severe behavior handicap" conditions  (SBH students) in each of those fiscal years is at least 50% of the total number of students enrolled in the school.  This subsidy is not deducted from any amounts calculated for any school district.  The amount of the subsidy for each fiscal year is the difference between the aggregate amount calculated for all the SBH students enrolled in the community school for that fiscal year and the aggregate amount calculated for such students for fiscal year 2001.  If the difference is a negative number, the amount of the subsidy is zero.
For fiscal year 2001, the special education weight attributed to a SBH student was 3.01, but for fiscal years 2006 and 2007, that weight is 1.5926.[83]  Even though the formula amounts for fiscal years 2006 and 2007 are higher than for fiscal year 2001, the reduced SBH weights could result in lower payments to community schools for each SBH student than in fiscal year 2001, when the special education weights were higher.[84]  The act, then, would essentially hold these community schools harmless for their fiscal year 2001 per pupil aid for SBH students.  A similar provision was enacted for the 2002-2003 and 2004-2005 bienniums.[85]  Under the act, each subsidy must be paid from the Department of Education's appropriation for base-cost funding.
Repeal of outdated law regarding pilot project community schools
(R.C. 3314.02(G)(2) and repealed R.C. 3314.15)
In 1999, when the community school pilot project was formally eliminated, community schools established under the pilot project were placed under the Community School Law that applied to community schools in the rest of the state.  The pilot project schools, however, were allowed to continue operating under their original contracts with their sponsors until those contracts expired.  When those contracts were renewed, they had to conform to the Community School Law.  The act repeals the statute dealing with this transition period since all community schools have been required to comply with the statewide Community School Law since July 1, 2003.
The act also retains prior law that addressed the continued existence of community schools established under the pilot project but located in a county contiguous to the pilot project area (Lucas County).[86]  As under former law, those schools may continue to operate even if they are not located in a challenged school district, provided they comply with the Community School Law.
IV. Other Education Programs
Later administration of spring achievement tests
(R.C. 3301.0710; Section 612.09)
Beginning in the 2006-2007 school year, the act requires the spring administration of the elementary-level achievement tests generally to begin no earlier than Monday of the week of May 1.  It further requires the State Board to designate consecutive days for the administration of those tests within each grade.  The act does not change the March administration dates for the Ohio Graduation Tests (OGT).
However, the act creates exceptions to the general testing periods for special education students and limited English proficient students.  These exceptions apply to all achievement tests, including the OGT, starting in the 2006-2007 school year.  For special education students who take an alternate assessment, instead of the regular achievement test, those assessments must be completed and school districts must submit them to the test scoring company hired by the Department of Education by April 1.[87]  Limited English proficient students may be tested one week earlier than the general testing period at the State Board of Education's discretion.
Deadlines for submission of tests and return of scores to districts
(R.C. 3301.0711(G); Section 612.36.03)
Prior law granted the Department of Education a maximum of 60 days after the administration of an achievement test to score that test and inform school districts of students' scores.  The act maintains this 60-day deadline for the fall and summer administrations of the third grade reading achievement test and for administrations of the OGT.  For all other achievement tests, however, the act shortens the deadline for returning test scores beginning in the 2006-2007 school year.  Starting that year, students' scores from the spring administrations of the tests must be returned to districts by June 15.  Due to the earliest possible administration date of April 26 for most students, this deadline would allow a maximum of 50 days to score the elementary-level tests and report the results to school districts.  The act also specifies that the test results may be reported to districts by either the Department or the test scoring company with which it contracts.
To meet the shortened deadline for returning student scores after the spring administrations of the elementary-level tests, the act requires districts to submit those tests to the test scoring company under contract with the Department no later than the Friday after the tests are given.  Tests given during the make-up period, which is the nine days following the scheduled test date, must be submitted by the Friday after the students take the make-up test.
Use of student data verification codes
(R.C. 3301.0711(A) and (I), 3301.0714(D), and 3301.12; Section 612.36.03)
Under continuing law, each school district or community school is required to assign a unique data verification code to every student for purposes of reporting student-level data to the Education Management Information System (EMIS).  Except as necessary to assign the data verification code, personally identifiable student information may not be reported to any person who is not employed by a school district or data acquisition site and authorized to have access to that information.[88]
The act makes several changes regarding the use of data verification codes.  First, it requires each achievement test to include the data verification code of the student to whom it is administered.  Second, it allows employees of companies hired by the Department of Education to grade the achievement tests to have access to students' personal information.  This access presumably would enable a test scoring company to match a test booklet or answers with a particular student by using the data verification code.  Third, the act prohibits test scoring companies from releasing students' test results except for the purpose of reporting the scores to districts.  The State Board of Education may require use of the data verification codes to protect the confidentiality of student test scores.
Finally, the act permits studies and research projects conducted by the Department or a contracting entity to include analysis of EMIS data.  The studies or projects, however, must maintain the confidentiality of student data by using the students' data verification codes.  The act explicitly prohibits the Superintendent of Public Instruction, the Department, the State Board, or an entity conducting a study or project on their behalf from having access to a student's name, address, or social security number while analyzing student data.  As noted above, this prohibition does not apply to a test scoring company.
Public release of achievement tests
(R.C. 3301.0711(N); Section 612.36.03)
Under continuing law, achievement tests become public records on July 1 (or July 16 for the third grade reading test) following their administration.  However, test questions that are not used to compute a student's score are not public records and must be redacted from the tests prior to their release.[89]
The act places additional restrictions on the public release of achievement tests.  As the elementary-level tests are phased in through 2007, only the initial administration of each test is subject to public release in its entirety (except for questions that do not count toward a student's score).  On subsequent administrations of those tests, a minimum of 40% of the questions used for scoring the test must become a public record.  Questions that the Department of Education determines will be needed for reuse on future tests are not public records and must be redacted.  The spring administration of the OGT is a public record, but the fall and summer administrations of the OGT are not.
Elimination of certain diagnostic assessments
(R.C. 3301.079 and 3301.0715)
Prior law required the State Board of Education, by July 1, 2008, to adopt diagnostic assessments for grades K through 2 in reading, writing, and math, and for grades 3 through 8 in those subjects plus science and social studies, except that a diagnostic assessment was not required for any grade level and subject in which an achievement test is given.  The act eliminates the requirement that the State Board adopt diagnostic assessments for grades 3 through 8, except in third grade writing.  According to the Department of Education, the third grade writing assessment and the K through 2 assessments have been developed and provided to districts and community schools.  The remaining diagnostic assessments, which the act eliminates, had yet to be developed.  The effect, therefore, is to cancel development of the following diagnostic assessments:
--Science and social studies for grade 3;
--Science and social studies for grade 4;
--Writing for grade 5;
--Writing, science, and social studies for grade 6;
--Science and social studies for grade 7; and
--Writing for grade 8.
The changes do not affect which students must take the remaining assessments or the requirement to provide intervention services to struggling students.
Early childhood education programs
Elimination of Title IV-A Head Start and Head Start Plus programs
(repealed R.C. 3301.31, 3301.33, 3301.34, 3301.35, 3301.36, 3301.37, and 3301.38; R.C. 121.37, 3301.311, 3301.32, 4511.75, 5104.01, 5104.02, and 5104.32)
Head Start programs provide instruction and health and social services to preschool children from low-income families.  Local agencies, including school districts, may receive direct grants from the federal government to operate Head Start programs.  In addition, prior to the act, the state Department of Education operated two Head Start programs, known as "Title IV-A Head Start" and "Title IV-A Head Start Plus," in accordance with an interagency agreement with the Department of Job and Family Services.  These two programs were funded with federal TANF moneys allocated by the state.[90]  Title IV-A Head Start provided traditional Head Start services during the school year.  Title IV-A Head Start Plus offered year-round Head Start services along with child care.
The act eliminates the Title IV-A Head Start and Title IV-A Head Start Plus programs.  The elimination of the state-funded Head Start programs generally does not affect traditional Head Start programs funded by direct federal aid.  But the act requires each agency operating a federally funded Head Start program to meet the state criteria for, and be licensed as, a child day-care center.
Qualifications of staff for preschool and early learning programs
(R.C. 3301.311)
Under prior law no Head Start program could receive any state funds unless half of the staff members employed by that program as teachers were working toward an associate degree of a type approved by the Department of Education, and beginning in fiscal year 2008, no Head Start program could receive any state funds unless every staff member employed by that program as a teacher had attained such a degree.
Under the act, head start programs no longer are required to meet these requirements, but preschool programs, early childhood education programs, and early learning programs are.  Under the act, after July 1, 2005, no preschool program, early childhood education program, or early learning program may receive any state funds unless half of the staff members employed by that program as teachers are working toward an associate degree of a type approved by the Department of Education.  Beginning in fiscal year 2008, no such program may receive any state funds unless every staff member employed by that program as a teacher has attained such a degree.  In addition, after July 1, 2010, no such program may receive any state funds unless half of the staff members employed by the program as teachers have attained a bachelor's degree of a type approved by the Department.
TANF-funded Early Learning Initiative
(Sections 206.09.54 and 206.67.12)
The act establishes the Early Learning Initiative, paid for with federal TANF funds, to provide early learning programs and child care to certain TANF-eligible children.[91]  The act specifies that early learning programs may provide early learning services on a full-day basis, a part-day basis, or both a full-day and part-day basis.  As defined by the act, early learning programs provide early learning services that are allowable under Title IV-A of the Social Security Act but are not considered "assistance" under federal regulations.[92]  The Initiative is administered by the Department of Education and the Department of Job and Family Services in accordance with an interagency agreement and rules adopted by the Department of Job and Family Services in consultation with the Department of Education.[93]  The joint rules for the Early Learning Initiative must be adopted in accordance with the Administrative Procedure Act (R.C. Chapter 119.).
Department of Education duties.  The act directs the Department of Education to define the early learning services that will be provided to TANF-eligible children through the Early Learning Initiative.  In addition, the Department of Education must establish early learning program guidelines for school readiness to evaluate early learning programs.
When the Department of Education approves an early learning agency, the Department must determine the number of TANF-eligible children the agency will serve and report that number to the Office of Budget and Management and the Department of Job and Family Services.
Department of Job and Family Services duties.  The Department of Job and Family Services is responsible for reimbursing early learning agencies for costs associated with their early learning programs.  In reimbursing early learning agencies, the Department must ensure that all funds paid to an agency are solely for Title IV-A services provided to TANF-eligible children.  In calculating reimbursements, the Department must reimburse an early learning agency for up to 25 days per year in which an eligible child is absent from the early learning program on a day the child is scheduled to attend the program.
The act directs the Department of Job and Family Services, in consultation with the Department of Education, to do all of the following:
(1) Adopt rules[94] regarding the establishment of co-payments for families of eligible children whose family income is more than 165% of the federal poverty line but equal to or less than 195% of the federal poverty line;
(2) Adopt rules providing an exemption from co-payment requirements for families whose family income is equal to or less than 165% of the federal poverty line;
(3) Adopt rules establishing reimbursement rates for early learning agencies based on the attendance of eligible children.  The Governor vetoed a provision that would have codified reimbursement rates as follows:  (a) if an eligible child attends 25 or more hours in a given week, the weekly reimbursement must be not less than $200.73, (b) if an eligible child attends 15 or more hours but less than 25 hours in a given week, the weekly reimbursement rate must not be less than $160.58, and (c) if an eligible child attends less than 15 hours in a given week, the hourly reimbursement rate must not be less than $8.03.
(4) Adopt rules defining "weekly attendance rate" for the purpose of reimbursing early learning agencies;
(5) Establish a caretaker employment eligibility requirement for participation in the Early Learning Initiative that specifies the minimum number of hours that the caretaker of the eligible child must be employed, specifies the time period over which the minimum number of hours is to be measured; and permits a limited number of "gap days";[95]
(6) Establish a deadline for the submission of applications to be an early learning agency that occurs after the effective date of those provisions if, on the effective date of the ELI provisions, no early learning agencies have been approved for a given county.
Finally, the Department of Job and Family Services must provide up to 10,000 slots of services for eligible children in fiscal year 2006 and up to 12,000 slots of services for eligible children in fiscal year 2007 through the Early Learning Initiative.  In each fiscal year, the Department must allocate at least 17 slots of services to each Ohio county.
Joint duties.  In consultation with each other, the Department of Job and Family Services and the Department of Education must develop an application form and criteria for the selection of early learning agencies to provide early learning programs.  Early learning agencies must be approved by the Department of Education to receive funding through the Initiative.  Each early learning agency, or each provider with which the agency subcontracts for the operation of an early learning program, must be licensed or certified by the Department of Education as a preschool or by the Department of Job and Family Services as a child day-care center.
County department of job and family services duties.  Each county department of job and family services must determine eligibility for Title IV-A services for children who wish to enroll in an early learning program.  The eligibility determination must be made within 15 days of the county department receiving a completed application.  The county departments of job and family services must also establish co-payment requirements in accordance with the rules adopted by the Department of Job and Family Services in consultation with the Department of Education.
Early learning program duties.  The act requires each early learning program to do all of the following:
(1) Meet certain teacher qualification requirements;
(2) Align curriculum to the Department of Education's early learning content standards;
(3) Meet any diagnostic assessment requirements that apply to the program;
(4) Require teachers, except teachers enrolled and working to obtain a degree, to attend a minimum of 20 hours per year of professional development as prescribed by the Department of Education regarding the implementation of content standards and assessments;
(5) Document and report child progress;
(6) Meet and report compliance with the early learning program guidelines for school success.
Contract, corrective action.  Prior to providing an early learning program, each early learning agency must enter into a contract with the Department of Education and the Department of Job and Family Services outlining the terms and conditions applicable to the provision of Title IV-A services.  This contract also must include:
(1) The respective duties of the early learning agency, the Department of Education, and the Department of Job and Family Services;
(2) Requirements regarding the use of and accountability for TANF funds;
(3) A requirement that the early learning agency's costs for developing and administering an early learning program cannot exceed 15% of the total approved program costs;
(4) Reporting requirements, including a requirement that the early learning provider inform the Department of Education when the provider learns that a kindergarten eligible child will not be enrolled in kindergarten;
(5) The method of reimbursing the early learning agency for program costs which must be consistent with the Department of Job and Family Services reimbursement rules;
(6) Audit requirements;
(7) Provisions for suspending, modifying, or terminating the contract;
(8) A requirement that a child enrolled in a Head Start Plus program during fiscal year 2005 be given higher priority if the child enrolls in an early learning program and is TANF-eligible.
If an early learning agency, or a provider with which the agency subcontracts, substantially fails to meet the Department of Education's early learning program guidelines for school readiness or otherwise exhibits below average performance, the early learning agency must implement a corrective action plan approved by the Department.  If the agency does not implement a corrective action plan, the Department of Education may direct the Department of Job and Family Services to withhold funding from the agency or either department may suspend or terminate the agency's contract.
Early Learning Initiative and publicly funded child care.  The act specifies that the provision of early learning services in a part-time early learning program does not prohibit or otherwise prevent an individual from obtaining certificates for payment that the individual may use to purchase services from any provider qualified to provide publicly funded child care.
If on or after December 31 of each fiscal year, the Director of Budget and Management, in consultation with the Director of Job and Family Services and the Superintendent of Public Instruction, determines that there is a balance of funds in the Early Learning Initiative in either fiscal year 2006 or fiscal year 2007, the Director of Budget and Management may approve the use of the funds by the Department of Job and Family Services to provide publicly funded child care.
State-funded early childhood education programs
(Section 206.09.06)
The act establishes a GRF-funded program administered by the Department of Education to support early childhood education programs serving preschool-age children from families earning up to 200% of the federal poverty guidelines.[96]  Program providers may include school districts and educational service centers (ESCs).  Families who earn more than the federal poverty guidelines must be charged for the programs their children attend in accordance with a sliding fee scale developed by the program provider.
To receive state funding, an early childhood education program must:
(1) Meet teacher qualification requirements applicable to early childhood education programs (see "Qualifications of staff for preschool and early learning programs" above);
(2) Align its curriculum to early learning content standards;
(3) Administer any diagnostic assessments adopted by the State Board of Education that are applicable to the program;[97]
(4) Require teachers, except for those working toward an associate or bachelor's degree in a related field, annually to attend at least 20 hours of professional development regarding the implementation of content standards and assessments;
(5) Document and report child progress; and
(6) Meet and report compliance with the early learning program guidelines for school readiness developed by the Department of Education.
In distributing funds to providers of early childhood education programs, the Department of Education must give priority in each fiscal year to previous recipients of state funds for such programs.  Funding must be distributed on a per-pupil basis, which the Department may adjust as necessary so that the per-pupil amount, when multiplied by the number of eligible children receiving services on December 1 (or the first business day after that date), equals the total amount appropriated for early childhood education programs.[98]  The Department may use up to 2% of the total appropriation for its administrative expenses.
The Department may examine a program provider's records to ensure accountability for fiscal and academic performance.  If the Department finds that (1) the program's financial practices are not in accordance with standard accounting principles, (2) the provider's administrative costs exceed 15% of the total approved program costs, or (3) the program substantially fails to meet the early learning program guidelines for school readiness or exhibits below-average performance compared to the guidelines, the provider must implement a corrective action plan approved by the Department.  This plan must be signed by the chief executive officer and the executive of the governing body of the provider.  The plan must include a schedule for monitoring by the Department.  Monitoring may involve monthly reports, inspections, a timeline for correction of deficiencies, or technical assistance provided by the Department or another source.  If an early childhood education program does not improve, the Department may withdraw all or part of the funding for the program.
If a program provider has its funding withdrawn or voluntarily waives its right to funding, the provider must transfer property, equipment, and supplies obtained with state funds to other early childhood education program providers designated by the Department.  It also must return any unused funds to the Department along with any reports requested by the Department.  State funds made available when a program provider is no longer funded may be used by the Department to fund new early childhood education program providers or to award expansion grants to existing providers.  In each case, interested providers must apply to the Department in accordance with the Department's competitive bidding process.  Unspent funds may be allocated to program providers for program expansion or improvement or for special projects to promote quality and innovation.
The act requires the Department of Education to compile an annual report regarding GRF-funded early childhood education programs and the Department's early learning program guidelines for school readiness.  Copies of the report must be given to the Governor, the Speaker of the House, and the President of the Senate.  The report also must be posted on the Department's website.
Montessori programs
(R.C. 3301.56)
The act establishes an exception to the law prohibiting a preschool program from grouping preschoolers with kindergartners.  It permits any accredited, licensed preschool program that uses the Montessori method endorsed by the American Montessori Society or the Association Montessori Internationale as its primary method of instruction to combine preschool children three to five years old with children enrolled in kindergarten.  When such age groups are combined, the maximum number of children per preschool staff member is 12 and the maximum group size is 24 children.
Reading improvement grants
Background
Sub. H.B. 1 of the 123rd General Assembly established the OhioReads initiative to provide classroom and community reading grants to improve students' reading skills.  These grants were awarded by the OhioReads Council.  An OhioReads Office within the Department of Education was created to be the fiscal agent for the grant program.
The enacting legislation also included a sunset provision abolishing the OhioReads Council effective July 1, 2004.  By January 1, 2004, the Director of Budget and Management was required to recommend a governmental entity to assume the functions of the Council if the General Assembly did not continue the Council's existence.  The General Assembly allowed the Council to expire on July 1, 2004.  However, it did not designate a successor.
Elimination of OhioReads Office and community grant program
(repealed R.C. 3301.85 and 3301.87; R.C. 109.57, 3301.86, and 3301.88)
The act repeals the statute authorizing the OhioReads community reading grants program.  This change acknowledges that the OhioReads Council ceased to exist on July 1, 2004, and grants are no longer being awarded under the program.  Similarly, the act eliminates the OhioReads Office within the Department of Education because its fiscal responsibilities are obsolete.
Reading improvement grants
(R.C. 109.57, 3301.86, and 3301.88)
The act changes the name of the "OhioReads Classroom Reading Grants Program" to the "Classroom Reading Improvement Grants Program" and requires the Department of Education to administer the renamed program.  Under the program, the Department must award reading intervention grants to public schools and classrooms operated by school districts, community schools, and educational service centers (ESCs).  Grants must be used (1) to engage volunteers to assist students struggling with reading, (2) to improve reading outcomes in low-performing schools, and (3) to close the achievement gap between students of different subgroups such as race and socioeconomic status.
Post-Secondary Enrollment Options Program
Background
The Post-Secondary Enrollment Options Program (PSEO) allows high school students to enroll in nonsectarian college courses on a full- or part-time basis and to receive high school and college credit.  Students in public high schools (school districts and community schools) and nonpublic high schools (chartered and nonchartered) are eligible to participate in the program.
PSEO consists of two "options," which the student elects at the time of enrolling in the course.  Under Option A, the student is responsible for payment of all tuition and other costs charged by the college.  Under Option B, the student receives both college credit and high school credit for successfully completing the course, and the state makes a payment to the institution of higher education on the student's behalf.  State payments to institutions of higher education for students enrolled in public high schools are deducted from the state aid accounts of the students' school districts or community schools.  State payments for students enrolled in nonpublic high schools are paid out of a separate state set-aside, since those schools do not receive operations funding from the state.
Ohio residency
(R.C. 3365.02; Section 206.09.99(B))
The act specifies that a student must be a resident of Ohio to participate in PSEO. Most students participating in the program would be Ohio residents if they are entitled to attend school in an Ohio school district. Nevertheless, it is possible that a student enrolled in a nonpublic school in the state may not be a resident but under prior law might have been eligible to participate in PSEO. The act eliminates this possibility beginning July 1, 2005.
Purpose statement
(R.C. 3365.02; Section 206.09.99(C))
The Governor vetoed a statement that the purpose of PSEO is "to provide enriched education opportunities to secondary grade students that are equivalent to or beyond the opportunities offered by the high school in which they are enrolled."
Reimbursement requirement
(R.C. 3365.02(G) and 3365.11; Section 206.09.99(D))
Beginning July 1, 2005, the act requires the student or the student's parent to reimburse state funds paid to a college for a course in which the student does not attain a passing final grade in the course.  The Superintendent of Public Instruction must initiate proceedings to seek the reimbursement and may request the Attorney General to bring a civil cause of action in a common pleas court.  Funds collected must be returned to the school district or community school from which they were deducted.  If the student was enrolled in a nonpublic school, the funds must be credited to the General Revenue Fund.
High school credit for Option A
(R.C. 3365.04, 3365.041, 3365.05, and 3365.08; Section 206.09.99(E))
Beginning in the 2005-2006 school year, the act permits a student who elects Option A (under which the student or the student's parent pays the cost of the college course) also to elect to receive high school, as well as college, credit for successfully completing the course.  If the student elects high school credit, the high school must award credit on the same basis that it awards credit for college courses paid by the state under Option B.  The student retains the option to receive only college credit for courses under Option A.
Reduction of the number of school district employees for financial reasons
Application to future collective bargaining agreements
(R.C. 3319.17(D) and 3319.172; Section 563.03)
The act revises and expands the statutory authority of school districts to make reductions in force among their teachers and nonteaching employees.  However, it also expressly states that the changes made by the act do not affect existing collective bargaining agreements.  Nevertheless, the act also specifies that its provisions prevail over conflicting stipulations in agreements entered into after September 29, 2005 (the provisions' effective date).
Teachers
(R.C. 3319.17)
Continuing law allows a board of education or educational service center (ESC) governing board to make a reasonable reduction in teaching employees when, for any of certain statutorily specified reasons, the board decides that it will be necessary to reduce the number of teachers it employs.  Among the reasons for which a board may reduce the number of teaching employees are:  (1) return to duty of regular teachers after leaves of absence, (2) suspension of schools, and (3) territorial changes affecting the district or center.
The act adds that the board also may make a reasonable reduction of teaching employees for financial reasons.  The act does not define "financial reasons."
Suspension of teachers' contracts
(R.C. 3319.17(C))
In making any reduction for any of the authorized reasons, continuing law requires a school district board or an ESC governing board to proceed to suspend contracts in accordance with the recommendation of the superintendent of schools who must, within each teaching field or service area affected, give preference to teachers on continuing contracts (i.e., tenure) and to teachers who have greater seniority.  The act specifies that preference be given first to teachers on continuing contracts and then to teachers who have greater seniority.  Also, the act allows a board, on a case-by-case basis, instead of suspending a contract in whole, to suspend a contract in part, so that an individual is required to work a percentage of the time the employee otherwise is required to work under the contract and receives a commensurate percentage of the full compensation the employee otherwise would receive.
Restoration of teachers
(R.C. 3319.17(C))
Under continuing law, teachers whose continuing contracts are suspended by any board pursuant to the reduction process have the right of restoration to continuing service status by that board in the order of seniority of service in the district or service center, if and when teaching positions become vacant or are created for which any of such teachers are or become qualified.  The act adds that no teacher whose continuing contract has been suspended can lose that right of restoration to continuing service status by reason of having declined recall to a position that is less than full-time or, if the teacher was not employed full-time just prior to suspension of the teacher's continuing contract, to a position requiring a lesser percentage of full-time employment than the position the teacher last held while employed in the district or service center.
Reduction of the number of nonteaching employees
(R.C. 3319.081 and 3319.172)
Continuing law establishes an employment contract system that controls nonteaching employees who are employed in school districts wherein the Ohio Civil Service Law does not apply (local and exempted village districts and ESCs and whose contracts of employment are not otherwise provided by law.[99]  Contracts provided through this system may be terminated by a majority vote of the board of education.  Except as provided below, continuing law specifies that these contracts may be terminated only for violation of written rules and regulations as set forth by the board of education or incompetency, inefficiency, dishonesty, drunkenness, immoral conduct, insubordination, discourteous treatment of the public, neglect of duty, or any other acts of misfeasance, malfeasance, or nonfeasance.  Continuing law also specifies that sexual battery against a student is grounds for termination.
The act adds a method by which, and expands the reasons for which, these contracts may be terminated.  It specifies that the board of education of each school district where the Civil Service Law does not apply, and each ESC governing board, may adopt a resolution ordering reasonable reductions in the number of nonteaching employees for any of the reasons described above for making reductions in teaching employees.  Therefore, in addition to the reasons for reduction discussed under "Teachers," above, a board may make a reduction for any of the following reasons:
(1) In the case of any city, exempted village, local, or joint vocational school district, decreased enrollment of pupils in the district;
(2) In the case of any governing board of an ESC providing any particular service directly to pupils pursuant to one or more interdistrict contracts, reduction in the total number of pupils the governing board is required to provide with the service under all interdistrict contracts as a result of the termination or nonrenewal of one or more of these interdistrict contracts;
(3) In the case of any ESC governing board providing any particular service that it does not provide directly to pupils pursuant to one or more interdistrict contracts, reduction in the total level of the service the governing board is required to provide under all interdistrict contracts as a result of the termination or nonrenewal of one or more of these interdistrict contracts.
Suspension of contracts for nonteaching employees
(R.C. 3319.172)
In making any reduction in nonteaching employees by adopting a resolution, the district board or ESC governing board must proceed to suspend contracts in accordance with the recommendation of the superintendent of the district or ESC who must, within each pay classification affected, give preference first to employees under continuing contracts and then to employees on the basis of seniority.  On a case-by-case basis, in lieu of suspending a contract in whole, a board may suspend a contract in part, so that an individual is required to work a percentage of the time the employee otherwise is required to work under the contract and receives a commensurate percentage of the full compensation the employee otherwise would receive under the contract.
Restoration of nonteaching employees
(R.C. 3319.172)
The act specifies that similar to teachers, any nonteaching employee whose continuing contract is suspended has the right of restoration to continuing service status by the district or ESC board in order of seniority of service, if and when a nonteaching position for which the employee is qualified becomes vacant or is created.  The act specifies that no nonteaching employee whose continuing contract has been suspended can lose that right of restoration to continuing service status by reason of having declined recall to a position requiring fewer regularly scheduled hours of work than required by the position the employee last held.
Termination of school district transportation staff
(R.C. 3319.081(C) and 3319.0810)
The act authorizes the termination of transportation staff positions for "reasons of economy and efficiency" by the boards of non-Civil Service school districts (local and exempted village school districts and some city school districts).  In that case, rather than employ its own staff to transport students, the board must contract with an independent agent to provide transportation services.  This provision does not appear to permit the lay off of any board-employed transportation personnel for economic reasons unless the district intends to contract for at least some nonpublic personnel.  However, another provision permits reductions in force among teachers and nonteaching employees for "financial reasons" (see "Reduction of the number of nonteaching employees," above).
Nevertheless, this provision prescribes conditions for laying off transportation employees and contracting with an independent agent for transportation services.  First, any collective bargaining agreement between the board and the labor organization representing the terminated employees must have expired, must expire within 60 days after the termination notice, or must contain provisions permitting the termination of positions while the agreement is in force.
Second, the board must permit any employee whose position is terminated to fill any vacancy within the district's organization for which the employee is qualified.  In so doing, the board must follow procedures for filling the vacancies established in the collective bargaining agreement with the labor organization representing the terminated employees, if it is still in force and contains such provisions.  If the agreement is not in force or does not contain provisions for reemployment of the terminated employees in new positions, the board must offer reemployment on the basis of seniority.
Third, the board must permit any terminated employee to fill the employee's former position in the event the board reinstates that position within one year after the position is terminated.  The act specifically states that the board need not reinstate an employee under this condition if the collective bargaining agreement with the labor organization representing the terminated employees, if one is in force at the time of the terminations, provides otherwise.
Fourth, the board must permit a terminated employee to appeal, pursuant to the Administrative Procedure Act (R.C. Chapter 119.), the board's decision to terminate the employee, not to reemploy the employee, or not to reinstate the employee.
Fifth, the contract between the board and an independent agent for the provision of transportation services must contain a stipulation requiring the agent to consider hiring the terminated district employees for similar positions.
Sixth, the contract between the board and the independent agent also must require the agent to recognize for purposes of collective bargaining between the former district employees and the agent any labor organization that represented those employees at the time of the terminations, as long as the following additional conditions are satisfied:
(1) A majority of the employees in the former school district bargaining unit agree to  representation by that labor organization;
(2) Federal law does not prohibit the representation; and
(3) The labor organization is not prohibited from representing nonpublic employees either under other provisions of law or its own governing instruments.
No employee may be compelled to be included in the bargaining unit represented by that labor organization if there is another one within the agent's organization that is applicable to the employee.
Recourse if school district board does not comply with conditions
(R.C. 3319.0810(B))
If the school district board fails to comply with any of the prescribed lay-off conditions, including enforcement of the required contractual obligations, the terminations of transportation staff positions are void.  In such instances, the board must reinstate the positions and fill them with the employees who filled those positions just prior to the terminations.  The employees must be compensated at their rate of compensation in those positions just prior to the terminations plus any increases paid to other nonteaching employees since the terminations.  In addition, the employees must receive back pay from the date of the terminations to the date of reinstatement, minus any pay the employees received while the board was in compliance with the act's provisions.  The act grants any employee aggrieved by the board's failure to comply with any of the act's provisions the specific right to sue the board for reinstatement of the employee's former position or for damages in lieu of reinstatement.[100]
Academic distress commissions
(R.C. 3302.10)
The Department of Education annually assigns one of five ratings to each school district (and schools within each district):  excellent, effective, needs continuous improvement, academic watch, or academic emergency.  The rating is based on the number of performance standards the district meets, whether the district has a certain performance index score established by the Department, and whether the district has made adequate yearly progress (AYP) toward meeting certain performance goals in reading and mathematics.   A school district is declared to be in a state of academic emergency if it does not make AYP, does not meet at least 31% of the state performance standards, and has a performance index score established by the Department that signifies a state of academic emergency.
Under the act, beginning July 1, 2007, the Superintendent of Public Instruction must establish an academic distress commission for each school district that is in a state of academic emergency and that has failed to make AYP for four or more consecutive years.  The commission remains in existence until the district's performance rating is upgraded to "continuous improvement" for two out of three school years, unless the Superintendent sooner determines that the district can perform adequately without the commission.
Each commission must consist of three voting members appointed by the Superintendent of Public Instruction and two voting members appointed by the president of the district board of education.  The act directs each commission to "assist the district for which it was established in improving the district's academic performance."  It explicitly grants each commission the following powers:
(1) Appoint, reassign, and terminate the contracts of district administrative personnel;[101]
(2) Contract with a private entity to perform school or district management functions; and
(3) Establish a budget for the district and approve school district expenditures, unless a financial planning and supervision commission has been established under the school district fiscal emergency law.
Each commission must seek input from the district board of education regarding ways to improve the district's academic performance, but the act states that any decision by a commission, with respect to any authority the act grants it, is final.
Academic distress commissions and collective bargaining
(R.C. 3302.10(D))
Generally, the state public employee collective bargaining law and collective bargaining agreements negotiated under that law prevail over most other state laws.  Specifically, a public employer under a collective bargaining agreement must bargain with respect to the wages, hours, and terms and conditions of employment of its employees.  Exceptions to this general provision (that is, matters which an employer is not required, and in some cases not permitted, to bargain) are listed in the collective bargaining statutes (R.C. 4117.08 and 4117.10).  The act creates an additional exception by providing that, if a district board of education is renewing a collective bargaining agreement while it has an academic distress commission in place, it may not enter into any agreement that would render any decision of the academic distress commission unenforceable.
The act also provides that if the board of a school district for which an academic distress commission has been established has bargained away some of its management rights and responsibilities (which it was not required but was permitted to bargain), those rights and responsibilities are restored to the board until both the commission is dissolved and the board agrees, in a new collective bargaining agreement, to relinquish them.  This applies to any collective bargaining agreement entered into after September 29, 2005 (the provision's effective date), regardless of whether a commission was established for the district at the time the board entered into that agreement.  The management rights and responsibilities to which this provision applies are:
(1) Determine matters of inherent managerial policy, which include, but are not limited to, areas of discretion or policy such as the functions and programs of the district, standards of services, its overall budget, utilization of technology, and organizational structure;
(2) Direct, supervise, evaluate, or hire employees;
(3) Maintain and improve the efficiency and effectiveness of district operations;
(4) Determine the overall methods, process, means, or personnel by which district operations are to be conducted;
(5) Suspend, discipline, demote, or discharge for just cause, or lay off, transfer, assign, schedule, promote, or retain employees;
(6) Determine the adequacy of the work force;
(7) Determine the overall mission of the employer as a unit of government;
(8) Effectively manage the work force;
(9) Take actions to carry out the mission of the district as a governmental unit.[102]
Legislative approval of new school districts
(R.C. 3311.11)
The act provides that if the State Board of Education adopts a resolution proposing a new city or local school district to begin operations after the 2004-2005 school year, the school district may not be created unless both houses of the General Assembly approve its creation by concurrent resolution.
School district internal auditors
(R.C. 3319.06)
The act authorizes, but does not require, any city, exempted village, or local school district board of education to create a position called "internal auditor," which is directly responsible to the district board (and, presumably, not to the district superintendent).[103]  If a school district does create the position, it must be staffed by a certified public accountant or registered public accountant who signs a contract with the board specifying the following:
(1) The duties of the internal auditor;
(2) The salary and other compensation to be paid, which may be increased, but may not be reduced during the term of the contract unless the district imposes an across-the-board reduction for district employees;
(3) The number of days to be worked and any holidays or paid leave; and
(4) The term of the contract.
The initial contract with an internal auditor may not exceed three years and any renewals must be for between two and five years.  In determining whether a contract will be renewed, the board must "consider" the results of an evaluation, which must be conducted in accordance with procedures specified by the board.
If the district board does not intend to renew a contract, it must provide written notice to the internal auditor not later than March 31 of the year of the contract's expiration.  If the board fails to give this notice, the internal auditor is "deemed reemployed" for one year at the same salary plus any increments authorized by the board.  A contract may be terminated only for "gross inefficiency or immorality; for willful and persistent violations of reasonable regulations of the board of education; or for other good and just cause."  Any contract termination must be done in accordance with the notice and hearing requirements of teacher contract law.
Eye exams for disabled students
(R.C. 3323.19)
The act codifies and makes permanent an uncodified provision of prior law that requires students receiving special education services from a school district to undergo, at private expense, an eye examination.  This provision was enacted in Am. Sub. H.B. 95 of the 125th General Assembly, the 2003-2005 state operating budget act, to apply in the 2004-2005 and 2005-2006 school years.
Under this provision, school districts must require each student who is identified for the first time as having a disability to undergo a comprehensive eye exam within three months after beginning any special education services under the individualized education program (IEP) prepared for the student.  This requirement does not apply to students who began receiving special education services before July 1, 2004.  Moreover, newly identified special education students who underwent a comprehensive eye exam in the nine months prior to identification need not have another exam.  All eye exams must be performed by a licensed optometrist or by a licensed physician who is "comprehensively trained and educated in the treatment of the human eye, eye disease, or comprehensive vision services" (presumably, an ophthalmologist).
The law, unchanged by the act, specifies that neither the state nor the school district is responsible for covering the cost of an eye exam, unless a student is entitled to an exam as part of the identification process or provision of subsequent services.  Presumably, a student's parent must pay for the exam or otherwise arrange for it if the student is not so entitled.  School district superintendents, in determining whether a student has met the eye exam requirement, may take into account any special circumstances of the student or the student's family that could prevent the student from having the exam before starting special education services.  Districts, however, cannot withhold special education services from a student who does not undergo an eye exam as required.
Collective bargaining agreements and use of school volunteers
(R.C. 4117.103)
The act states that no collective bargaining agreements entered into after September 29, 2005 (the provision's effective date) may prohibit a school district from "utilizing volunteers" to assist the district and its schools in performing school functions, except in the cases where the function must be performed by an employee who holds a license, permit, or certificate issued by the State Board of Education or, in the case of bus drivers, a certificate issued by the school district, an educational service center, a nonpublic school, or contractor.
School district sale of real property
(Section 206.10.21)
Under continuing law, school districts may only dispose of real property exceeding $10,000 in value by first offering it at public auction.  If the property is not sold after being offered, the property may be sold by private sale.  However, the statute provides for several other alternatives.  The district may sell the property directly to one of a number of government entities, may trade it for an item of personal property, or may trade for a different parcel of real property "needed for school purposes."  An exception to the general law on disposal of school property requires school districts, before exercising any of the above options, to first offer any property "suitable for classroom space" to community schools located in the district.  The property must be offered at its appraised fair market value.[104]
The act provides another, temporary, exception to the statute governing sale of school district property.  Until December 31, 2005, a school district may "support economic development within its territory" by using direct sale to dispose of certain property, in lieu of any of the existing alternatives, including the requirement to offer property to community schools.  The property exempted from current law by the act's provision must meet all of the following conditions:
(1) The property must be encumbered by easements, liens, or other restrictions that benefit the purchaser;
(2) The property must be adjacent to real property previously disposed of by the district; and
(3) The property will be used for commercial development.
Prohibition on lowered school district and building performance ratings
(R.C. 3302.03(B))
The act specifies that when designating performance ratings for school districts and buildings, the Department of Education must not assign a district or building a lower designation from its previous year's designation based solely on one student subgroup's not making adequate yearly progress (AYP).  This prohibition will first apply to the performance ratings issued in August 2005, which are based on data from the 2004-2005 school year.
Background
Under continuing law, the Department annually must publish how a school district or public school building performed on the three components included in determining the academic performance rating assigned to the district or building.  The Department must indicate the extent to which a district or building meets each of the performance indicators and the number of applicable performance indicators that have been achieved.  Also, the Department must include the performance index score of the district or building and whether it made AYP.  The Department publishes school district and building ratings in August in time to meet the requirements of the federal No Child Left Behind Act of 2001.
The following table shows how the performance ratings are determined.






Rating
Percentage of performance indicators met

Performance index score

Makes AYP
Excellent
94%-100%
or
*
and
Yes
94%-100%
or
*
and
No
Effective
75%-93%
or
*
and
Yes
75%-100%
or
*
and
No
Continuous improvement
0%-74%
and
*
and
Yes
50%-74%
or
*
and
No
Academic watch
31%-49%
or
*
and
No
Academic emergency
0%-30%
and
*
and
No

* The Department is required to set the values for the performance index score.
Ohio Center for Autism and Low Incidence
(R.C. 3323.30, 3323.31, 3323.32, and 3323.33)
The act formally establishes the Ohio Center for Autism and Low Incidence (OCALI) to administer programs and coordinate services for infants, preschool and school-age children, and adults with autism and other low incidence disabilities involving hearing, vision, orthopedics, traumatic brain injuries, and general health.  (OCALI has been operating within the Department of Education as an information clearinghouse under a federally funded initiative.)  The act places OCALI within the Department's Office for Exceptional Children.  It requires the Superintendent of Public Instruction, in consultation with an advisory board, to appoint the OCALI executive director.
The Superintendent must establish and organize an advisory board to assist and advise the Department in the operation of OCALI.  As determined by the Superintendent, the advisory board consists of individuals who are stakeholders in the service to persons with autism and low incidence disabilities, including the following:
(1) Persons with autism and low incidence disabilities;
(2) Parents and family members;
(3) Educators and other professionals;
(4) Higher education instructors; and
(5) Representatives of state agencies.
In its administration and coordination of programs, OCALI is charged with the following goals:
(1) Collaborate and consult with state agencies that serve persons with autism and low incidence disabilities;
(2) Collaborate and consult with institutions of higher education in development and implementation of courses for educators and other professionals serving persons with autism and low incidence disabilities;
(3) Collaborate with parent and professional organizations;
(4) Create and implement programs for professional development, technical assistance, intervention services, and research in the treatment of persons with autism and low incidence disabilities;
(5) Create a regional network for communication and dissemination of information among educators and professionals serving persons with autism and low incidence disabilities; and
(6) Develop a statewide clearinghouse for information about autism spectrum disorders and low incidence disabilities.
In developing the statewide clearinghouse, OCALI must also (a) maintain a collection of resources for public distribution, (b) monitor information on resources, trends, policies, services, and current educational interventions, and (c) respond to requests for information from parents and educators of children with autism and low incidence disabilities.
Stipend for National Board certified teachers
(R.C. 3319.55)
Under continuing law, public and chartered nonpublic school teachers who hold valid teaching certificates issued by the National Board for Professional Teaching Standards are eligible for annual state-funded stipends.  The National Board is an independent organization that awards certificates to teachers whose instructional practices, as demonstrated by evaluations of content knowledge and classroom performance, meet rigorous standards of teaching quality.  The certificates are valid for ten years, but can be renewed for an additional ten-year period.
The act limits a teacher's eligibility for an annual state stipend to the ten-year period of the initial certification.  That is, teachers who renew their National Board certification for another ten-year period are not eligible for the state stipends.
Model student acceleration policy
(R.C. 3324.10)
The act requires the State Board of Education to adopt a model student acceleration policy, addressing at least the options of whole grade acceleration, subject area acceleration, and early high school graduation.  The policy must be adopted by June 30, 2006, and must address any recommendations made in a 2005 Department of Education study conducted under the Gifted Research and Demonstration Grant Program.
The act also adds a requirement that each school district either adopt the Department's policy or adopt one of its own for implementation beginning in the 2006-2007 school year.  If a district adopts its own policy, it must cover similar issues as the State Board's.
School district latchkey programs

(R.C. 3313.207, 3313.208, and 3313.209)
Under prior law, a city, local, or exempted village school district operating a latchkey program was prohibited from expending money from the district's general fund to provide the program, unless the money was from an appropriation of the General Assembly that specifically permitted the expenditure.  A district that did not operate a latchkey program instead could furnish ancillary services, employees, or payments to any person or entity that operates a latchkey program, but was expressly prohibited from using money from the general fund of the district to pay for these services, except under certain circumstances.
The act extends the authority to provide latchkey programs to joint vocational school districts and educational service center.  It also removes the restriction against using money from a school district's or service center's general fund to provide for the program or for ancillary services.
Elimination of school districts' annual spending plan and submission of certificate of estimated resources
(R.C. 3313.489 and 5705.391; Repealed R.C. 3311.40)
The act eliminates the mandate that each board of education must adopt, as part of its annual appropriation measure, a spending plan setting forth a schedule of expenses and expenditures of all appropriated funds as well as all revenues available for appropriation by the school district for the fiscal year.  Under that mandate, a copy of the appropriation measure and spending plan had to be submitted to the Superintendent of Public Instruction, who was required to use it to determine whether the district would incur any expenses during that year that would impair its financial ability to operate its schools with the revenues available to it.  The act requires, instead, that the Superintendent make the determination based upon the districts' five-year projections of revenues and expenditures, which is required by separate law.
The act also eliminates the requirement that school districts file their amended certificates of estimated resources, produced by the county budget commission and filed with the school district pursuant to R.C. 5705.35, and their annual appropriations measure with the Department of Education.
Elimination of requirement to file statistical reports
(R.C. 3317.09)
The act eliminates (1) the requirement that the Department of Education must file a monthly report, regarding distribution of money to a school district by the state, with the Senate, the House of Representatives, the Legislative Service Commission, and the Governor, and (2) the requirement that the Department must file its annual statistical report, detailing receipts of revenues and expenditures for all school districts, with those officials as well as with the Auditor of State.
Transportation of pupils attending vocational education programs
(R.C. 3327.01)
The act codifies a provision requiring the boards of education of all city, local, and exempted village school districts that transport pupils according to a career-technical plan approved by the State Board of Education.  Specifically, it requires them to transport high school pupils who attend career-technical classes at another district, including a joint vocational school district, from the public high school operated by the district to which the student is assigned to the career-technical program.
Updated five-year projections for fiscal watch and fiscal emergency school districts
(R.C. 3316.043)
The act requires that upon the approval by the Superintendent of Public Instruction of a financial plan (required for fiscal watch districts) or a financial recovery plan (required for fiscal emergency districts), the board of education of a school district that is in fiscal watch status, or the financial planning and supervision commission for a district in fiscal emergency status, must revise the district's five-year projection of revenues and expenditures so that the projection is consistent with the financial plan or financial recovery plan.
Suspension of set-asides for school districts in certain circumstances
(R.C. 3315.17, 3315.18, 3316.06, and 3316.16)
Background
Continuing law requires the board of education of each city, exempted village, local, and joint vocational school district to establish a "Textbook and Instructional Materials Fund" and a "Capital and Maintenance Fund" and deposit into each of those funds an amount equal to 3% (or another percentage if established by the Auditor of State) of the base-cost formula amount for the preceding fiscal year, multiplied by the district's student population for the preceding fiscal year.  Money in the Textbook and Instructional Materials Fund must be used solely for textbooks, instructional software, and instructional materials, supplies, and equipment, while money in the Capital and Maintenance Fund must be used solely for acquisition, replacement, enhancement, maintenance, or repair of permanent improvements.  Any money not used in either fund in any fiscal year carries over to the next fiscal year.
School districts in fiscal emergency
The act exempts a school district from making otherwise required deposits into the funds while the district is in a fiscal emergency period and excuses the district from eliminating any deficits in the funds that accrued in prior years.  Before the district's financial planning and supervision commission is terminated, however, the district's five-year financial forecast must project that the district will comply with the requirement to make those deposits the year after the commission is proposed to be terminated.
School districts in fiscal watch or fiscal caution
The act permits a school district in fiscal watch or fiscal caution to apply to the Superintendent of Public Instruction for an annual waiver from the requirements to deposit money into the set-aside funds.  Under the waiver, the district may be permitted to deposit less than the required amounts or permitted to make no deposits at all into the funds.  The Superintendent may grant a waiver only if the district demonstrates to the Superintendent's satisfaction that the deposits will create an undue financial hardship on the district.
Other school districts
The act permits any district not in fiscal emergency, fiscal watch, or fiscal caution to apply for a waiver from the set-aside requirements, but only once every three consecutive fiscal years.  The waiver that may be granted to a district not in fiscal emergency, watch, or caution is the same type that may be granted to a fiscal watch or caution district, as described above.  The Superintendent may grant a waiver to such a district only if the district demonstrates to the Superintendent's satisfaction that (1) the deposits will necessitate reduction or elimination of a program critical to the academic success of students and (2) no other reasonable alternatives exist.
Prohibition against school district operation without a charter
(R.C. 3301.16)
Under continuing law, the State Board of Education has the power to classify and charter school districts and individual schools within each district.  The Board also has the power to revoke the charter of any school district or school that fails to meet the Board's standards for elementary and high schools.  The act explicitly prohibits any school district or individual school operated by a school district from operating without a charter issued by the Board.
Map required in chartering new school districts
(R.C. 3301.16)
The act requires the State Board of Education to require any party proposing the creation of a new school district to submit to the Board a map, certified by the county auditor of the county in which the proposed new district is located, that shows the boundaries of the proposed new district.  If the proposed new district is located in more than one county, the map must be certified by the county auditor of each county.
Legislative committee to study school district consolidation
(Section 206.10.05)
The act establishes a legislative committee, composed of six members including two majority party members and one minority party member from each house, appointed by the Speaker of the House and the Senate President, respectively.  The committee must study the feasibility and economic impact (including possible cost savings) of city, local, and exempted village school district consolidation.  If the committee determines that school district consolidation is feasible, the committee must recommend legislation to accomplish the consolidation.  The committee must report its findings to the General Assembly not later than June 30, 2006 (one year after the act's effective date).  Following its report of findings, the committee is dissolved.
School Physical Fitness and Wellness Advisory Council
(Section 206.10.12)
The act establishes the School Physical Fitness and Wellness Advisory Council to develop best practices regarding nutrition education, physical activity for students, and school-based activities and school-business partnerships that promote student wellness.  The Council must provide information no later than December 31, 2005, to school districts participating in the federal school lunch program to facilitate adoption of local wellness policies, and must develop strategies for evaluating the implementation of the policies.
The 12 members of the School Physical Fitness and Wellness Advisory Council include one representative of each of the following:
(1) Ohio Association for Health, Physical Education, Recreation and Dance;
(2) Ohio School Food Service Association;
(3) Ohio School Boards Association;
(4) Ohio Dietetic Association;
(5) Ohio State Medical Association;
(6) The food industry, appointed by the Ohio Chamber of Commerce;
(7) Ohio Parent Teacher Association;
(8) Ohio Soft Drink Association;
(9) Department of Education, appointed by the Superintendent of Public Instruction;
(10) Ohio Parks and Recreation Association;
(11) Ohio Children's Hunger Alliance; and
(12) The Director of Health.
The representative of the Department of Education serves as chairperson.

BOARD OF EMBALMERS AND FUNERAL DIRECTORS


Funeral director apprenticeships
(R.C. 4717.05)
Under continuing law, any person who desires to be licensed as a funeral director must apply to the Board of Embalmers and Funeral Directors and meet several requirements.  One requirement that is modified by the act is that the applicant serve a one-year apprenticeship under a licensed funeral director and assist the funeral director in directing at least 25 funerals.  The act requires that the applicant "satisfactorily complete" the apprenticeship instead of "serve" it.
Continuing law also requires the applicant to satisfactorily complete at least 12 months of mortuary science college training; however, the applicant may substitute a two-year apprenticeship under a licensed funeral director assisting the funeral director in at least 50 funerals.  The act specifies that the applicant must "satisfactorily complete" the two-year apprenticeship if the applicant chooses to substitute it for mortuary science college training.
STATE EMPLOYMENT RELATIONS BOARD


SERB Training, Publications, and Grants Fund
(R.C. 4117.24)
Continuing law that is modified by the act requires the State Employment Relations Board (SERB) to deposit into the Training and Publications Fund all payments received by SERB for copies of documents, rulebooks, and other publications; fees received from seminar participants; and receipts from the sale of clearinghouse data.  Continuing law also specifies the purposes for which these funds may be used.
The act renames the Fund the Training, Publications, and Grants Fund.  It also allows SERB to seek, solicit, apply for, accept, receive and enter into contracts concerning grants, gifts, and contributions.  The act requires that all of the money received through these sources be deposited into the Fund.  Under the act, these funds must be held for, used for, and applied to only the purposes for which those grants are made and for which those contracts are entered.
In addition to the moneys received from the sources listed in ongoing law and the moneys received from grants, gifts, and contributions as described in the paragraph above, SERB also must deposit into the Fund moneys received from donations, awards, bequests, reimbursement for professional services and expenses related to those services, and from funds to support the development of labor relations services and programs.  In addition to the purposes specified in continuing law, the act requires the Fund to be used to defray the costs associated with grant projects, innovative labor-management cooperation programs, related research projects, the advancement in professionalism of public sector relations, and for the professional development of board employees.
ENVIRONMENTAL PROTECTION AGENCY
Motor vehicle inspection and maintenance program
(R.C. 3704.035, 3704.14, 3704.142 (repealed), 3704.143, 3704.17 (repealed), 3704.99, 4503.103, and 5552.01)

Under contracts that are authorized by statute and that are scheduled to expire on December 31, 2005, the Ohio Environmental Protection Agency (OEPA) oversees the implementation of an enhanced motor vehicle inspection and maintenance program in 14 counties in the state in the Cleveland-Akron, Cincinnati, and Dayton metropolitan areas.  The program operates under the name E-Check and is designed to comply with the federal Clean Air Act Amendments.  Motor vehicle inspections are conducted under the program by a contractor selected pursuant to requirements established in law enacted in 1993.  There is a separate contract governing each metropolitan area in which the program is operating.
As indicated above, the current contracts for the program expire on December 31, 2005.  Under law retained in part by the act, the Director of Environmental Protection cannot renew the contracts or enter into new contracts.  In addition, upon the expiration or termination of the contracts, the Director must terminate the program and cannot implement a new program unless the program is authorized by the General Assembly.  The act revises those prohibitions and requirements in order to provide for the continuation of the program in a portion of the state as discussed below.
In providing for the continuation of the program, the act eliminates many of the specific statutory requirements related to it, replacing those requirements with more general authority granted to OEPA.  Under that authority, the Director must continue to implement an enhanced motor vehicle inspection and maintenance program in counties in which an enhanced program is federally mandated.  The program must operate for a period of two years beginning on January 1, 2006, and ending on December 31, 2007, and is required to be substantially similar to the enhanced program implemented in those counties under the contract that is scheduled to expire on December 31, 2005.  The act prohibits the Director from implementing a motor vehicle inspection and maintenance program in any county other than a county in which the program is federally mandated.  Further, the act specifically states that the enhanced program established under the act expires on December 31, 2007, and cannot be continued beyond that date unless otherwise federally mandated.
Under the act, the enhanced program, at a minimum, must do all of the following:
(1) Comply with the federal Clean Air Act;
(2) Provide for the extension of a contract for a period of two years beginning on January 1, 2006, and ending on December 31, 2007, with the contractor who conducted the enhanced motor vehicle inspection and maintenance program in those federally mandated counties pursuant to a contract that is scheduled to expire on December 31, 2005;
(3) Provide for the issuance of inspection certificates; and
(4) Provide for a new car exemption for motor vehicles four years old or newer and provide that a new motor vehicle is exempt for four years regardless of whether legal title to the motor vehicle is transferred during that period.
Under prior law, if the General Assembly authorized a new program, that program was required to include a new car exemption for motor vehicles five years old or newer.  As indicated above, the act instead requires the program to include a new car exemption for motor vehicles four years old or newer.
The act requires the Director to adopt rules in accordance with the Administrative Procedure Act that the Director determines are necessary to implement the enhanced program.  The Director may continue to implement and enforce rules pertaining to the enhanced motor vehicle inspection and maintenance program previously implemented, provided that the rules do not conflict with the requirements established in the act.
The act creates the Motor Vehicle Inspection and Maintenance Fund, consisting of money received by the Director from any fees for inspections that are established in rules adopted under the act.  The Fund is a continuation of the Fund of the same name that existed under prior law.  The Director must use money in the Fund solely for the implementation, supervision, administration, operation, and enforcement of the enhanced motor vehicle inspection and maintenance program.
Finally, the act makes several technical changes necessitated by the repeal of the statutes governing the program in existence on the act's effective date.
Solid waste disposal fees
Introduction
Continuing law levies two state fees on the disposal of solid wastes.  The first is a $1 per-ton fee, of which one-half of the proceeds must be deposited in the state treasury to the credit of the Hazardous Waste Facility Management Fund and one-half of the proceeds must be deposited in the state treasury to the credit of the Hazardous Waste Clean-up Fund.  Both Funds are administered by OEPA.  The second fee is another $1 per-ton fee that is used to fund OEPA's solid and infectious waste and construction and demolition debris management programs.  Solid waste disposal fees are collected by the owners and operators of solid waste facilities as trustees for the state.
New solid waste disposal fee
(R.C. 3734.57 and 3745.015)
The act establishes a new solid waste disposal fee of $1.50 per ton.  Money from this new fee is required to be deposited in the state treasury to the credit of the Environmental Protection Fund, which is created by the act.  Money in the Fund is to be used by OEPA to pay its costs associated with administering and enforcing, or otherwise conducting activities under, the Environmental Protection Agency Law, the Air Pollution Control Law, the Solid, Hazardous, and Infectious Waste Law, the Voluntary Action Program Law, the Low-Level Radioactive Waste Law, the Radiation Control Program Law, the Emergency Response and Planning Law, the Hazardous Substances Law, the Cessation of Regulated Operations Law, the Risk Management Program Law, the Water Pollution Control Law, the Safe Drinking Water Law, the Conservancy Districts Law, the County Water Supply Systems Law, the Watershed Districts Law, the Private Sewer Systems Law, the Ohio River Sanitation Compact Law, the Sanitary Districts Law, the Sewer Districts and County Sewers Law, the Regional Water and Sewer Districts Law, the Real Property Tax Law, and the Water Resources Council Law.  Collection of the fee is to begin on July 1, 2005, and terminates on June 30, 2008.
Revisions concerning continuing solid waste disposal fees
(R.C. 3734.57)
As discussed above, continuing law levies a $1 per-ton fee on the disposal of solid wastes to fund OEPA's solid and infectious waste and construction and demolition debris management programs.  Under prior law, the fee was scheduled to sunset on June 30, 2006.  The act continues the fee through June 30, 2008.  Further, the act expands the purposes for which money generated from the fee may be used by allowing the money to be used to provide compliance assistance to small businesses.
The act also establishes a sunset date of June 30, 2008 for the $1 per-ton solid waste disposal fee the proceeds of which are required to be credited to the Hazardous Waste Facility Management Fund and the Hazardous Waste Clean-up Fund.  This fee previously had no sunset date.
Procedures for collecting and remitting state solid waste disposal fees
(R.C. 3734.57)
Under prior law, only the owners or operators of solid waste disposal facilities were required to collect state solid waste disposal fees as trustees for the state and to submit the fees and prepare and file with the Director of Environmental Protection monthly returns indicating the total tonnage of solid wastes received for disposal at the gates of the facilities and the total amount of fees collected in accordance with specified procedures.  Not later than 30 days after the last day of the month to which such a return applied, an owner or operator had to mail to the Director the return for that month together with the fees collected during that month as indicated on the return.  The act replaces the former mechanism for collecting and remitting the fees with a mechanism that, while retaining certain portions of the former mechanism, includes additional procedures and requirements.
First, the act generally requires the disposal fees to be collected by either a solid waste transfer facility or a solid waste disposal facility, whichever facility first receives the solid wastes.  The fees are required to be collected by a transfer facility located in Ohio if the solid wastes are taken to the transfer facility prior to being transported to a solid waste disposal facility for disposal.  The fees must be collected by a solid waste disposal facility if the solid wastes are not taken to a solid waste transfer facility located in Ohio prior to being transported to the disposal facility.  The fees must be collected by the owner or operator of the solid waste transfer or disposal facility as a trustee for the state.  However, the act specifies that the fees do not apply to materials separated from a mixed waste stream for recycling by a generator or materials removed from the solid waste stream through recycling, as "recycling" is defined in rules adopted by the Director.
The act applies the requirement that owners and operators of solid waste facilities submit a return to the owners and operators of both transfer and disposal facilities and retains the time frame, 30 days, within which the return must be submitted, but it specifies that the return must be filed each month and that the return must indicate the total tonnage of solid wastes received at the facility during that month and the total amount of fees required to be collected during that month.  In addition, the act specifies that the amount of fees required to be collected is equal to the total tonnage of solid wastes received at a transfer facility multiplied by the fees levied or, in the case of a solid waste disposal facility, the total tonnage of solid wastes received at the facility that were not previously taken to a transfer facility located in Ohio multiplied by the fees levied.  The act also requires the owner or operator of a solid waste disposal facility to indicate on the return the total tonnage of solid wastes received from transfer facilities located in this state during that month for which the fees were required to be collected by the transfer facilities.  The monthly returns must be filed on a form prescribed by the Director.
The act also establishes a discount for the timely submission of a return and fees.  Specifically, the act provides that if the return is filed and the amount of fees due is paid in a timely manner as discussed above, the owner or operator may retain a discount of ¾ of 1% of the total amount of the fees that are required to be paid as indicated on the return.
Law partially changed by the act authorizes the owner or operator of a solid waste facility to request an extension of not more than 30 days for filing the return and remitting the fees.  Formerly, if the fees were not remitted within 30 days after the last day of the month during which they were collected or were not remitted by the last day of an extension approved by the Director, the owner or operator was required to pay an additional 50% of the amount of the fees for each month that they were late.  The act clarifies that fees must be remitted within 30 days after the last day of the month to which the return applies, or by the last day of an extension, and provides that late submission of the return and the fees results in a loss of the ¾ of 1% timely payment discount (see above) and a charge of 10%, rather than 50%, of the amount of the fees for each month the fees are late.  For purposes of calculating the late fee, the first month in which fees are late begins on the first day after the deadline has passed for timely submitting the return and fees, and one additional month is counted every 30 days thereafter.
The act authorizes the owner or operator of a solid waste facility to request a refund or credit of state solid waste disposal fees remitted to the Director that have not been paid to the owner or operator.  Such a request can be made only if the fees have not been collected by the owner or operator, have become a debt that has become worthless or uncollectable for a period of six months or more, and may be claimed as a deduction, including a deduction claimed if the owner or operator keeps accounts on an accrual basis, under the federal Internal Revenue Code and regulations adopted under it.  Prior to making a request for a refund or credit, an owner or operator must make reasonable efforts to collect the applicable fees.  A request for a refund or credit cannot include any costs resulting from those efforts to collect unpaid fees.
A request for a refund or credit of fees must be made in writing, on a form prescribed by the Director, and must be supported by evidence that may be required in rules adopted by the Director.  After reviewing the request, the Director may grant a refund to the owner or operator or may permit a credit to be taken by the owner or operator on a subsequent monthly return submitted by the owner or operator.  The amount of a refund or credit cannot exceed an amount that is equal to 90 days' worth of fees owed to an owner or operator by a particular debtor of the owner or operator.  A refund or credit cannot be granted by the Director to an owner or operator more than once in any 12-month period for fees owed to the owner or operator by a particular debtor.  If, after receiving a refund or credit from the Director, an owner or operator receives payment of all or part of the fees, the owner or operator must remit the fees with the next monthly return submitted to the Director together with a written explanation of the reason for the submittal.
Continuing law provides that solid waste disposal fees are in addition to all other applicable fees and taxes.  Under former law, they were to be added to any other fee or amount specified in a contract that was charged by the owner or operator of a solid waste disposal facility or to any other fee or amount that was specified in a contract that was charged by a transporter of solid wastes.  The act instead states that the fees must be paid by the customer to the owner or operator of a solid waste transfer or disposal facility notwithstanding the existence of any provision in a contract that the customer may have with the owner or operator that would not require or allow such payment.
Technical changes
(R.C. 3734.57)
The act makes technical changes to the law related to state solid waste disposal fees and solid waste disposal fees levied by solid waste management districts.  In particular, it consolidates repetitive language and eliminates provisions that are no longer applicable.
Definition of "solid wastes"
(R.C. 3734.01)
The Governor vetoed a provision that would have excluded from the definition of "solid wastes" in the Solid, Infectious, and Hazardous Waste Law nontoxic, nonhazardous, unwanted fired and unfired, glazed and unglazed, structural shale and clay products.  In addition, the Governor vetoed a second provision that would have excluded spent petroleum refinery hydrotreating, hydrorefining, and hydrocracking catalysts that are used to produce ferrovandium, iron nickel molybdenum, and calcium aluminate alloys for the steel, iron, and nickel industries unless the catalysts are disposed of at a licensed solid waste facility or are accumulated speculatively.  The act defines "accumulated speculatively" to have the same meaning as in rules adopted by the Director of Environmental Protection under the Solid, Infectious, and Hazardous Waste Law.  This definition was not vetoed by the Governor.
Construction and demolition debris facilities
Moratorium
(Section 513.03)
The act provides that notwithstanding any provision of law to the contrary and during the period beginning July 1, 2005, and ending December 31, 2005, the Director of Environmental Protection or a board of health is not permitted to issue a license to open a new construction and demolition debris facility under the Construction and Demolition Debris Law and rules adopted under it.  Except as otherwise provided by the act, the moratorium applies both with respect to an application for a license to open a new construction and demolition debris facility that is submitted on or after the effective date of the act and to an application for such a license that has been submitted to the Director or a board of health prior to the act's effective date, but concerning which a license for a facility has not been issued as of that effective date.
The board of county commissioners of a county may request the Director or a board of health to continue to process an application for a license to open a new construction and demolition debris facility in that county that has been submitted to the Director or board of health prior to the act's effective date.  After receiving such a request, the Director or board of health may then issue a license for the new construction and demolition debris facility notwithstanding the moratorium established by the act.
The moratorium does not apply to a license for a new construction and demolition debris facility if the new facility will be located adjacent or contiguous to a previously licensed construction and demolition debris facility.  The moratorium also does not apply to an expansion of or other modification to an existing licensed construction and demolition debris facility.
Construction and Demolition Debris Facility Study Committee
(Section 513.03)
The act creates the Construction and Demolition Debris Facility Study Committee composed of the following 13 members:
(1) Three members of the House of Representatives appointed by the Speaker of the House of Representatives;
(2) Three members of the Senate appointed by the President of the Senate;
(3) The Director of Environmental Protection or the Director's designee;
(4) One member representing health districts in Ohio appointed by the Governor;
(5) Three members representing the construction and demolition debris industry in the state appointed by the Governor, one of whom must be the owner of both a construction and demolition debris facility and a solid waste disposal facility; and
(6) Two members representing environmental consulting organizations or firms in Ohio appointed by the Governor.
Appointments must be made not later than 15 days after the effective date of the act.  Members are not permitted to receive compensation for their service on the Committee or reimbursement for expenses incurred related to that service.
The Committee must study the laws of Ohio governing construction and demolition debris facilities and the rules adopted under those laws and must make recommendations to the General Assembly regarding changes to those laws, including, but not limited to, recommendations concerning the following topics:
(1) The establishment of a code of ethics for owners and operators of construction and demolition debris facilities;
(2) The establishment of best management practices;
(3) Licensing requirements;
(4) Testing and monitoring requirements and protocols;
(5) Siting and setback criteria for construction and demolition debris facilities;
(6) State and local oversight and regulatory authority;
(7) Fees;
(8) The regulation of construction and demolition debris from sources inside and outside the state; and
(9) The closure process for construction and demolition debris facilities.
The Committee must submit a report of its study and any recommendations that it has developed to the General Assembly not later than September 30, 2005.  The Committee ceases to exist on the date on which it submits its report.  The act requires the General Assembly to enact legislation based on the recommendations of the Committee as soon as is practicable.
Exclusion from construction and demolition debris disposal fee
(R.C. 3714.07)
Continuing law establishes a 30¢ per cubic yard or 60¢ per ton fee, as applicable, on the disposal of construction and demolition debris at a construction and demolition debris facility or at a solid waste facility.  However, under law largely retained by the act, the requirement that the fee be levied on the disposal of construction and demolition debris at a solid waste facility does not apply if there is no licensed construction and demolition debris facility within 40 miles of the solid waste facility as determined by a facility's property boundaries.  The act revises this exclusion by reducing the distance between facilities to within 35 miles rather than within 40 miles.
In addition, the act exempts from both the continuing fee and the new fees established by the act (see below) the disposal at a licensed construction and demolition debris facility of source separated materials that are exclusively composed of reinforced or nonreinforced concrete, asphalt, clay tile, building or paving brick, or building or paving stone when either of the following applies:
(1) The materials are placed within the limits of construction and demolition debris placement at the facility as specified in the facility's license, are not placed within the unloading zone of the facility, and are used as a fire prevention measure in accordance with rules adopted by the Director under the Construction and Demolition Debris Law; or
(2) The materials are not placed within the unloading zone of the facility or within the limits of construction and demolition debris placement at the facility as specified in the facility's license, but are used as fill material, either alone or in conjunction with clean soil, sand, gravel, or other clean aggregates, in legitimate fill operations for construction purposes at the facility or to bring the facility up to a consistent grade.
New construction and demolition debris disposal fees to fund projects of soil and water conservation districts and recycling and litter prevention program
(R.C. 1502.02, 1515.14, 3714.073, and 5733.122 (repealed))
As discussed above, continuing law establishes a construction and demolition debris disposal fee of 60¢ per ton or 30¢ per cubic yard, the proceeds of which must be used by the OEPA or a local board of health, as applicable, to administer the Construction and Demolition Debris Law and rules adopted under it.  In addition, continuing law authorizes the Director of Environmental Protection to adopt a fee of 10¢ per ton or 5¢ per cubic yard for certain ground water monitoring purposes related to construction and demolition debris facilities.
The act establishes an additional 25¢ per ton or 12.5¢ per cubic yard fee on the disposal of construction and demolition debris and requires the proceeds of the new fee to be credited to the Soil and Water Conservation District Assistance Fund, which is created by the act.  The Fund must be used to provide funding to soil and water conservation districts as matching money for local contributions to the districts.
Further, the act establishes a second additional fee of 75¢ per ton or 37.5¢ per cubic yard on the disposal of construction and demolition debris and requires the proceeds to be credited to the continuing Recycling and Litter Prevention Fund, which is administered by the Division of Recycling and Litter Prevention in the Department of Natural Resources.  The Division uses money in the Fund to operate its recycling and litter prevention program, which includes the awarding of grants.
Under prior law, funding for the Recycling and Litter Prevention Fund came from a corporate franchise tax on litter stream products.  The act retains that tax, but eliminates the crediting of receipts from the tax to the Fund.
The act specifies that the two new construction and demolition debris disposal fees do not apply to the disposal of construction and demolition debris at a licensed solid waste facility if the owner or operator of the solid waste facility chooses to collect fees on the disposal of the construction and demolition debris that are identical to the fees that are collected under the Solid Waste Management Districts Law and the Solid, Infectious, and Hazardous Waste Law on the disposal of solid wastes at that facility.
Hazardous waste cleanups
Use of Environmental Protection Remediation Fund for cleanups
(R.C. 3734.20, 3734.21, 3734.22, and 3734.23)
Under continuing law, the Director of Environmental Protection may conduct investigations at locations where hazardous waste was treated, stored, or disposed of for the purpose of determining if the waste constitutes a substantial threat to public health or safety or is causing or contributing to air or water pollution or soil contamination and may conduct clean-up activities at such locations if he finds that such a threat exists.  Further, the Director may acquire any hazardous waste facility or solid waste facility containing significant quantities of hazardous waste that because of the presence of hazardous waste constitutes an imminent and substantial threat to public health or safety or results in air or water pollution or soil contamination.  After acquisition the Director is required to perform closure or other measures necessary to abate conditions causing or contributing to air or water pollution or soil contamination or conditions that constitute a threat to public health or safety.
Continuing law authorizes these investigation, clean-up, and acquisition activities to be conducted with moneys in the Hazardous Waste Clean-up Fund.  The act authorizes the Director to expend moneys from the continuing Environmental Protection Remediation Fund for those activities as well as the Hazardous Waste Clean-up Fund.  Further, under the act, moneys resulting from any agreement with a landowner to reimburse the Director for the costs of those activities or moneys recovered by the Director through judicial actions are required to be deposited in either the Hazardous Waste Clean-up Fund or the Environmental Protection Remediation Fund, from whichever Fund moneys were expended, rather than only the former Fund.
Environmental clean-up agreements
(R.C. 3734.22)
Continuing law authorizes the Director, before beginning to clean up any facility, to enter into an agreement with the owner of land on which the facility is located, or with the owner of the facility, specifying the measures to be performed and authorizing the Director, employees of the OEPA, or contractors retained by the Director to enter on the land and perform specified measures.  Under prior law, each agreement was required to contain provisions for the reimbursement of the state for the costs of the cleanup.  Further, upon a breach of the reimbursement provisions by the owner of the land or facility, the Director was required to record the unreimbursed portion of the costs of cleanup at the office of the county recorder of the county in which the facility was located.  The act makes the reimbursement requirement optional.  Thus, agreements may be entered into without a provision for reimbursement of the state's clean-up costs.  Further, the requirement that the Director record unreimbursed costs upon breach of an agreement is also made optional by the act.  The act retains a provision stating that costs so recorded constitute a lien against the property on which the facility is located.
Contract bidding requirements
(R.C. 3704.21 and 3704.23)
As discussed above, under continuing law, the Director may expend moneys to acquire property for the purpose of conducting clean-up activities or may conduct a cleanup without acquiring the property.  In either case, the Director must develop a plan for the cleanup.  Such a plan may include entering into a contract with a contractor for purposes of the cleanup.  Continuing law establishes bidding procedures for contractors.  Under prior law, those procedures applied only if the cleanup was conducted on property acquired by the Director and under certain circumstances if the Director had not acquired property.  The act clarifies that the bidding procedures apply to all situations in which the Director conducts clean-up activities.
Exemption from Department of Administrative Services contracting requirements
(R.C. 123.01)
Continuing law requires the Director of Administrative Services to make contracts for and supervise the construction and repair of buildings under the control of a state agency with certain exceptions.  The act also exempts from this requirement any contracts for the construction of projects that do not require the issuance of a building permit or the issuance of a certificate of occupancy and that are necessary to remediate conditions at a hazardous waste facility, solid waste facility, or other location at which the Director of Environmental Protection has reason to believe there is a substantial threat to public health or safety or the environment.  The act grants authority to enter into such contracts to the Director of Environmental Protection.
Exemption from fees for certain clean-up activities
(R.C. 3734.57 and 3734.573)
The act authorizes the Director of Environmental Protection to issue an order exempting from the state, solid waste management district, and local government solid waste disposal fees and solid waste management district solid waste generation fees solid wastes, including, but not limited to, scrap tires, that are generated, transferred, or disposed of as a result of certain contracts providing for the expenditure of public funds concerning certain clean-up activities.  Specifically, the fees do not apply to contracts entered into by the Administrator or Regional Administrator of the United States Environmental Protection Agency, the Director of Environmental Protection, or the Director of Administrative Services on behalf of the Director of Environmental Protection for the purpose of remediating conditions at a hazardous waste facility, solid waste facility, or other location at which the Administrator, Regional Administrator, or Director of Environmental Protection has reason to believe that there is a substantial threat to public health or safety or the environment or that conditions are causing or contributing to air or water pollution or soil contamination.  Such an order issued by the Director must include a determination that the amount of the fees not received by a solid waste management district as a result of the order will not adversely impact the implementation and financing of the district's approved solid waste management plan and any approved amendments to the plan.  The act declares such an order a final action of the Director.
Repayment of clean-up costs to Hazardous Waste Clean-up Fund
(R.C. 3734.28 and 3745.12)
Under continuing law, OEPA is authorized to expend money from the Hazardous Waste Clean-up Fund to pay the costs of clean-up activities under the state statutes governing hazardous waste and to recover the money expended for such a clean-up in a civil action.  However, under prior law, any money recovered was required to be deposited in the continuing Immediate Removal Fund, which is used for other environmental clean-ups.  The act instead requires that money expended from the Hazardous Waste Clean-up Fund and recovered in a civil action be returned to the Hazardous Waste Clean-up Fund.
Scrap Tire Management Program
Fee on tire sales
(R.C. 3734.901)
Continuing law establishes a 50¢ per tire fee on the sale of tires.  The fee provides revenue to defray the cost of administering and enforcing the law governing the management of scrap tires, rules adopted under that law, and terms and conditions of orders, variances, and licenses issued under that law; to abate accumulations of scrap tires; to make grants to promote research regarding alternative methods of recycling scrap tires and loans to promote the recycling or recovery of energy from scrap tires; and to defray the costs of administering the collection of the fee.  The fee was scheduled to sunset on June 30, 2006.  The act extends the sunset to June 30, 2011.
Funding for Department of Taxation's administration of fee on tire sales
(R.C. 3734.9010)
Under law largely retained by the act, a percentage of the amounts paid to the Treasurer of the State pursuant to the Scrap Tire Management Program must be certified directly to the credit of the Tire Fee Administrative Fund for appropriation to the Department of Taxation for use in paying the Department's costs in administering the fee on tires that is used to fund the Program.  Under prior law, that percentage was 4%.  The act reduces the amount of money that the Department receives from 4% to 2%.
Cost recovery for scrap tire cleanups
(R.C. 3734.85)
Ongoing law establishes procedures by which the Director of Environmental Protection may order the removal of accumulations of scrap tires for transportation to a scrap tire storage, monocell, monofill, or recovery facility.  If the person to whom an order is given fails to comply with the order, the Director may perform the necessary removal actions.  In that case, the person to whom the removal order is issued is liable to the Director for the costs incurred by him in conducting the removal and is liable for other costs associated with the removal.  Upon the written request of the Director, the Attorney General must bring a civil action against the person responsible for the accumulation of the scrap tires that were the subject of the removal operation for the recovery of the costs of the removal action.  Under law revised by the act, if the Director is unable to recover the costs through a civil action, he must certify them to the county recorder of the county in which the accumulation of scrap tires was located.  The recorder must record the costs as a lien on the property.  The costs constitute a lien until discharged.
The act alters the procedures related to cost recovery by requiring the Director to keep an itemized record of costs and record the costs at the office of the county recorder after completing the actions for which the costs were incurred rather than after a civil action has been adjudicated.
Fees for air pollution control permits to install based on process weight rates
(R.C. 3745.11(F))
Continuing law requires a person to pay a fee for a permit to install under the Air Pollution Control Law for processes that are used in specified industries that are identified by applicable standard industrial classification codes.  Under former law, the specified industries included all of the following:  bituminous coal and lignite mining; bituminous coal and lignite mining services; dimension stone; crushed and broken limestone; crushed and broken stone, not elsewhere classified; construction sand and gravel; industrial sand; cut stone and stone products; and minerals and earth, ground or otherwise treated.  The act revises the industrial classifications by eliminating seven classifications and adding nine classifications.  The table below shows the former classifications eliminated by the act and the classifications added by it:

Industrial classifications
eliminated by the act
Industrial classifications
added by the act
1211 Bituminous coal and lignite miningMajor group 10, metal mining
1213 Bituminous coal and lignite mining servicesMajor group 12, coal mining
1411 Dimension stoneMajor group 14, mining and quarrying of nonmetallic minerals
1422 Crushed and broken limestone
1427 Crushed and broken stone, not elsewhere classifiedIndustry group 204, grain mill products
1442 Construction sand and gravel2873 Nitrogen fertilizers
1446 Industrial sand2874 Phosphatic fertilizers
4221 Grain elevators (storage only)
5159 Farm related raw materials
5261 Retail nurseries and lawn and garden supply stores


The act retains two classifications:  3281 Cut stone and stone products, and 3295 Minerals and earth, ground or otherwise treated.
Extension of various fee-related provisions
Synthetic minor facility emissions fees
(R.C. 3745.11(D))
Under continuing law, each person who owns or operates a synthetic minor facility must pay an annual fee based on the sum of the actual annual emissions from the facility of particulate matter, sulfur dioxide, nitrogen dioxide, organic compounds, and lead in accordance with a fee schedule.  "Synthetic minor facility" means a facility for which one or more permits to install or permits to operate have been issued for the air contaminant sources at the facility that include terms and conditions that lower the facility's potential to emit air contaminants below the major source thresholds established in rules adopted under continuing law.  Prior law required the fee to be paid through June 30, 2006.  The act extends the fee through June 30, 2008.
Water pollution control fees and safe drinking water fees
(R.C. 3745.11(L), (M), and (N) and 6109.21)
Under law retained in part by the act, a person applying for a plan approval for a wastewater treatment works is required to pay a fee of $100 plus 0.65 of 1% of the estimated project cost, up to a maximum of $15,000, when submitting an application through June 30, 2006, and a fee of $100 plus 0.2 of 1% of the estimated project cost, up to a maximum of $5,000, on and after July 1, 2006.  Under the act, the first tier fee is extended through June 30, 2008, and the second tier applies to applications submitted on or after July 1, 2008.
Continuing law establishes two schedules for annual discharge fees to be paid by holders of national pollutant discharge elimination system (NPDES) permits with an average daily discharge flow of 5,000 or more gallons per day.  Under each of the schedules, one of which is for public dischargers and one of which is for industrial dischargers, the fees are based on the average daily discharge flow and increase as the flow increases.  Under prior law, the fees were due by January 30, 2004, and January 30, 2005.  The act extends payment of the fees and the fee schedules to January 30, 2006, and January 30, 2007.
In addition to the fee schedules described above, continuing law imposes a $7,500 surcharge to the annual discharge fee applicable to major industrial dischargers.  Formerly, the surcharge was required to be paid by January 30, 2004, and January 30, 2005.  The act requires the surcharge to be paid annually by January 30, 2006, and January 30, 2007.
Under ongoing law, one category of public discharger and eight categories of industrial dischargers that are NPDES permit holders are exempt from the annual discharge fees that are based on average daily discharge flow.  Instead, they are required to pay an annual discharge fee of $180.  Under prior law, the fee was due annually not later than January 30, 2004, and January 30, 2005.  The act requires the fee to be paid annually by January 30, 2006, and January 30, 2007.
The Safe Drinking Water Law prohibits anyone from operating or maintaining a public water system without an annual license from the Director of Environmental Protection.  Applications for initial licenses or license renewals must be accompanied by a fee, which is calculated using schedules for the three basic categories of public water systems established in continuing law.  The fee for initial licenses and license renewals formerly was required in statute through June 30, 2006, and had to be paid annually prior to January 31, 2006.  The act extends the initial license and license renewal fee through June 30, 2008, and requires the fee to be paid annually prior to January 31, 2008.
The Safe Drinking Water Law also requires anyone who intends to construct, install, or modify a public water supply system to obtain approval of the plans from the Director.  Ongoing law establishes a fee for such plan approval of $150 plus 0.35 of 1% of the estimated project cost.  Under law retained in part by the act, the fee cannot exceed $20,000 through June 30, 2006, and $15,000 on and after July 1, 2006.  The act instead specifies that the $20,000 limit applies to persons applying for plan approval through June 30, 2008, and the $15,000 limit applies to persons applying for plan approval on and after July 1, 2008.
Continuing law establishes two schedules of fees that the Environmental Protection Agency charges for evaluating laboratories and laboratory personnel for compliance with accepted analytical techniques and procedures established under the Safe Drinking Water Law.  Under law retained in part by the act, a schedule with higher fees is applicable through June 30, 2006, and a schedule with lower fees is applicable on and after July 1, 2006.  The act continues the higher fee schedule through June 30, 2008, and applies the lower fee schedule to evaluations conducted on or after July 1, 2008.  The act continues through June 30, 2008, a provision stating that an individual laboratory cannot be assessed a fee more than once in a three-year period unless the person requests the addition of analytical methods or analysts, in which case the person must pay $1,800 for each additional survey requested.
Certification of operators of water supply systems or wastewater systems
(R.C. 3745.11(O))
Former law established a $25 application fee through November 30, 2003, to take the examination for certification as an operator of a water supply system under the Safe Drinking Water Law or a wastewater system under the Water Pollution Control Law.  Upon approval from the Director that an applicant was eligible to take the examination, the applicant had to pay a fee in accordance with a fee schedule that was in existence through November 30, 2003.  Law revised in part by the act establishes a $45 application fee to take the examination for certification as an operator of a water supply system or a wastewater system beginning December 1, 2003, through November 30, 2006, and a $25 application fee on and after December 1, 2006.  Upon approval from the Director that an applicant is eligible to take the examination, the applicant must pay a fee in accordance with a statutory schedule.  A higher schedule is established through November 30, 2006, and a lower schedule applies on and after December 1, 2006.  The act eliminates the expired application fee and fee schedule, extends the higher application fee discussed above through November 30, 2008, applies the lower application fee beginning December 1, 2008, extends the continuing higher fee schedule through November 30, 2008, and applies the lower fee schedule beginning December 1, 2008.
Application fees under Water Pollution Control Law and Safe Drinking Water Law
(R.C. 3745.11(S))
Law retained in part by the act requires any person applying for a permit, other than an NPDES permit, a variance, or plan approval under the Safe Drinking Water Law or the Water Pollution Control Law to pay a nonrefundable fee of $100 at the time the application is submitted through June 30, 2006, and a nonrefundable fee of $15 if the application is submitted on or after July 1, 2006.  The act extends the $100 fee through June 30, 2008, and applies the $15 fee on and after July 1, 2008.
Similarly, under law retained in part by the act, a person applying for an NPDES permit through June 30, 2006, must pay a nonrefundable fee of $200 at the time of application.  On and after July 1, 2006, the nonrefundable application fee is $15.  The act extends the $200 fee through June 30, 2008, and applies the $15 fee on and after July 1, 2008.
Distribution of federal funding for NPDES program administration
(Section 206.27)
The act provides that on or after the date on which the United States Environmental Protection Agency (USEPA) approves the NPDES program to be administered by the Department of Agriculture under the Concentrated Animal Feeding Facilities Law, the Director of Environmental Protection, the Director of Agriculture, and the Director of Budget and Management must calculate the amount of compensation to be made to OEPA and to the Department of Agriculture from federal moneys disbursed and received for purposes of administering the NPDES program and must calculate the amount of state matching funding that is required for administering that program.  OEPA and the Department of Agriculture may apply separately to USEPA for each agency's respective share of the federal moneys.  If USEPA awards all federal moneys for administration of the NPDES program to one agency, that agency must transfer the appropriate amount of moneys to the other agency in accordance with the calculations of compensation made pursuant to the act.
Section 401 water quality certifications
(R.C. 3745.114, 6111.30, 6111.31, and 6111.32)
Background
Under the Clean Water Act (also known as the Federal Water Pollution Control Act), persons that propose to dredge or fill waters of the state, including wetlands, must apply to the United States Army Corps of Engineers (Army Corps) for a permit under section 404 of that Act.[105]  The permit commonly is referred to as a "section 404 permit."  Generally, a section 404 permit is required before a person may dredge or fill waters of the state, including wetlands.  In addition, the Clean Water Act requires persons to receive a water quality certification under section 401 of the Act from the state that the dredging or filling will not result in a violation of certain water quality standards.  The receipt of the certification from the state is a precondition to the issuance of the section 404 permit issued by the Army Corps.  This certification is commonly referred to as a section 401 water quality certification.  The act defines "section 401 water quality certification" to mean certification pursuant to section 401 of the Clean Water Act and the state Water Pollution Control Law and rules adopted under it that any discharge, as set forth in section 401, will comply with sections 301, 302, 303, 306, and 307 of the Clean Water Act.
The act establishes statutory procedures for the issuance of section 401 water quality certifications for impacts to wetlands, streams, and other waters of the state.  The act's requirements replace rules adopted by the Director of Environmental Protection under the Water Pollution Control Law pertaining to the procedures for the issuance of section 401 water quality certifications.
Application procedures and requirements
Under the act, applications for a section 401 water quality certification must be submitted on forms provided by the Director of Environmental Protection and must include all information required on those forms as well as all of the following:
(1) A copy of a letter from the Army Corps documenting its jurisdiction over the wetlands, streams, or other waters of the state that are the subject of the application;
(2) If the project involves impacts to a wetland, a wetland characterization analysis consistent with the Ohio Rapid Assessment Method;
(3) If the project involves a stream for which a specific aquatic life use designation has not been made, a use attainability analysis;
(4) A specific and detailed mitigation proposal, including the location and proposed legal mechanism for protecting the property in perpetuity;
(5) Applicable fees;
(6) Site photographs;
(7) Adequate documentation confirming that the applicant has requested comments from the Department of Natural Resources and the United States Fish and Wildlife Service regarding threatened and endangered species, including the presence or absence of critical habitat;
(8) Descriptions, schematics, and appropriate economic information concerning the applicant's preferred alternative, nondegradation alternatives, and minimum degradation alternatives for the design and operation of the project;
(9) The applicant's investigation report of the waters of the United States in support of a section 404 permit application concerning the project; and
(10) A copy of the Army Corps' public notice regarding the section 404 permit application concerning the project.
Not later than 15 business days after the receipt of an application for a section 401 water quality certification, the Director must review the application to determine if it is complete and must notify the applicant in writing as to whether the application is complete.  If the Director fails to notify the applicant within 15 business days regarding the completeness of the application, the application is considered complete.  If the Director determines that the application is not complete, the Director must include with the written notification an itemized list of the information or materials that are necessary to complete the application.  If the applicant fails to provide the information or materials within 60 days after the Director's receipt of the application, the Director may return the incomplete application to the applicant and take no further action on the application.  If the application is returned to the applicant because it is incomplete, the Director must return the review fee levied under the act to the applicant, but must retain the application fee (see, "Fees," below).
Not later than 21 days after a determination that an application is complete, the applicant must publish public notice of the Director's receipt of the complete application in a newspaper of general circulation in the county in which the project that is the subject of the application is located.  The public notice must be in a form acceptable to the Director.  The applicant is required to promptly provide the Director with proof of publication.  The applicant may choose, subject to review by and approval of the Director, to include in the public notice an advertisement for an antidegradation public hearing on the application pursuant to requirements in continuing law regarding antidegradation review.  A public comment period of 30 days is required following the publication of the public notice.
Under the act, if the Director determines that there is significant public interest in a public hearing as evidenced by the public comments received concerning the application and by other requests for a public hearing on the application, the Director or the Director's representative must conduct a public hearing concerning the application.  The applicant must publish notice of the public hearing, subject to review and approval by the Director, at least 30 days prior to the date of the hearing in a newspaper of general circulation in the county in which the project that is the subject of the application is to take place.  If a public hearing is requested concerning an application, the Director must accept comments concerning the application until five business days after the public hearing.  Any public hearing must take place not later than 100 days after the application is determined to be complete.
The Director must forward all public comments concerning an application that are received through the public involvement process to the applicant not later than five business days after receipt of the comments by the Director.  The applicant must respond in writing to written comments or to deficiencies identified by the Director during the course of reviewing the application not later than 15 days after receiving or being notified of them.  The Director must issue or deny a section 401 water quality certification not later than 180 days after the complete application for the certification is received.  The Director must provide an applicant for a section 401 water quality certification with an opportunity to review the certification prior to its issuance.
The act requires the Director to maintain an accessible database that includes environmentally beneficial water restoration and protection projects that may serve as potential mitigation projects for projects in the state for which a section 401 water quality certification is required.  A project's inclusion in the database does not constitute an approval of the project.
Use of standards and procedures to evaluate mitigation proposals
Under the act, all substantive wetland, stream, or lake mitigation standards, criteria, scientific methods, processes, or other procedures or policies that are used in a uniform manner by the Director in evaluating the adequacy of a mitigation proposal contained in an application for a section 401 water quality certification must be adopted and reviewed in accordance with the Administrative Procedure Act's rule adoption provisions before those standards, criteria, or scientific methods have the force of law.  Until that time, any such mitigation standards, criteria, scientific methods, processes, or other procedures or policies that are used by or approved for use by the Director to evaluate, measure, or determine the success, approval, or denial of a mitigation proposal, but that have not been subject to review under those provisions of the Administrative Procedure Act cannot be used as the basis for any certification or permit denial or as a standard applied to mitigation unless the applicant has been notified in advance that additional mitigation standards, criteria, scientific methods, processes, or procedures will be considered as part of the review process.
Mitigation requirements

The Governor vetoed provisions that would have established mitigation requirements for wetland or stream impacts for which a section 401 water quality certification was issued.  The requirements varied depending on what type of body of water was being impacted.  For impacts to one acre or less of category 1 or category 2 wetlands, the applicant would have been required to conduct mitigation within the same Army Corps district as the impacts, provided that the mitigation was conducted within that portion of the district that was located within Ohio.  "Category 1 wetland" and "category 2 wetland" would have been defined to mean those categories described in rules adopted under the Water Pollution Control Law and as determined to be a category 1 or category 2 wetland, respectively, through application of the Ohio Rapid Assessment Method (ORAM) for Wetlands version 5.0, including the ORAM version 5.0 quantitative score calibration dated August 15, 2000, unless an application for a section 401 water quality certification was submitted prior to February 28, 2001, in which case the permit applicant could elect to proceed in accordance with the ORAM version 4.1. ORAM is a scoring system used by OEPA to determine into which category a given wetland fits.

For all other wetland or stream impacts, mitigation would have been required to occur in the following preferred order:
(1) Practicable on-site mitigation;
(2) Mitigation within the eight-digit United States Geological Survey watershed or mitigation within the service area of a wetland mitigation bank approved by a mitigation bank team;
(3) Mitigation in an adjacent eight-digit United States Geological Survey watershed;
(4) Mitigation within the same Army Corps district as the impacts, provided that the mitigation was conducted within that portion of the district that was located within Ohio.
As a result of the Governor's veto, mitigation requirements established in rules adopted under the Water Pollution Control Law will continue to apply.
Fees
Under prior law, there was no authority for OEPA to charge fees for the issuance of section 401 water quality certifications.  The act establishes a schedule of fees applicable to section 401 water quality certifications by requiring a person applying for a certification to pay an application fee of $200 at the time of application plus any of the following fees, as applicable:
(1) If the water resource to be impacted is a wetland, a review fee of $500 per acre of wetland to be impacted;
(2) If the water resource to be impacted is a stream, one of the following fees, as applicable:
(a) For an ephemeral stream, a review fee of $5 per linear foot of stream to be impacted, or $200, whichever is greater;
(b) For an intermittent stream, a review fee of $10 per linear foot of stream to be impacted, or $200, whichever is greater;
(c) For a perennial stream, a review fee of $15 per linear foot of stream to be impacted, or $200, whichever is greater.
The act defines "ephemeral stream" to mean a stream that flows only in direct response to precipitation in the immediate watershed or in response to the melting of a cover of snow and ice and that has channel bottom that is always above the local water table.  "Intermittent stream" is defined to mean a stream that is below the local water table and flows for at least a part of each year and that obtains its flow from both surface runoff and ground water discharge.  Finally, "perennial stream" means a stream or a part of a stream that flows continuously during all of the calendar year as a result of ground water discharge or surface water runoff. "Perennial stream" does not include an intermittent stream or an ephemeral stream.
(3) If the water resource to be impacted is a lake, a review fee of $3 per cubic yard of dredged or fill material to be moved.
One-half of all applicable fees levied under the act are due at the time of application for a section 401 water quality certification.  The remainder of the fees must be paid upon the final disposition of the application for a certification.  The total fee paid under the act cannot exceed $25,000 per application.  However, if the applicant is an Ohio county, township, or municipal corporation, the total fee cannot exceed $5,000 per application.  All money collected from the fees must be deposited in the state treasury to the credit of the Surface Water Protection Fund created in continuing law for the purpose of funding OEPA's administration of surface water protection programs.
The act specifies that the new fees do not apply to state agencies or to projects that are authorized by OEPA's general certifications of nationwide permits or general permits issued by the Army Corps.  Further, the act exempts coal mining and reclamation operations from the fees for one year after the act's effective date.
Certification of professionals under Voluntary Action Program Law
(R.C. 3746.04 and 3746.071)
Ongoing law requires the Director of Environmental Protection to adopt rules under the Voluntary Action Program Law that establish standards governing the conduct of certified professionals, criteria and procedures for the certification of professionals to issue no further action letters under that Law, and criteria for the suspension and revocation of those certifications.  Under law retained in part by the act, the issuance, denial, suspension, and revocation of those certifications are subject to the procedures established in the Environmental Protection Agency Law.  Under that Law, such actions must be published in a newspaper of general circulation.  The act specifies that, in lieu of publishing an action regarding a certification in a newspaper of general circulation as required under the Environmental Protection Agency Law, an issuance, denial, renewal, suspension, or revocation must be published on OEPA's web site and in OEPA's weekly review not later than 15 days after the date of the issuance, denial, renewal, suspension, or revocation of the certification and not later than 30 days before a hearing or public meeting concerning the action.  The act adds that certification renewals also must be published.
Continuing law allows the Director to suspend or revoke a certified professional's certification for a violation of or failure to comply with any of several requirements and obligations governing certified professionals established under the Voluntary Action Program Law.  Under prior law, the Director was required to take such action in accordance with the Environmental Protection Agency Law.  The act instead requires the Director to take such action in accordance with rules adopted under the Voluntary Action Program Law.
Clean Diesel School Bus Fund
(R.C. 3704.144)
The act creates the Clean Diesel School Bus Fund in the state treasury consisting of money from gifts, grants, and contributions for the purpose of adding pollution control equipment to diesel-powered school buses, including contributions made pursuant to the settlement of an administrative or civil action brought at the request of the Director of Environmental Protection under the Air Pollution Control Law, the Construction and Demolition Debris Law, the Solid, Infectious, and Hazardous Waste Law, the Safe Drinking Water Law, or the Water Pollution Control Law.  The Director must use money credited to the Fund to make grants to school districts in the state for the purpose of adding pollution control equipment to diesel-powered school buses and to pay OEPA's costs incurred in administering the grant program.  In addition, the Director may use money credited to the Fund to make grants to school districts for the purpose of maintaining pollution control equipment that is installed on diesel-powered school buses and to pay the additional cost incurred by a school district for using ultra-low sulfur diesel fuel instead of diesel fuel for the operation of diesel-powered school buses.
In making grants, the Director must give priority to school districts that are located in a county that is designated as nonattainment by USEPA for the fine particulate national ambient air quality standard under the federal Clean Air Act.  In addition, the Director may give a higher priority to a school district that employs additional measures that reduce air pollution from the district's school bus fleet.
The act requires the Director to adopt rules establishing procedures and requirements that are necessary to implement the grant program, including procedures and requirements governing applications for grants.

eTECH OHIO COMMISSION


Elimination of the Ohio SchoolNet Commission and the Ohio Educational Telecommunications Network Commission and creation of the eTech Ohio Commission
(R.C. 3301.80 (repealed), 3353.01, 3353.02, 3353.03, 3353.04, 3353.06, and 3353.07; conforming changes in R.C. 125.05, 183.28, 3314.074, 3317.06, 3317.50, 3317.51, 3319.22, and 3319.235; Sections 315.09, 315.10, 315.11, and 316.03)
Effective July 1, 2005, the act eliminates both the Ohio SchoolNet Commission and the Ohio Educational Telecommunications Network Commission (ETN Commission) and transfers their duties and authorities, assets, liabilities, and employees to the eTech Ohio Commission (eTech), which the act creates.
Ohio SchoolNet Commission
The Ohio SchoolNet Commission was an independent state agency charged with providing financial assistance and technical services to school districts and community schools in the acquisition and implementation of educational technology.  Responsibilities of the Commission included making grants to districts and schools for the procurement of support services for their educational technology and establishing model professional development programs to assist teachers in integrating technology into their classrooms.  The Commission was made up of 13 members, although it employed an executive director to carry out its duties.
Ohio Educational Telecommunications Network Commission
The ETN Commission was an independent state agency authorized to own and operate transmission and interconnection facilities for an educational television, radio, or radio reading services network; develop and provide programming to noncommercial radio and television stations (for which the Commission could charge fees); and provide financial and technical assistance to educational broadcasting entities throughout Ohio to sustain their operation.  The Commission was made up of the Superintendent of Public Instruction, Chancellor of the Ohio Board of Regents, Director of Administrative Services, and eight members appointed by the Governor.
Merging of functions under the new eTech Ohio Commission
(R.C. 3353.02 and 3353.03; Sections 315.09, 315.10, and 316.03)
The new eTech Ohio Commission is governed by a 13-member body, including four nonvoting legislative members (one from each political party in each chamber).  The voting members include six representatives of the public and the Superintendent of Public Instruction, Chancellor of the Ohio Board of Regents, and the Director of Administrative Services.  Four public members must be appointed to four-year staggered terms by the Governor, with the approval of the Senate.  Two public members, one each selected by the Speaker of the House and the President of the Senate, must be appointed to four-year terms.  Public members are limited to two consecutive four-year terms and may be removed for cause.  Public members receive reimbursement under OBM guidelines for actual and necessary expenses, but do not receive compensation.  The Governor must appoint the chairperson of the Commission from among the voting members.
On July 1, 2005, or as soon as possible thereafter, appointing authorities must appoint the six public members to the eTech Commission and the Governor, with Senate approval, must appoint an interim executive director for the Commission.  The Governor fixes the compensation of the interim director, who has the same powers as a director appointed by the Commission.  The interim director serves until the Commission can appoint a director, but for no longer than one year.[106]
The act requires the Commission to establish advisory groups as needed for individual educational technology issues, including the technology needs of educators, learners, and the public.  Each group must be comprised of representatives of individuals or organizations with an interest in the topic addressed by that group.
The act assigns specific duties to the executive director and explicitly states that the director has "no authority other than that provided by law or delegated" by the Commission.  The statutory duties include (1) direction of employees in administering all Commission programs, (2) providing leadership and support in extending the knowledge of Ohioans by promoting equal access to and use of all forms of educational technology, as directed by the Commission, (3) and providing financial and other assistance to school districts and other educational institutions, noncommercial broadcasting entities, and, if approved by the Commission, other educational technology organizations for the acquisition and utilization of educational technology.
After its creation, the eTech Commission assumes all ongoing business of the former commissions and the rules of the commissions remain in effect until changed by the eTech Commission.
Existing employees of the two abolished agencies must either be transferred to eTech or dismissed effective July 1, 2005.  Employees of the Ohio SchoolNet Commission, who were all in the unclassified service while employed by SchoolNet, remain in the unclassified service following their transfer to eTech.  Therefore, those employees are not subject to the Public Employee Collective Bargaining Law.  ETN Commission employees, however, who were subject to the Collective Bargaining Law while employed by that Commission, continue to be included in their former bargaining units as eTech employees and may collectively bargain with eTech as their public employer.  All eTech employees hired after July 1, 2005, are exempt from the Collective Bargaining Law, even if they fill positions that were formerly part of a bargaining unit.
Changes in duties of the former commissions when transferred to the eTech Ohio Commission
(R.C. 3353.04 and 3353.06)
The act makes changes to some of the former powers and duties of the two abolished commissions when these powers and duties are transferred to eTech, as follows:
(1) Prior law permitted the ETN Commission to utilize fees received from affiliate broadcasting stations for legal fees.  The new eTech Commission does not have that authority.
(2) The act requires the eTech Commission to consult with program participants when establishing guidelines governing purchasing and procurement by those participants, when considering the efficiency of statewide procurement prior to allocating program funding, and when establishing a systems support network.  Such consultation was not required under prior law when performing these duties.
(3) The act allows the eTech Commission to "promote accessibility to educational products aligned with" the academic content standards adopted by the State Board of Education and to ensure that, if recipients of financial assistance from the Commission produce such products, they are appropriately aligned with the standards.[107]
(4) Prior law specifically granted authority for the ETN Commission to determine programs to be distributed through the educational telecommunications network.  The act removes this authority.
(5) Prior law permitted the ETN Commission to own and operate transmission and interconnection facilities.  The act allows the eTech Commission to own or operate such facilities.[108]  (It is not clear whether this is a substantive change.)  In addition, the Commission may enter into agreements with educational broadcasting stations or radio reading services for operation of the interconnection.
(6) The act permits the eTech Commission to consult with providers on the coordination of federal funds for equipment, as opposed to funds for educational broadcasting development, as the ETN Commission could do under prior law.
(7) The act eliminates the ETN Commission's authority to transfer equipment to educational broadcasting stations in exchange for "services."  It also eliminates the ETN Commission's specific authority to enter into agreements with noncommercial providers for the simultaneous broadcasting of identical programs or distribution of the programs by transcription disc, video or audio tapes, or film.  However, the eTech Commission retains the right to execute contracts and agreements to carry out the Commission's duties.
As under prior law for the Ohio SchoolNet Commission, the act specifically exempts the eTech Commission from competitive bidding requirements.
GENERAL ASSEMBLY


Submission of legislative reports via electronic means
(R.C. 101.68(D))
The act provides that, notwithstanding any statutory provision to the contrary, whenever a statute or rule requires a state agency to submit a report, recommendation, or other similar document to the General Assembly or its members, or a chamber of the General Assembly or the chamber's members, in a paper, book, or other hard copy format, the report, recommendation, or other similar document, to the extent technologically feasible, must be submitted through electronic means rather than in the hard copy format.  Furthermore, the agency must display the report, recommendation, or other similar document on a web site it maintains.
DEPARTMENT OF HEALTH


Critical access hospitals
(R.C. 3701.073)
Under federal Medicare law, certain rural hospitals must be designated as critical access hospitals in order to participate in the Medicare Rural Hospital Flexibility Program.  The act requires the Director of Health to designate certain hospitals registered as acute care hospitals with the Department of Health as critical access hospitals if the hospitals meet the following requirements:
(1) Do not have more than 25 acute care and swing beds in use at any time for the furnishing of extended care or acute care inpatient services;
(2) Have a length of stay not more than 96 hours per patient, on an annual average basis;
(3) Provide inpatient, outpatient, emergency, laboratory, radiology, and 24-hour emergency care services;
(4) Have network agreements for patient referral and transfer, a communication system for telemetry systems, electronic sharing of patient data, provision for emergency and non-emergency transportation, and assure credentialing and quality assurance;
(5) Was certified as a critical access hospital by the Centers for Medicare and Medicaid Services between January 1, 2001 and December 31, 2005, or is located in a rural area.[109]
Funding for county tuberculosis control programs and detention costs
(R.C. 339.72, 339.77 (repealed), 339.88, and 3701.146)
County tuberculosis programs
Each board of county commissioners is required to provide for the county to be served by a tuberculosis control unit by designating a county tuberculosis control unit or by entering into an agreement with one or more boards of county commissioners of other counties under which the boards jointly designate a district tuberculosis control unit.  Under prior law, the entity designated the county or district tuberculosis control unit could be (1) a communicable disease control program operated by a local board of health, (2) a tuberculosis clinic established by a board of county commissioners, or (3) a tuberculosis program operated by a county receiving funds the Director of Health makes available for programs the Director determines acceptable.
The act repeals law that required the Director to make financial assistance available for acceptable county tuberculosis programs and eliminates such programs from the entities that may be designated as a county or district tuberculosis control unit.
The law repealed by the act regarding financial assistance for acceptable county tuberculosis programs required the Director of Health to make annual payments to boards of county commissioners on a per-active-case basis.  The annual payment to a county was to equal the funds appropriated for this purpose divided by the number of the county's active cases, as determined by the Director, for which a course of treatment the Director determined was appropriate was completed the previous fiscal year.[110]
Detention of persons with tuberculosis
A person with tuberculosis is subject to public health requirements, including a requirement that the person complete an entire treatment regimen that must include a course of antituberculosis medication.  If the individual fails to take the medication, a county or district tuberculosis control unit must establish a procedure under which the person is required to be witnessed ingesting the medication by individuals the control unit designates.  The control unit has the authority to issue an order compelling a person to comply with the public health requirements and to seek an injunction if the order is violated.  If the person fails to comply with the injunction, the control unit may request that a probate court issue an order granting the control unit the authority to detain the person in a hospital or other place for examination and treatment.  A control unit also has authority to issue an emergency detention order when the unit has reasonable grounds to believe that a person who has, or is suspected of having, tuberculosis poses a substantial danger to the health of other persons.
The act repeals a law that permitted a board of county commissioners to apply to the Director of Health for reimbursement of expenses of detaining indigent persons with tuberculosis and required that the Director reimburse a board for the cost of detaining such indigents.  Total payment could not exceed the amount of funds appropriated for the cost of detention.  Amounts appropriated for detention unexpended by the end of a fiscal year were to be disbursed to boards of county commissioners for tuberculosis programs.
Administration and implementation of the "Choose Life" Fund
(R.C. 3701.65)
Under law recently enacted by Sub. S.B. 156 of the 125th General Assembly, a person may apply to the Registrar of Motor Vehicles for the issuance of "Choose Life" license plates.  For each application for registration and renewal the Registrar receives for these plates, the Registrar must collect a contribution of $20 and transmit it to the Treasurer of State for deposit in the "Choose Life" Fund.  Money in the Fund is to be annually distributed by the Director of Health to any eligible private, nonprofit organization that completes an application form developed by the Director and is selected for funding.
The act requires the Director of Health to adopt rules to implement the "Choose Life" Fund.  It also provides that it is not the General Assembly's intent that the Department of Health create a new position to implement and administer the "Choose Life" Fund but that it use existing personnel.
Certificate of Need moratorium on long-term care beds
(R.C. 3702.141, 3702.51, and 3702.68; Sections 403.23 and 403.24)
Continuing law prohibits building or expanding the capacity of a long-term care facility without a certificate of need (CON) issued by the Director of Health.  The Director is prohibited from accepting an application for a CON to recategorize hospital beds as skilled nursing beds. 
The act continues, until July 1, 2007, a provision scheduled to expire July 1, 2005, prohibiting the Director from accepting for review a CON application for any of the following purposes:
(1) Approval of beds in a new health care facility or an increase in beds in an existing health care facility, if the beds are proposed to be licensed as nursing home beds;
(2) Approval of beds in a new county home or county nursing home, or an increase of beds in an existing county home or county nursing home, if the beds are proposed to be certified as skilled nursing facility beds under Medicare or nursing facility beds under Medicaid;
(3) An increase of hospital beds registered as long-term care beds or skilled nursing facility beds or recategorization of hospital beds that would result in an increase of beds registered as long-term care beds or skilled nursing facility beds.
In the case of (1) and (2), above, the act specifies that a facility is "existing" if it is licensed or has beds registered with the Department of Health as skilled nursing beds or long-term care beds and has provided services for at least 365 consecutive days within the 24-months immediately preceding the date a CON application is filed with the Director.
Continued review of CON applications during the moratorium
During the moratorium under law largely retained by the act, the Director is required to accept for review a CON application for nursing home beds in a health care facility, or skilled nursing facility beds or nursing facility beds in a county home or county nursing home, if the application concerns replacing or relocating existing beds within the same county.  The Director also must accept for review an application seeking CON approval for existing beds located in an infirmary that is operated exclusively by a religious order, provides care exclusively to members of religious orders who take vows of celibacy and live by virtue of their vows within the orders as if related, and was providing care exclusively to members of the religious order on January 1, 1994.
Under the act's continuation of the moratorium, the Director continues to be required to accept for review a CON application for approval of beds in a new facility or an increase in beds in an existing facility, if the proposed increase in beds is attributable solely to a replacement or relocation of existing beds in the same county.  However, in the case of relocation of existing beds, the act specifies that the relocation must be from an existing facility.  As described above, the act specifies that a facility is considered to be existing if it is licensed or has beds registered with the Department of Health as skilled nursing beds or long-term care beds and has provided services for at least 365 consecutive days within the 24-months immediately preceding the date the CON application is filed.
The act prohibits the Director from approving a CON application for addition of long-term care beds to an existing facility by relocation of beds or for the development of a new health care facility by relocation of beds unless all of the following conditions are met:
(1) The existing facility to which the beds are being relocated has no life safety code waivers, no state fire code violations, and no state building code violations;
(2) During the 60-month period preceding the filing of the application, no notice of proposed revocation of the facility's license was issued to the operator of the existing facility to which the beds are being relocated or to any health care facility owned or operated by the applicant or any principal participant in the same corporation or other business;
(3) Neither the existing facility to which the beds are being relocated nor any health care facility owned or operated by the applicant or any principal participant in the same corporation or other business has had a long-standing pattern of violations of the CON law or deficiencies that caused one or more residents physical, emotional, mental or psychosocial harm.
Religious order infirmary beds
The act also continues the requirement that CON applications pertaining to beds in an infirmary operated exclusively by certain religious orders be reviewed.  The act specifies, however, that the applications to be reviewed are those for the conversion of infirmary beds to long-term care beds.
Physician Loan Repayment Program
(R.C. 3702.71)
Under continuing law, physicians providing primary care services in a primary care specialty may participate in the Physician Loan Repayment Program.  Current law defines primary care services as professional comprehensive health services, which may include health education and disease prevention, treatment of uncomplicated health problems, diagnosis of chronic health problems, and overall management of health care services.  Primary care specialties are defined as general internal medicine, pediatrics, obstetrics and gynecology, or family medicine.  Physicians who participate in the program are required to provide primary care services in an underserved area of the state.
The act makes physicians with a specialty in psychiatry eligible to participate in the Physician Loan Repayment Program if the physician intends to provide primary care services in an underserved area. 
J-1 Visa Waiver Program
(R.C. 3702.83)
Federal law requires a foreign-born person who wishes to pursue graduate medical education or training in the United States to obtain a J-1 Exchange Visitor Visa, or J-1 Visa.  The J-1 Visa authorizes the person to enter the United States and remain until he or she has completed the graduate medical education or training, but requires that the person return to his or her home country on completing the education or training and remain there for at least two years before returning to the United States.  This requirement may be waived if the person agrees to serve as a physician for at least three years in an area of the country designated by the United States Secretary of Health and Human Services as a health professional shortage area.
Under the act, the Department of Health must administer, in accordance with the Immigration and Nationality Act, the J-1 Visa Waiver Program to recruit, for the purpose of providing health care services in underserved areas of the state, foreign-born physicians seeking to obtain J-1 Visa waivers.  The Department must accept and review applications for placement of those seeking waivers and, for each application accepted, charge a non-refundable fee of $3,571.  Fees must be deposited with the State Treasurer and credited to the state's general operations fund.
Fee increase for birth certificates, death certificates, and divorce and dissolution of marriage decrees
(R.C. 3705.24 and 3705.242)
The Public Health Council is authorized by continuing law to adopt rules prescribing the fees that may be charged for various services provided by the state office of vital statistics, including fees for copies of birth and death records and fees for divorce and dissolution of marriage filings.  In addition to the fees established by the Public Health Council, other fees may be charged for copies of these records, including fees charged by the local registrar or clerk of court, fees to modernize and automate the vital records system, and fees charged to benefit the Children's Trust Fund.
The act creates new fees for copies of vital records as follows:
(1) $1.50 for each certified copy of a birth certificate, certification of birth, or death certificate;
(2) $5.50 on the filing for a divorce or dissolution of marriage.
The Director of Health, the Director's designee, a local commissioner of health, or a local registrar of vital statistics may collect the fees.  If the fee is collected locally, the local official may retain a portion of the fee to cover administrative costs.
The fees are to be used to fund the Family Violence Prevention Fund, which the act creates.  The act authorizes the Director of Public Safety to use money in the Fund to provide grants to family violence shelters.
Hospice care facility inspection fee
(R.C. 3712.03; Ohio Administrative Code §3701-19-05)
Continuing law requires the Department of Health to inspect hospice care facilities as necessary to determine compliance with the hospice care law and rules adopted under it.  An administrative rule requires the Department to inspect hospice care facilities at the following times:[111]
(1) Prior to issuing a license to operate a hospice care program;
(2) At least once every three years, unannounced;
(3) At any time the Director of Health considers an inspection necessary, including inspections in response to a complaint.
The act authorizes the Public Health Council to adopt rules establishing an inspection fee not to exceed $1,750.
Nursing home and residential care facility licensing fees
(R.C. 3721.02)
The Department of Health licenses and inspects nursing homes and residential care facilities.[112]  The fee for an application and annual renewal licensing and inspection is $105 for each 50 persons in the home or facility's licensed capacity.  The act increases the fee to $170 for each 50 persons in the home or facility's licensed capacity.
Revocation of nursing home and residential care facility licenses
(R.C. 3721.03)
Grounds
Under continuing law, the Director of Health may issue an order revoking a license to operate a nursing home or residential care facility if the person, county home, or district home operating the nursing home or residential care facility has done any of the following:
(1) Violated any provisions of the nursing home law or rules adopted by the Public Health Council;
(2) Violated any order issued by the Director;
(3) Is not, or any of its principals are not suitable, morally or financially, to operate the nursing home or residential care facility;
(4) Is not furnishing humane, kind, and adequate treatment and care.
The act creates an additional ground for revocation.  Under the act, a nursing home or residential care facility that has had a long-standing pattern of violations of the nursing home law or rules adopted under it causing physical, emotional, mental, or psychosocial harm to one or more residents may have its license revoked by order of the Director.
Prohibition on transfer of right to operate
The act provides that once the Director notifies a license holder that the license holder's license to operate a nursing home or residential care facility may be revoked, the license holder may not assign or transfer the right to operate to another person or entity.  This prohibition remains in effect until administrative proceedings under Ohio's Administrative Procedure Act (R.C. Chapter 119.) are complete or until the Director notifies the person, county home, or district home that the prohibition has been lifted.
If a license is revoked, the former license holder is not permitted to assign or transfer or consent to assignment or transfer of the right to operate the home.  Any attempted transfer or assignment to another person or entity is void.
Rejection of license application
(R.C. 3721.07)
Continuing law requires any person seeking to operate a nursing home or residential care facility to apply for a license to the Director of Health.  The Director must issue licenses to qualified applicants.  The Director may not issue licenses to the following individuals or entities:
(1) Applicants who have been convicted of a felony or a crime involving moral turpitude;
(2) Applicants who have violated any rules made by the Public Health Council or any orders issued by the Director.
The act additionally prohibits the Director from issuing licenses to the following individuals or entities:
(1) Any applicant whose license to operate was revoked because of any act or omission that jeopardized a resident's health, welfare, or safety;
(2) Any applicant whose license to operate was revoked because the applicant has a long-standing pattern of violations of nursing home law or rules that caused physical, emotional, mental, or psychosocial harm to one or more residents.
Religious nonmedical health care institutions:  nurse aide training exemption
(R.C. 3721.21)
Under law modified by the act, a nursing home may not use individuals as nurse aides unless they have successfully completed a training and competency evaluation program approved by the Director of Health.  A nurse aide is an individual who provides nursing and nursing-related services to residents in a nursing home, either as a member of the staff or as a volunteer.
The act exempts "religious nonmedical health care institutions" from the nurse aide training requirement.  Specifically, it provides that the term "nurse aide" does not include an individual providing nursing and nursing-related services in a religious nonmedical health care institution, if the individual has been trained in the principles of nonmedical care and is recognized by the institution as being competent in the administration of care within the religious tenets practiced by the institution's residents.
For purposes of these provisions, the act defines a "religious nonmedical health care institution" as an institution that meets or exceeds the conditions to receive Medicare payments for inpatient hospital services or post-hospital extended care services furnished to an individual in such an institution.  Under federal law, a "religious nonmedical health care institution" is defined primarily as an institution that provides only nonmedical nursing items and services exclusively to patients who choose to rely solely on a religious method of healing and for whom the acceptance of medical health services would be inconsistent with their religious beliefs.  In addition, the institution must (1) be tax-exempt, (2) be lawfully operated, (3) provide nonmedical items and services through experienced nonmedical nursing personnel on a 24-hour basis, (4) not be owned by or affiliated with a provider of medical treatment or services, (5) have in effect a utilization plan that meets specified requirements, (6) provide the U.S. Secretary of Health and Human Services with information as required, and (7) meet any other requirements the Secretary establishes.[113]
Elimination of Nursing Facility Regulatory Reform Task Force
(Section 490.06)
The act repeals an uncodified provision of Am. Sub. H.B. 95 of the 125th General Assembly (Section 147) requiring the Director of Health to request approval from the Secretary of the U.S. Department of Health and Human Services to develop an alternative regulatory procedure for nursing facilities.  On receiving approval, the Director was to convene the Nursing Facility Regulatory Reform Task Force.
The Task Force was to review the effectiveness of regulatory procedures regarding the quality of care and quality of life of nursing facility residents, develop recommendations for improvements to the procedures, and evaluate the effect of various changes to nursing home law.  It was to submit a report of its findings to the Speaker and Minority Leader of the House of Representatives and the President and Minority Leader of the Senate.
Adult care facility inspection fees
(R.C. 3722.04)
Under prior law, the owner of an adult care facility[114] was required to pay an inspection fee of $10 per bed to the Director of Health when the facility's license is issued and each time it was renewed.  The owner was required to submit the fee not later than 30 days after the issuance or renewal of a license, other than a temporary license.
Under the act, the owner is required to submit a fee of $20 per bed not later than 30 days after each of the following:
(1) Issuance or renewal of a license, other than a temporary license;
(2) The unannounced inspection of a facility required under the adult care facility law;
(3) Receipt of the report by the adult care facility of any investigation other than the two required under the adult care facility law if the facility was found to be in violation of that law.
Radiation control program fees for health care and radioactive waste facilities
(R.C. 3748.07 and 3748.13)
Continuing law requires the Director of Health to register and inspect sources of radiation.  The act increases registration and inspection fees by approximately 9% as shown in the following chart.

Inspection or registration fee
Prior fee
New fee
Biennial registration
    $200
    $218
First dental x-ray tube
    $118
    $129
Each additional x-ray tube at a location
    $59
    $64
First medical x-ray tube
    $235
    $256
Each additional medical x-ray tube at a location
    $125
    $136
Each unit of ionizing radiation-generating equipment capable of operating at or above 250 kilovoltage peak
    $466
    $508
First nonionizing radiation-generating equipment of any kind
    $235
    $256
Each additional nonionizing radiation-generating equipment at a location
    $125
    $136
Assembler-maintainer inspection
    $291
    $317
Inspection for unlicensed or unregistered facility without pending license or registration
    $363
    $395
Review of shielding plans or the adequacy of shielding
    $583
    $635


Program for Medically Handicapped Children
The Program for Medically Handicapped Children is in the Department of Health and is known as the Bureau for Children with Medical Handicaps (BCMH).  
Removal of exemption for religious beliefs
(R.C. 3701.023)
Continuing law requires applicants for BCMH services to seek payment for medical expenses from all other third-party payers.  This includes applying for Medicaid.  Under prior law, if applying for Medicaid violated the religious beliefs of a medically handicapped child or the parent or guardian of a medically handicapped child, the child, parent, or guardian was not required to apply for Medicaid to receive BCMH services.  The act removes this exemption.
BCMH eligibility
(Section 206.42.13)
A rule changing financial eligibility levels for BCMH went into effect October 13, 2003.  The act requires the Public Health Council to revise the rule not later than December 1, 2005.  As part of the revision, the Council is required to return the eligibility levels for fiscal years 2006 and 2007 to the levels in effect prior to October 13, 2003.
The act also requires the Department of Health, beginning July 1, 2005, to contact all persons who lost eligibility or their parents or guardians to inform them of revisions made to the eligibility rules.
Legislative Committee on the Future Funding of BCMH
(Section 206.42.12)
The act creates the Legislative Committee on the Future Funding of the Bureau for Children with Medical Handicaps.  The Committee is to examine issues involving BCMH operations, services, and funding and make recommendations to the Governor and members of the General Assembly.  The act requires the Committee to do the following:
(1) Examine the current status of the Bureau and recommend best practices to be used in assisting working parents who have children with special health needs;
(2) Review all existing statutes and programs in Ohio pertaining to the Bureau;
(3) Review payment strategies in other states that facilitate adequate care for children with chronic conditions and support their families;
(4) Review all funding sources for the Bureau including funding received from county levies, the state General Revenue Fund and other state-based sources, the federal Maternal and Child Health block grant of Title V of the "Social Security Act";
(5) Request testimony from parents of children with special health needs and the child themselves and from health care professionals and other individuals who provide services to Bureau patients.
Membership.  The Committee is to consist of the following individuals, who are not to be compensated:
(1) Three members of the House of Representatives, appointed by the Speaker of the House of Representatives, not more than two of whom may belong to the same political party as the Speaker;
(2) Three members of the Senate, appointed by the President of the Senate, not more than two of whom may belong to the same political party as the President;
(3) Six members of the general public, three appointed by the Speaker and three by the President, who suffer from a disease or disorder covered by BCMH, or family members of such individuals;
(4) The Director of Health, or the Director's designee;
(5) The Superintendent of Insurance, or the Superintendent's designee;
(6) The Director of Job and Family Services, or the Director's designee;
(7) One person designated by the County Commissioners Association of Ohio;
(8) One person designated by the Ohio Children's Hospital Association;
(9) One person designated by the Ohio Association of Health Plans;
(10) One person designated by the American Academy of Pediatrics;
(11) One person designated by the Ohio Hospital Association;
(12) One person designated by the Ohio Association of Health Commissioners;
(13) One person designated by the Ohio Nurses Association.
Report.  The act requires the Committee to submit a report, not later than December 31, 2006, including an analysis of the current system of services covered by BCMH and determinations and recommendations regarding how the state can best address the current and future needs of patients served by BCMH if necessary.  The Committee is required to submit the report to the Governor, the President and Minority Leader of the Senate, and the Speaker and Minority Leader of the House of Representatives.  The committee is to cease to exist on submitting the report.
Reimbursement of medical liability insurance premiums paid by free clinics
(R.C. 2305.2341)
The act creates the Medical Liability Insurance Program to reimburse "free clinics" for the premiums the clinics pay for medical liability insurance coverage for clinic's staff and volunteer health care professionals and health care workers.  The coverage must be limited only to the diagnostic, treatment, and care activities of the clinic.  The program reimburses the clinics from money appropriated from the General Revenue Fund for 80% of the premiums' costs, up to $20,000.  A free clinic must register with the Department of Health by January 31 of each year in order to participate and obtain reimbursement under the program.  At the time of registration, the clinic must provide to the Department a statement of the number of volunteer and paid health care professionals who provide services at the clinic, a statement of the number of health care services rendered in a year, a signed form acknowledging that the clinic will follow its medical liability insurance policies, and a copy of the medical liability insurance policy.  The act defines "free clinic" to be any non-profit organization exempt from federal income taxation whose primary mission is to provide health care services for free or for a minimal administrative fee.  The act places certain limitations on a clinic if the clinic elects to charge a minimal administrative fee.

OHIO HISTORICAL SOCIETY


Disbursement of funds by Ohio Historical Society
(R.C. 149.30; Section 206.51)
Continuing law authorizes the General Assembly to appropriate money to the Ohio Historical Society to carry out certain public functions.  An appropriation by the General Assembly to the Society constitutes an offer to contract with the Society to carry out those functions for which appropriations are made.  An acceptance by the Society of the appropriated funds constitutes an acceptance by the Society of that offer and is considered an agreement to perform those functions in accordance with the terms of the appropriation and the law and to expend the funds only for the purposes for which they have been appropriated.
Under law unchanged by the act, the Society must faithfully expend and apply all money received from the state to the uses and purposes directed by law and for necessary administrative expenses.  The act specifies that if the General Assembly appropriates money to the Society for grants or subsidies to other entities for site-related programs of the other entities, the Society, except for good cause, must distribute the money within 90 days of accepting a grant or subsidy application for the money.  Additionally, the act prohibits the Society, through June 30, 2007, from charging or retaining an administrative, service, or processing fee for distributing money that is appropriated for grants or subsidies to those entities.
DEPARTMENT OF INSURANCE


School Employees Health Care Board
(R.C. 9.833, 9.90, 9.901, 3311.19, 3313.12, 3313.202, 3313.33, 4117.03, and 4117.08; Section 611.03)
The act creates a new board, the School Employees Health Care Board, to design medical plans to be used by all persons employed by Ohio's public schools.  The Board, in consultation with the Superintendent of Insurance, is required to negotiate with insurers authorized to do business in this state, and in accordance with competitive selection procedures, contract for plans meeting the Board's designs.  Any or all of the plans may be self-insured if the plans are administered by the Board.  For this purpose, a "public school" means a school in a city, local, exempted village, or joint vocational school district, and the educational service centers associated with those schools.  The act's requirement for public school employees to use Board medical plans and the act's grant of administrative authority to the Board, including the authority to solicit bids for coverage from private companies and to contract for services with state agencies other than the Department of Administrative Services, do not take effect unless and until the General Assembly enacts legislation at a future date to confirm these provisions and order their implementation.
The Board consists of nine members, including individuals with experience with public school benefit programs, health care industry providers, and medical plan beneficiaries.  The Governor, the Speaker of the House of Representatives, and the President of the Senate each are to appoint three members within 45 days after the section's effective date.  Board members may not be employed by, represent, or otherwise be affiliated with any private entity providing services to the Board, employers, or employees.  The act also creates an advisory committee serving under the Board.
The act provides that members of the School Employees Health Care Board are to serve four-year terms.  It contains fairly common provisions governing staggered initial appointments, service until successor is appointed, filling of vacancies, uncompensated service of Board members and reimbursement for actual and necessary expenses, the initial meeting called by the Governor, election of a chairperson, minimum meetings (4) per year, and notice of meeting, applicability of the Open Meetings and Public Records Laws, what constitutes a quorum, and removal of a member for misconduct.
The School Employees Health Care Board must:  (1) design multiple medical plans to provide an optimal combination of coverage, cost, choice, and stability, (2) include both state and regional preferred provider plans, (3) set goals for the employer and employee contributions to the premium cost, in order to encourage use of the plans, (4) set employee co-payments, deductibles, exclusions, limitations, formularies, and other responsibilities, (5) utilize cost-containment measures, and (6) annually create and distribute to the Governor, the Speaker of the House of Representatives, and the President of the Senate, a report covering the plan's background, coverage options, plan administration and operations, employee and employer contribution rates, the relationship between the rates and the School Employees Health Care Fund's balance, alternative employee and employer cost-sharing strategies, an evaluation of the effectiveness of cost-saving programs and efforts to control and manage member eligibility, and on efforts to prevent and detect fraud and to manage and monitor Board contracts.  Prior to the release of the Board's initial medical plans, the Board must contract with an independent consultant for an analysis of the costs of existing school district medical plans and the methods those plans use to control costs.  The consultant must submit written recommendations to the Board concerning the establishment of regional plans and the use of alternative medical plans, the use of stop-loss insurance, mandatory and optional medical coverage, the development of systems to obtain eligibility data and data compiled under federal law, and for the transition from district medical plans to Board plans, must report on the experience of states with similar medical plans and the potential impact and risks of Board medical plans, and must submit any legislative recommendations by December 31, 2005, to the Board, the Governor, the Speaker of the House of Representatives, and the President of the Senate.
School districts offering employee health care benefits through consortiums of two or more districts, or consortiums of one or more districts and one or more political subdivisions or their agencies or instrumentalities, covering 5,000 or more employees as of January 1, 2005, may request permission from the School Employees Health Care Board to continue the use of the plans.  The Board is required to grant its initial or continued approval based on an actuarial evaluation of the consortium's existing plan offerings, if the evaluation determines the consortium plans' benefits and costs are equivalent to or better than the Board's plans.  Initial approval is for one year; approval each year thereafter requires annual re-application to and approval by the Board.  The Board is to be given access to all relevant information prior to making its decision.  Once a school district chooses to offer the Board's plans the district is thereafter prohibited from offering the consortium's plans.  Members of a school district's board of education may obtain coverage under the plans, but are required to pay all of the premiums for that coverage if they elect to participate.
The act authorizes the School Employees Health Care Board to contract with other state agencies as necessary to implement and operate the Board's medical plans, and requires it to contract with the Department of Administrative Services for central services until the Board is able to obtain the services from other sources.  The Board must reimburse the Department of Administrative Services for those services.  The Board's administrative duties include maintaining funds in the School Employees Health Care Fund (below) to provide for the long-term stability and solvency of the plans designed by the Board, to provide appropriate health care information and preventative care programs, and to coordinate contracts for services related to the Board's medical plans.  A school district's board of education is responsible for distributing detailed information about the Board's plans to the district's employees a minimum of 90 days prior to the start of employee coverage.  The provisions outlined in this paragraph, with the exception of those pertaining to the Board's work with the Department of Administrative Services, are not effective unless and until the General Assembly enacts subsequent legislation confirming the provisions and ordering their implementation.
The act also creates the School Employees Health Care Fund in the state treasury.  Contingent upon future legislative action by the General Assembly, participating schools will pay all employer and employee premiums for Board-designed plans to the School Employees Health Care Board for deposit into this fund.  Money in the Fund only may be used for the provision of medical benefits to public school employees and related expenses.  The state is not liable for any obligations of the Fund or the Board, or for expenses of public schools and school districts related to Board medical plans.
School district employees may continue to bargain collectively with regard to medical benefits, however, after the act takes effect, those benefits must be obtained through the Board-designed medical plans.  The employees may choose from any of the plans agreed to during collective bargaining.  Employees may agree during collective bargaining to pay a higher percentage of the premium than would otherwise be required under the Board plan.  A collective bargaining agreement may allow employees to contribute a lesser percentage of the premium than set by the Board if the district remains in compliance with the Board's aggregate goals.
The act also requires the Department of Administrative Services to report to the Governor, the Speaker of the House of Representatives, and the President of the Senate within 18 months after the act's effective date on the feasibility of setting up a similar program for public institutions of higher education.
Medicaid health insuring corporations to post performance bond
(R.C. 1751.03, 1751.271, 3903.14, 3903.42, and 3903.421)
The act requires each health insuring corporation providing coverage to Medicaid recipients to post a performance bond in the amount of $3 million, as security to fulfill the health insuring corporation's obligations to its contracted providers for covered services rendered to Medicaid recipients in the event of liquidation or rehabilitation proceedings.  The bond is payable to the Department of Insurance in the event that the health insuring corporation is placed in rehabilitation or liquidation proceedings.  In lieu of a performance bond, the act permits a Medicaid health insuring corporation to deposit securities that are acceptable to the Superintendent of Insurance in the amount of $3 million, with the Superintendent; the health insuring corporation is entitled to the interest on these securities as long as the health insuring corporation remains solvent.  The bond or securities become a special deposit upon the start of the delinquency proceedings and are subject to distribution under the Insurer's Supervision, Rehabilitation, and Liquidation Law.
The act requires that the performance bond be issued by a surety company licensed with the Department.  The bond or deposit, or any replacement bond or deposit, must be in a form acceptable to the Superintendent and must remain in effect for the duration of the health insuring corporation's license and thereafter until all claims against the Medicaid health insuring corporation have been paid in full.  Documentation of the bond must be filed with the Superintendent prior to the issuance of a Medicaid health insuring corporation's certificate of authority.  Annually thereafter, 30 days prior to the renewal of the health insuring corporation's certificate of authority, health insuring corporations must furnish the Superintendent with evidence that the required bond remains in effect.
Under the act, a rehabilitation plan for a Medicaid health insuring corporation may include the use of the proceeds of the performance bond or securities first to pay the claims of the health insuring corporation's contracted providers for services rendered.  Contracted providers with claims against the health insuring corporation are given first priority under the act against the proceeds of the bond or securities, to the exclusion of other creditors.  If the amount of the proceeds are not sufficient to satisfy all of the allowed claims of contracted providers for services rendered to Medicaid recipients, the contracted providers are to share in the proceeds pro rata, then any unpaid balance of contracted providers' claims are to be allowed for payment from the general assets of the estate consistent with the priorities as listed in the Law.  If the amount of the proceeds exceeds the allowed claims of the contracted providers for services rendered to Medicaid recipients, however, the excess amount becomes a general asset of the health insuring corporation's estate, to be distributed to other claimants pursuant to the listed priorities.
Certificate of authority to establish or operate a health insuring corporation
(R.C. 1751.04 and 1751.05)
The act excepts health insuring corporations (HMOs) that cover solely Medicaid recipients from a provision of continuing law that requires the Director of Health to review all HMO applications and accompanying documents and make findings as to whether the applicant for a certificate of authority has fulfilled certain requirements with respect to any basic health care services and supplemental health care services to be furnished by the applicant.  Under continuing law, the Superintendent of Insurance generally has 45 days to issue or deny a certificate of authority to establish or operate an HMO.  The act, however, lengthens this time to 135 days for an HMO that covers solely Medicaid recipients. 
Prompt payment requirements for health insuring corporations covering Medicaid recipients
(R.C. 3901.3814 and 5101.93)
Under prior law, health insuring corporation plans providing coverage to Medicaid recipients were exempt from statutes that would otherwise have required them to comply with prompt payment laws applicable to other health insuring corporation plans.  The act eliminates the general exclusion.
The act requires the Department of Job and Family Services to determine whether a waiver of federal Medicaid requirements is necessary to apply the prompt payment laws to health insuring corporation plans covering Medicaid recipients.  If a waiver is necessary, the Director of Job and Family Services is required to apply to the U.S. Secretary of Health and Human Services for the waiver.
If the Director determines a waiver is unnecessary or receives approval of the waiver, the Department is required to notify the Department of Insurance so that the prompt payment requirements can be applied to health insuring corporation Medicaid plans.  The act provides that implementation must be effective 18 months after the Department of Insurance receives notice from the Department of Job and Family Services.
The act also requires the Department of Job and Family Services to give notice to each health insurance corporation providing coverage to Medicaid recipients of the applicability of the prompt payment requirements and their implementation date, at the time that the Department notifies the Department of Insurance.
Additional moneys for the Department of Insurance Operating Fund and fee increases
(R.C. 3901.021 and 3905.40)
Under prior law, three-fourths of the fees collected for issuing certificates of compliance and copies of those certificates, along with other types of fees, was credited to the Department of Insurance Operating Fund.  The remaining one-fourth was credited to the General Revenue Fund.
The act requires seven-tenths of the fees collected for issuing certificates of compliance and copies of those certificates, filing each "statement," and issuing each certificate of authority or license and copies of those certificates or licenses be credited to the Operating Fund.  The act requires the remaining three-tenths be credited to the General Revenue Fund.  The act also requires other revenues collected by the Superintendent, such as registration fees for seminars or conferences and grants from private entities, be credited to the Operating Fund.
The act increases the fees for all of the following:
(1) For filing each "statement," from $25 to $175;
(2) For issuing each certificate of authority or license, from $5 to $175;
(3) For issuing certificates of compliance or certified copies of the certificates, from $20 to $60.
The act eliminates the law's former requirement that a foreign insurance company doing business in the state pay for forwarding interest checks and coupons accruing upon bonds and securities.
Exemption for "employer insureds" from the unauthorized foreign insurance tax
(R.C. 3901.17 and 3905.36)
Law largely unchanged by the act imposes a tax on out-of-state insurers and other persons engaged in the business of insurance that are not authorized to do business in Ohio, if the insurer, its affiliate, or agent takes any of a number of listed actions in Ohio, by mail or otherwise any of which are considered to be the conduct of an insurance business in Ohio and subject the party taking the action to Ohio jurisdiction to the extent permitted by the state and federal constitutions.  This tax, however, has several exemptions.  One exemption was for contracts of insurance issued to an "employer insured," defined as an insured with at least 25 full-time employees and annual aggregate insurance premiums of at least $25,000, that procures insurance by the use of a full-time employee acting as an insurance manager or buyer or by the use of a continuously qualified insurance consultant.  The act ends this exemption.
Additionally ongoing Insurance Law requires an Ohio insured that obtains insurance providing coverage in Ohio from an unauthorized foreign insurer, annually to return a statement, under oath, to the Superintendent of Insurance, providing specified information on the insurance coverage and on premiums and other consideration paid for the insurance in the preceding 12 months and to pay a 5% tax on premiums.  Under prior law, insureds were not required to report or pay tax on insurance obtained from surplus lines brokers or issued to employer insureds.  The act ends these exemptions, but adds an exemption for professional and medical liability insurance procured by a hospital licensed by the Department of Health.
Exemption for professional or medical liability insurance from the unauthorized foreign insurance tax
(R.C. 3905.36)
As explained above under "Exemption for "employer insureds" from the unauthorized foreign insurance tax," continuing law imposes a 5% tax on insurance premiums collected by all out-of-state insurers and other persons engaged in the business of insurance that are not authorized to conduct business in Ohio.  The act adds an exemption from this tax for professional or medical liability insurance procured by hospitals organized under Ohio law.  The act does not define professional or medical liability insurance.
Insurer's notification to Superintendent of Insurance concerning out-of-state discipline
(R.C. 3901.41)
Under prior law, a licensed insurance company or certified health insuring corporation was required to notify the Superintendent of Insurance within 30 days after being disciplined in another state in one of the following manners:  (1) suspension or revocation of the right to transact business in the state, (2) receipt of an order to show cause why the insurer's license should not be suspended or revoked, or (3) penalized for violating the insurance laws of the state.  If the Superintendent had knowledge that an insurer failed to provide the above notice, the Superintendent was authorized to order a hearing and require the insurer to show cause why the Superintendent should not suspend or revoke the insurer's right to transact business in this state or impose a monetary fine.  The act eliminates the above provisions.
Certificates of compliance for authorized foreign insurers
(R.C. 3901.78; R.C. 3901.781, 3901.782, 3901.783, and 3901.784 (repealed))
Under prior law, each insurance company authorized to do business in this state but not incorporated under the laws of this state was required to publish its annual certificate of compliance, which was issued by the Superintendent of Insurance.  The insurance company or an association of insurers was required to publish the certificate in a newspaper of general circulation in each county where the company or association had an agency.  The act eliminates the publication requirement and the requirement that the Superintendent issue annual certificates of compliance to these foreign insurers.  The Superintendent may continue to issue certificates of compliance upon request or in any other circumstance the Superintendent determines to be appropriate.
Captive insurers exemption--tax on the unauthorized conduct of the business of insurance
(R.C. 3901.17 and 3905.36)
Continuing law levies a 5% tax on all premiums, fees, assessments, dues, and other consideration received by insurers, associations, and companies engaged, directly or indirectly, in the unauthorized conduct of the business of insurance in Ohio.  The law does not apply to specified transactions and forms of insurance, but its application to transactions involving policies issued by a captive insurer was unclear.  The act specifies that the law does not apply to transactions involving policies issued by captive insurers.  Captive insurers are defined by the act as insurers owned and operated by one or more individuals, organizations, groups, or associations exclusively to self-insure risks of one or more affiliates of the parent organizations or individual owners or affiliates thereof, or the members of a group or association and its affiliates, and foreign insurers, licensed and operated in accordance with the captive insurance laws of their jurisdiction of domicile.
DEPARTMENT OF JOB AND FAMILY SERVICES
I. General II. Workforce Development III. Child Care IV. Child Support Enforcement V. Child Welfare and Adoption VI. Title IV-A Temporary Assistance for Needy Families VII. Medicaid VIII. Hospital Care Assurance Program IX. Disability Medical Assistance X. Title XX Social Services XI. Food Stamp Program

I. General
Support Services Federal Operating Fund
(R.C. 5101.07)
The act creates the Support Services Federal Operating Fund.  If appropriate for the Fund, as determined by the Director of Job and Family Services, moneys received from the federal government are to be deposited into the Fund.  The act requires that money in the Fund be used to pay the federal share of the Ohio Department of Job and Family Services' (ODJFS) costs for computer projects and operating costs of the parts of ODJFS that provide general support services for ODJFS work units.
Support Services State Operating Fund
(R.C. 5101.071)
The act creates the Support Services State Operating Fund.  The Fund is to consist of payments made to it from other appropriation items by intrastate transfer voucher.  The act requires that money in the Fund be used for ODJFS's costs for computer projects and the operating costs of the parts of ODJFS that provide general support services for ODJFS work units.
Consolidated funding allocations
(R.C. 5101.21)
Continuing law permits ODJFS to enter into one or more written fiscal agreements with boards of county commissioners under which financial assistance is awarded for duties of county family services agencies (county departments of job and family services, child support enforcement agencies, and public children services agencies) included in the agreements.
The act eliminates a requirement that a fiscal agreement include a board of county commissioner's assurance that, if ODJFS establishes a consolidated funding allocation for two or more duties of a county family services agency included in the fiscal agreement, the board will require the agency to use funds available in the consolidated funding allocation only for the purpose for which the funds is appropriated.  The act also eliminates ODJFS's authority to adopt rules governing the establishment of consolidated funding allocations.
Increase in county share of public assistance
(R.C. 5101.16 and 5101.163)
Continuing law requires that each board of county commissioners pay a percentage of the costs of certain public assistance programs, including Ohio Works First[115] and Medicaid.  However, the amount that a board of county commissioners must pay for a state fiscal year cannot exceed 110% of the county's share for such costs for the immediately preceding state fiscal year.
The act permits ODJFS to increase a county's share of public assistance costs if the United States Secretary of Health and Human Services requires an increase in the state's maintenance of effort for the TANF block grant because of one or more failures, resulting from the actions or inactions of one or more county family services agencies,[116] to meet a federal TANF requirement.  ODJFS is permitted to increase a county's share of public assistance costs only to the amount the county's county family services agencies are responsible for the increase in the state's maintenance of effort as determined pursuant to rules ODJFS is to adopt.  The increase may cause a county's share of public assistance costs to exceed the 110% limit.
In requiring a county to increase its share of public assistance costs, ODJFS is not required to follow law unchanged by the act that governs ODJFS's disciplinary actions against such agencies.  That law requires ODJFS to provide counties notice and an opportunity for a hearing.
Recovery of excess payments made to county family services agencies
(R.C. 5101.244)
The act provides that, if a county department of job and family services, public children services agency, or child support enforcement agency submits an expenditure report to ODJFS and ODJFS subsequently determines that an allocation, advance, or reimbursement the department makes to the agency, or a cash draw the agency makes exceeds the allowable amount for the expenditure, ODJFS may adjust, offset, withhold, or reduce an allocation, cash draw, advance, reimbursement, or other financial assistance to the agency as necessary to recover the amount of the excess payment.  ODJFS may take the action without following law that governs ODJFS's disciplinary actions against such agencies.
Eligibility for certain ODJFS-administered programs
(R.C. 5101.47)
Under continuing law, the Director of ODJFS may accept applications, determine eligibility, and perform related administrative functions for Medicaid, the Children's Health Insurance Program parts I and II, publicly funded child day-care, and other programs the Director determines are supportive of children or families with at least one employed member.  The act specifically authorizes the Director to re-determine eligibility also.  In addition, the act permits the Director to perform these functions for additional programs:  the Food Stamp program and other programs the Director determines will achieve administrative cost saving and efficiency through ODJFS's performance of those functions.  The act alters the law related to supportive programs, providing that the Director may perform any of the functions described above with regard to programs that support children, adults, or families, and eliminates the requirement that the families have at least one employed member.
The act creates an exception to the authority that the Director otherwise has as discussed above.  The Director may not conduct face-to-face interviews for a program discussed above if federal law requires a face-to-face interview to complete an eligibility determination for the program.
Study on disability determinations
(Section 206.66.46)
ODJFS, the Rehabilitation Services Commission, county departments of job and family services, and other state and local government entities actively engaged in providing programs or services for which disability is an eligibility requirement are required by the act to conduct a study that considers all of the following:
(1) The feasibility of an interagency agreement among the state and local government entities whereby one of the entities performs disability determinations for the programs and services;
(2) Which of the state and local government entities should perform the disability determinations;
(3) Potential cost savings and other advantages, as well as potential disadvantages, that might result from the interagency agreement;
(4) Processes by which the interagency agreement could be implemented, including an estimate of the approximate time needed to implement it.
The act requires that a written report of the study be prepared not later than six months after the effective date of this provision of the act.  The report is to be submitted to the Speaker and Minority Leader of the House of Representatives and President and Minority Leader of the Senate.
Statistics on frequently dispensed drugs under the Ohio's Best Rx Program
(R.C. 5110.39)
Prior law required ODJFS, by April 1, 2005, to create a list of the 25 drugs most often dispensed to Ohio's Best Rx Program participants under the Program and to determine the average percentage savings Program participants receive for each of these 25 drugs.  The percentage savings is to be calculated by comparing the average amount that terminal distributors charge Program participants for each of the drugs, on a date selected by ODJFS, to the average of the terminal distributors' usual and customary charge for each of the drugs on that date.  The act requires ODJFS to calculate the prices annually no later than March 1 of each year.
Temporary civil service authority of the Director of Job and Family Services
(Section 569.06)
Overview
Among the various responsibilities of the Director of Administrative Services is the performance of certain duties under the Civil Service Law.  Specifically, the Law requires the Director to carry out a variety of civil service-related functions with regard to officers and employees in the classified civil service of the state, including, but not limited to, ODJFS officers and employees.
Changes made by the act
Under the act, for the period beginning on July 1, 2005, and ending on June 30, 2007 (FY 2006 and FY 2007), the Director of ODJFS is granted the authority to perform certain civil service-related functions with regard to employees of and positions in ODJFS that are in the classified civil service--which functions are normally the responsibility of the Director of Administrative Services.  Specifically, during this period, the Director of ODJFS may do the following notwithstanding any contrary provision of the Civil Service Law: The act provides that any actions taken by the Director pursuant to this temporary grant of authority that relate to ODJFS exempt employees who are in the classified civil service and are subject to 5 C.F.R. 900.603 must be consistent with the requirements of that federal law.[118]  Furthermore, if an ODJFS exempt employee who is in the classified civil service and paid in accordance with Salary Schedule E-1 (the salary schedule that includes steps within its pay ranges) is to be assigned, reassigned, classified, reclassified, transferred, reduced, or demoted to a position in a lower job classification by the Director of ODJFS under the temporary grant of authority, the Director of ODJFS, or in the case of a transfer of the employee outside ODJFS, the Director of Administrative Services, must assign the exempt employee to the appropriate job classification and place him or her in pay step X (an amount of pay that does not fit into the pay steps established in Salary Schedule E-1).  Such an employee must not receive an increase in compensation until the maximum rate of pay for that classification exceeds the employee's compensation.
Finally, the act provides that actions taken by the Director of ODJFS pursuant to the temporary grant of authority are not subject to appeal to the State Personnel Board of Review.
II. Workforce Development
Compliance with workforce development agreements
(R.C. 5101.241)
Local areas receive financial assistance from ODJFS to undertake workforce development activities.  Ongoing law permits ODJFS to take action against local officials to enforce compliance with workforce development agreements, including, but not limited to, initiating mandamus actions to compel compliance, imposing fines, and withholding funding.  The act also allows ODJFS to issue a notice of intent to revoke approval of all or part of a local development plan effected that conflicts with state or federal law and then to effect the revocation.
Ongoing law also permits a party to request an administrative review of an action proposed to enforce the party's compliance with a workforce development agreement.  Currently, depending upon the proposed action, the party may have 15 or 30 days to request an administrative review.  If ODJFS receives a timely request, ODJFS is required to postpone taking its action for 15 or 30 days so that ODJFS and the party have an informal opportunity to resolve the dispute.  If the informal opportunity fails to resolve the dispute, the Director appoints an administrative review panel to conduct a formal review.  The act modifies the dispute resolution process by removing the time requirements for the process and allowing the parties to develop a written resolution to the dispute at any time prior to submitting the written report described in the paragraph below.  Thus, the formal review of the dispute and the informal dispute resolution process may occur at the same time.
Currently, at the conclusion of its review, the administrative review panel submits a report and recommendations for action to the Director.  The Director may modify or reject the recommendations, but must give the reasons therefor.  The act eliminates the requirement for the Director to state the reasons for a modification or rejection of the panel's recommendations.  The Director's final action is binding and the act provides the action is not subject to review; current law states only that the action is not subject to further "Departmental" review.
In addition to the disciplinary actions taken by the Director against local workforce development boards, the act specifies in statute that the Governor, as stated in federal law, may decertify a local workforce development board for any of the following reasons in accordance with division (e) of section 117 of the "Workforce Investment Act of 1998" 112 Stat. 936, 29 U.S.C. 2801, as amended ("WIA"):
(1) Fraud or abuse;
(2) Failure to carry out the requirements of WIA, including failure to meet performance standards established by the federal government for two consecutive years.
Under the act, if the Governor finds that access to basic WIA services is not being provided in a local area, the Governor may declare an emergency and in consultation with the chief elected officials of the local area affected, arrange for provision of these services through an alternative entity during the time period in which resolution of the problem preventing service delivery in the local area is pending.  The act specifies that an action taken by the Governor as described above is not subject to the appeals process provided in continuing law.
III. Child Care
Publicly funded child care reimbursement ceilings and market rate survey
(Section 206.67.13)
The act requires ODJFS to increase the reimbursement ceilings for providers of publicly funded child care, in fiscal years 2006 and 2007.  The reimbursement ceiling must be raised to 65% of the market's usual and customary cost to the public based on the most recently conducted market rate survey.
The act also requires ODJFS to estimate the monthly average of children that it expects to enroll in publicly funded child care from December of 2005 to March of 2006.  ODJFS must later determine the actual number of children enrolled in publicly funded child care for that period.  If the monthly estimate exceeds the actual enrollment numbers by at least 2,000 children, ODJFS is permitted to increase reimbursement for publicly funded child care in FY 2007.  The reimbursement ceiling may be raised to not more than 70% of the usual and customary cost to the public based on the most recent federally required market rate survey.
The act also requires ODJFS to conduct a study of market rates for the provision of child care in order to establish new rates for publicly funded child care.  ODJFS must have new rates for publicly funded child care established by July 1, 2006.  The act requires all child care providers to participate in the study.
IV. Child Support Enforcement
Lump sum payments sent to the Office of Child Support
(R.C. 3121.12)
Under continuing law modified by the act, on receiving notice that a lump sum payment of $150 or more is to be paid to an obligor (the person who is obliged to pay child support under a child support order), the court or child support enforcement agency, as applicable, is required to do either of the following:
(1) If the obligor is in default under the support order or has any arrearages under the support order, issue an order requiring transmittal of the lump sum payment to the Office of Child Support in ODJFS;
(2) If the obligor is not in default under the support order and does not have any arrearages under the support order, issue an order directing the person who gave the notice to immediately pay the full amount of the lump sum to the obligor.
On receipt of the moneys, the Office of Child Support is required to pay the amount of the lump sum payment that is necessary to discharge all of the obligor's arrearages to the obligee and, within two business days after its receipt of the money, any amount that is remaining after the payment of the arrearages to the obligor.  However, federal law and regulations generally require that any amounts collected be treated first as payment on the required child support obligation for the month in which the amount was collected.  If any amounts collected are in excess of that obligation, the excess amounts must be treated as payments on arrearages.  (42 U.S.C. 657(a) and 45 C.F.R. 302.51(a)(1).)  The Ohio Administrative Code similarly requires payment received to be applied to current obligations before being applied to arrearages (O.A.C. 5101:1-31-14).
The act makes two changes.  First, if the court or child support enforcement agency determines that the obligor is in default under the support order or has any arrearages under the support order, the act authorizes the court or agency to issue an order requiring the transmittal of the portion of the lump sum payment sufficient to pay the arrearage in full.  Second, the act replaces the provision requiring the Office of Child Support to apply the payment to the arrearage and then transmit any remaining moneys to the obligor with a provision that requires the Office to distribute whatever portion of the lump sum it receives in accordance with administrative rules.
Electronic disbursement of child support
(R.C. 3121.50)
The act permits the Office of Child Support to distribute child support amounts by means of electronic disbursement, rather than by check or warrant, unless otherwise prohibited from doing so by state or federal law.  The act also requires the person receiving the child support to accept payment by electronic means.  The Director of ODJFS may adopt or amend rules under the Administrative Procedure Act (R.C. Chapter 119.) to assist in the implementation of this provision.
Child support operating fund
(R.C. 3125.191)
The act creates in the state treasury the Child Support Operating Fund as a state special revenue fund.  ODJFS may deposit into the Fund a portion of the federal incentives related to the federal Child Support Enforcement laws contained in Title IV-D of the Social Security Act that ODJFS receives from the United States Department of Health and Human Services.  ODJFS may use money in the Fund for program and administrative purposes associated with its State Child Support Enforcement Program.
Retention of federal incentives for child support enforcement programs
(Sections 206.66.91 and 206.66.92)
The act allows ODJFS to retain $1.5 million of federal incentives given for successful implementation of child support enforcement programs.  This money is to reimburse the state for its share of payments made for mandatory contracts used by county child support enforcement agencies (CSEAs) in child support enforcement.  The act also authorizes ODJFS to retain a portion of those same federal incentives for the state's share of monthly optional contracts used by county CSEAs.  The amount retained by ODJFS is dependent on actual usage of the optional contracts by each county CSEA.
V. Child Welfare and Adoption
Summary of minor adoption proceedings
(R.C. 2151.416 and 3107.10)
The act repeals provisions that require courts to send monthly summaries regarding minor adoption proceedings to ODJFS and require ODJFS to annually report on the assembled results compiled from these summaries.
Under prior law, at the conclusion of each adoption proceeding, the court had to prepare a summary of the proceeding, and each month send copies of the preceding month's summaries to ODJFS.  The summary was required to contain the following:
(1) A notation of the nature and approximate value or amount of anything paid in connection with the proceeding and indicating the category to which any payment relates;
(2) If the court had not issued a decree because the final accounting in the case had not been filed, a notation of that fact and a statement of the reason for refusing to issue the decree, related to the financial data summarized under clause (1);
(3) If the adoption was arranged by an attorney, a notation of that fact.
Prior law prohibited the summary from identifying any person by name, but it could contain additional narrative material that the court considered useful to an analysis of the summary.
Prior law also required ODJFS to annually report to the public and to the General Assembly on the results of these summaries, including a compilation and analysis of data submitted in the summaries.
The act repeals these provisions.
VI. Title IV-A Temporary Assistance for Needy Families
Title IV-A of the Social Security Act authorizes the TANF block grant.  States may receive federal funds under the TANF block grant to operate programs designed to meet one or more of the following purposes:
(1) Provide assistance to needy families so that children may be cared for in their own homes or in the homes of relatives;
(2) End the dependence of needy parents on government benefits by promoting job preparation, work, and marriage;
(3) Prevent and reduce the incidence of out-of-wedlock pregnancies and establish annual numerical goals for preventing and reducing the incidence of these pregnancies;
(4) Encourage the formation and maintenance of two-parent families.
Persons who receive assistance funded in part with federal TANF funds are subject to a number of federal requirements, including time limits and work requirements.  Federal regulations define "assistance" as including cash, payments, vouchers, and other forms of benefits designed to meet a family's ongoing basic needs for such things as food, clothing, shelter, utilities, household goods, personal care items, and general incidental expenses.  It includes such benefits even when they are provided in the form of payments to individual recipients and conditioned on participation in work experience, community service, or other work activities provided by federal TANF law.  Unless specifically excluded, "assistance" also includes supportive services such as transportation and child care provided to unemployed families.  All of the following are excluded from the definition of "assistance":
(1) Nonrecurrent, short-term benefits that are designed to deal with a specific crisis situation or episode of need, are not intended to meet recurrent or ongoing needs, and will not extend beyond four months;
(2) Work subsidies such as payments to employers or third parties to help cover the costs of employee wages, benefits, supervision, and training;
(3) Supportive services such as child care and transportation provided to employed families;
(4) Refundable earned income tax credits;
(5) Contributions to, and distributions from, Individual Development Accounts;
(6) Services such as counseling, case management, peer support, child care information and referral, transitional services, job retention, job advancement, and other employment-related services that do not provide basic income support;
(7) Transportation benefits provided under a Job Access or Reverse Commute project to an individual who is not otherwise receiving assistance.[119]
ODJFS is required to prepare and submit to the United States Department of Health and Human Services a state plan to receive federal funds under the TANF block grant.  The state plan must provide for the following TANF programs:  (1) Ohio Works First (OWF), (2) Prevention, Retention, and Contingency (PRC), (3) other TANF programs established by the General Assembly or an executive order issued by the Governor that are administered or supervised by ODJFS, and (4) components of OWF, PRC, and other ODJFS administered or supervised TANF programs that the state plan identifies as components.
Participants of OWF receive TANF-funded assistance and are therefore subject to the federal TANF requirements such as time limits and work requirements.  State law governing PRC permits programs to provide benefits and services that are excluded from the definition of assistance in the federal TANF regulations.  State law requires that other TANF programs also provide benefits and services that are excluded from the federal definition of assistance unless the state law or executive order establishing the programs provides otherwise.
New TANF programs
The act creates three new TANF programs:  the Employment Retention Incentive Program, the Title IV-A Demonstration Program, and the Kinship Permanency Incentive Program.
Employment Retention Incentive Program
(Section 206.67.10)
The act permits ODJFS to establish and administer the Employment Retention Incentive Program under which ODJFS provides cash payments to eligible assistance groups.  The program may be created in fiscal year 2007.
If ODJFS establishes the program, the program's cash payments must be provided in a manner that enables them to be excluded from the definition of assistance in federal TANF regulations and instead be benefits that the federal regulations exclude from the definition of assistance.  Each county department of job and family services is required to make eligibility determinations for the program and perform other administrative duties in accordance with rules that the act requires ODJFS to adopt.
To be eligible for the program, an assistance group must meet all of the following requirements in accordance with rules ODJFS must adopt:
(1) The assistance group must apply in accordance with the application process established by the rules and using an application that contains all of the information required by the rules;
(2) The assistance group must have ceased to participate in OWF;
(3) The assistance group must include a member who was employed during the last month the assistance group participated in OWF;
(4) That member of the assistance group must remain employed;
(5) The assistance group must meet all other eligibility requirements established in the rules.
In addition to the rules discussed above, the act requires that ODJFS adopt rules establishing (1) the application process for the program, including the process to verify eligibility for the program, (2) the amounts that eligible assistance groups are to receive as cash payments under the program, and (3) the frequency and duration that eligible assistance groups are to receive cash payments under the program.  The Governor vetoed a provision that would have provided that the rules establishing the application process could not require that applications be submitted to county departments of job and family services.
Title IV-A Demonstration Program
(R.C. 5101.80, 5101.801, and 5101.803)
The act creates the Title IV-A Demonstration Program to provide funding for innovative and promising prevention and intervention projects that meet one or more of the four purposes of the TANF block grant and are for individuals with specific and multiple barriers to achieving or maintaining self sufficiency and personal responsibility.  ODJFS is permitted to provide funding for such projects to government entities and, to the extent permitted by federal law, private, not-for-profit entities with which ODJFS enters into agreements.  ODJFS must begin to implement the Program no later than January 1, 2006.  But, the Program is subject to continuing law that authorizes ODJFS to terminate or reduce funding for a TANF program on determining that funds are insufficient.
ODJFS is permitted to solicit proposals for entities seeking to enter into an agreement with ODJFS for the purpose of receiving funding under the Title IV-A Demonstration Program.  ODJFS is to solicit the proposals in accordance with criteria ODJFS develops.  ODJFS may enter into such agreements with an entity that meets the proposal's criteria and, if the entity's proposed project does not potentially affect persons in each county of the state, provides ODJFS evidence that the entity has notified the county department of job and family services of each county where persons may be affected by the project.[120]  In developing the criteria, soliciting the proposals, and entering into the agreements, ODJFS must comply with all applicable federal and state laws, the Title IV-A state plan, amendments to the state plan, and federal waivers the United States Secretary of Health and Human Services grants.
Continuing law specifies a number of provisions that must be included in an interagency agreement between ODJFS and a state agency concerning the state agency's administration of a TANF program or component.  The act requires that an agreement between ODJFS and a government or private, not-for-profit entity regarding a project under the Title IV-A Demonstration Program also include the provisions.  For example, the agreement must include a complete description of the benefits and services that are to be provided and the methods of administration.  The act also requires that such agreements include provisions for determining the expected performance outcomes and an evaluation to determine the success in achieving the performance outcomes.
A government entity or private, not-for-profit entity that receives funding to administer a project under the Title IV-A Demonstration Program is subject to requirements continuing law establishes for county family services agencies[121] and state agencies that administer other TANF programs under the supervision of ODJFS.  For example, the government and private, not-for-profit entities are prohibited from establishing a policy governing a project that is inconsistent with a policy the Director of ODJFS establishes.  ODJFS must prescribe forms for applications, certificates, reports, records, and accounts of the entities and require reports and information from the entities as may be necessary or advisable regarding the program.
Continuing law provides that an authorized representative of ODJFS or a county family services agency or state agency administering a TANF program must have access to all records and information bearing thereon for the purposes of investigations.  The act provides that an authorized representative of a government entity or private, not-for-profit entity administering a project funded in whole or in part with funds provided under the Title IV-A Demonstration Program must have access to all records and information bearing on the project for the purpose of investigations.
Continuing law establishes a process for individuals to appeal a decision of a state or local government entity administering a public assistance program.  Under this process, the individual may have a state hearing with ODJFS.  That decision may be appealed to the Director of ODJFS or the Director's designee and ultimately to a court of common pleas.  ODJFS is permitted to adopt rules establishing a different appeals process for certain TANF programs.  The act provides that the rules may establish a different appeals process for the Title IV-A Demonstration Program.
Kinship Permanency Incentive Program
(R.C. 3125.18, 5101.802, 5101.35, 5101.80, 5101.801, and 5153.16; Section 206. 67.08)
The act creates the Kinship Permanency Incentive Program.  Under the Program an initial one-time incentive payment is to be given to a kinship caregiver[122] to defray the costs of initial placement of the minor child in the kinship caregiver's home.  The Program may provide additional permanency incentive payments for the minor child at six-month intervals for a total period not to exceed 36 months.  The public children services agency in each county is to make all initial and ongoing eligibility determinations for the Program under the supervision of ODJFS.  The Director of ODJFS must begin to implement the Program no later than January 1, 2006.  However, the Director may terminate or reduce funding for the Program if the Director determines that federal or state funds are insufficient to fund the Program and the Director of Budget and Management approves the termination or reduction.
A kinship caregiver may participate in the Program if all of the following requirements are met:
(1) The kinship caregiver applies to a public children services agency;
(2) The child the kinship caregiver is caring for is a child with special needs as determined under existing ODJFS rules;[123]
(3) A juvenile court has adjudicated that the child is an abused, neglected, dependent, or unruly child and determined that it is in the child's best interest to be in the legal custody of the kinship caregiver or the probate court has determined that it is in the child's best interest to be in the guardianship of the kinship caregiver;
(4) The kinship caregiver is either the child's legal custodian or legal guardian;
(5) The child resides with the kinship caregiver pursuant to a placement approval process to be established in ODJFS rules;
(6) The gross income of the kinship caregiver's family does not exceed 200% of the federal poverty guidelines for a family of the same size.
Rulemaking
The act requires the Director of ODJFS to adopt rules establishing the following:
(1) The application process for the Program;
(2) The placement approval process through which a child is placed with a kinship caregiver;
(3) The initial and ongoing eligibility determination process for the Program;
(4) The amount of the incentive payments provided under the Program;
(5) The method by which the payments are provided to a kinship caregiver;
(6) Anything else the Director considers necessary.
Reports
The act requires ODJFS to prepare reports concerning both of the following:
(1) Stability and permanency outcomes for children for whom incentive payments are made under the Kinship Permanency Incentive Program;
(2) The total amount of payments made under the Program, patterns of expenditures made per child under the Program, and cost savings realized through the Program from placement with kinship caregivers rather than other out-of-home placements.
ODJFS must submit a report to the Governor, the Speaker and Minority Leader of the House of Representatives, and the President and Minority Leader of the Senate not later than December 31, 2008, and December 31, 2010.
Ohio Works First
The act revises state law governing OWF.[124]
Gross income eligibility requirement
(R.C. 5107.10)
There are a number of eligibility requirements that an assistance group must meet to qualify to participate in OWF.  One of the requirements is an income eligibility requirement.  The income eligibility requirement has two steps.  The act modifies the first step.
Under prior law, an assistance group's gross monthly income, less amounts disregarded, could not exceed an amount specified in state law.  For example, an assistance group with three members could not have gross monthly income, less amounts disregarded, exceeding $630.  The act eliminates the specific dollar amounts and provides instead that an assistance group's gross monthly income, less amounts disregarded, cannot exceed the higher of (1) 50% of the federal poverty guidelines or (2) the dollar amount specified in the prior state law.[125]  The annual revisions that the United States Department of Health and Human Services makes to the federal poverty guidelines are to be applied starting on the first day of each July.
LEAP Program
(R.C. 5107.05, 5107.30, and 5107.301)
The Learning, Earning, and Parenting (LEAP) Program is a component of OWF under which participating teens[126] must attend an educational program that is designed to lead to the attainment of a high school diploma or its equivalent.  ODJFS is required to provide an incentive payment to teens who satisfy the LEAP Program's education requirements and reduce a teen's OWF cash assistance payment for failure or refusal, without good cause, to meet the requirements.
The act authorizes ODJFS to provide, in addition to the incentive payment, other incentives to teens who satisfy the LEAP Program's education requirements.  The act requires that the Director of ODJFS adopt rules establishing the LEAP Program's incentives.
The Director is authorized by the act to provide an award to individuals who successfully complete the LEAP Program's requirements and enroll in post-secondary education.  If provided, the award is to be provided in accordance with rules the Director is authorized to adopt.  The rules may specify the form that the award is to take and the requirements for receiving it.
VII. Medicaid
Medicaid is a health-care program for low-income children and families and for aged, blind, and disabled persons.  The program is funded with federal, state, and county funds and was established by Congress in 1965 as Title XIX of the Social Security Act.  Federal Medicaid law requires states participating in Medicaid to cover certain groups of persons and types of benefits and gives states options for covering other groups of persons and types of benefits.  ODJFS is responsible for the administration of Medicaid.  ODJFS, however, contracts with other entities to perform certain administrative functions.
Medicaid eligibility reduction
(R.C. 5111.019; Section 206.66.39)
The act requires ODJFS to submit an amendment to the state Medicaid plan to the United States Secretary of Health and Human Services to reduce the amount of income an individual may have to qualify for Medicaid as a parent of a child under age 19.  The reduction is from 100% to 90% of the federal poverty guidelines.  ODJFS must submit the amendment not later than 90 days after the date the act is signed by the Governor and filed with the Secretary of State.  The reduction is to be implemented not later than the date the amendment is approved.
The act maintains the other eligibility requirements for parents.  The parent must reside with his or her child, must not otherwise qualify for Medicaid, and must satisfy all other relevant eligibility requirements.  The act also maintains the limitation that a parent's eligibility is limited to two years.
Aged, Blind, and Disabled Medicaid eligibility--the home as a countable resource
(R.C. 5111.011)
Ohio law requires the Director of ODJFS to adopt rules establishing eligibility requirements for Medicaid.[127]  Accordingly, the Director has adopted rules that specify that an aged, blind, or disabled individual may qualify for Medicaid if the individual, among other requirements, meets certain financial criteria.[128]  The financial criteria that are considered are income and "countable resources."[129]  Countable resources are cash, personal property, and real property that an individual or spouse has an ownership interest in, has the legal ability to access in order to convert to cash, and is not legally prohibited from using for support and maintenance.[130]
The administrative rules provide that a home, or "homestead," is not a countable resource if it is the applicant's or recipient's principal place of residence.[131]  However, a home becomes a countable resource if the applicant or recipient resides in a medical institution for six months or longer and does not have a spouse or certain relatives that live in the home.[132]
The act places in the Revised Code the administrative rule that specifies when a home becomes a countable resource for purposes of determining an aged, blind, or disabled individual's eligibility for Medicaid, but modifies it by extending to 13 months (from six months) the period of time during which the home is not a countable resource.  The act maintains the exclusion in administrative rules that applies when a spouse or qualified relative, as explained above, resides in the home.
Medicaid look-back period
(R.C. 5111.011)
Federal law requires that states' Medicaid programs provide that institutionalized individuals and, at a state's option, noninstitutionalized individuals are ineligible for certain services for a period of time if the individual or individual's spouse disposes of assets for less than fair market value on or after the look-back date.  For an institutionalized individual, the look-back date is a date that is a certain number of months before the first date that the individual is both an institutionalized individual and has applied for Medicaid.  For a noninstitutionalized individual, the look-back date is a date that is a certain number of months before the date the individual applies for Medicaid or, if later, the date on which the individual disposes of assets for less than fair market value.  The number of months used for the look-back depends on whether the assets are part of a trust.  If the assets are not part of a trust, the number of months is 36 (three years).  If the assets are part of a trust, the number of months is 60 (five years).
The act requires that ODJFS apply to the United States Secretary of Health and Human Services for a federal Medicaid waiver as necessary to make the number of months used for the look-back period be 60 regardless of whether the assets are part of a trust.  If the waiver is not approved, the look-back period is to be the number of months specified in the federal law discussed above.
Medicaid eligibility fraud
(R.C. 2307.65 and 2913.401)
Criminal offense
(R.C. 2913.401)
The act creates the offense of Medicaid eligibility fraud.  It prohibits a person from knowingly doing any of the following in an application for Medicaid benefits or in a document that requires a disclosure of assets for the purpose of determining eligibility to receive Medicaid benefits:
(1) Making or causing to be made a false or misleading statement;
(2) Concealing an interest in property;
(3) Except as provided in paragraph (4), failing to disclose a transfer of property that occurred within 36 months before submission of the application or document;
(4) Failing to disclose a transfer of property that occurred within 60 months before submission of the application or document and was made to an irrevocable trust a portion of which is not distributable to the applicant for Medicaid benefits or the recipient of Medicaid benefits or to a revocable trust.
Under the act, Medicaid eligibility fraud is a misdemeanor of the first degree if the value of the Medicaid benefits paid as a result of the violation is under $500.  If the value is $500 or more and less than $5,000, the offense is a felony of the fifth degree.  If the value is $5,000 or more and less than $100,000, the offense is a felony of the fourth degree.  If the value is $100,000 or more, the offense is a felony of the third degree.
In addition to imposing a sentence, the court must order a person who is guilty of Medicaid eligibility fraud to make restitution in the full amount of any Medicaid benefits paid on behalf of an applicant for or recipient of Medicaid benefits for which the applicant or recipient was not eligible plus interest at the rate applicable to judgments on unreimbursed amounts from the date on which the benefits were paid to the date on which restitution is made.  The act requires that amounts recovered as restitution and interest on those amounts be credited to the state General Revenue Fund and that any applicable federal share be returned to the appropriate federal agency or department.
The act states that the remedies and penalties it provides are not exclusive and do not preclude the use of any other criminal or civil remedy for any act that is in violation of the section prohibiting Medicaid eligibility fraud.  The act also declares that the section does not apply to a person who fully disclosed in an application for Medicaid benefits or in a document that requires a disclosure of assets for the purpose of determining eligibility to receive Medicaid benefits all of the interests in property of the applicant for or recipient of Medicaid benefits, all transfers of property by the applicant for or recipient of Medicaid benefits, and the circumstances of all those transfers.
The act defines "Medicaid benefits" as benefits under the medical assistance program established under R.C. Chapter 5111. and defines "property" as any real or personal property or other asset in which a person has any legal title or interest.
Civil action
(R.C. 2307.65)
The act authorizes the Attorney General to bring a civil action in the Franklin County Court of Common Pleas on ODJFS's behalf, and the prosecuting attorney of the county in which Medicaid eligibility fraud occurs to bring a civil action in the court of common pleas of that county on behalf of the county department of job and family services, against a person who commits Medicaid eligibility fraud for the recovery of the amount of benefits paid on behalf of a person that either department would not have paid but for the violation minus any amounts paid in restitution under the act (R.C. 2913.401) and for reasonable attorney's fees and all other fees and costs of litigation.
In a civil action authorized by the act, if the defendant failed to disclose a transfer of property in violation of R.C. 2913.401, the court may also grant any of the following relief to the extent permitted by the relevant federal statute (42 U.S.C. 1396p):
(1) Avoidance of the transfer of property that was not disclosed to extent of the amount of benefits ODJFS or the county department would not have paid but for the violation;
(2) An order of attachment or garnishment against the property;
(3) An injunction against any further disposition by the transferor or  transferee, or both, of the property the transfer of which was not disclosed or against the disposition of other property by the transferor or transferee;
(4) Appointment of a receiver to take charge of the property transferred or of other property of the transferee;
(5) Any other relief that the court considers just and equitable.
The act authorizes ODJFS or the county department, to the extent permitted by 42 U.S.C. 1396p, to enforce a judgment obtained in a civil action for Medicaid eligibility fraud by levying on property the transfer of which was not disclosed in violation of R.C. 2913.401 or on the proceeds of the transfer of that property.
The act states that the foregoing remedies do not apply if the person to whom the property was transferred acquired the property in good faith and for fair market value.  The act also provides that the remedies are not exclusive and do not preclude the use of any other criminal or civil remedy for any act that is in violation of R.C. 2913.401.  Amounts of Medicaid benefits recovered in a civil action brought under the act must be credited to the state General Revenue Fund, and any applicable federal share must be returned to the appropriate federal agency or department.
Medicaid Estate Recovery Program
Overview
Medicaid estate recovery is a federal requirement that states seek from the estates of certain deceased Medicaid recipients the cost of certain correctly paid Medicaid benefits.  Federal law gives states some discretion in how to define "estate" for the purposes of Medicaid estate recovery systems.  A state may limit recovery to assets included in an individual's probate estate or permit recovery against any real or personal property or other assets in which the individual had any legal title or interest at the time of death, to the extent of the interest.  (42 U.S.C. 1396p(b)(4).)  Prior to the act, Ohio limited recovery to the assets included in the Medicaid recipient's probate estate.  The act expands Ohio's Medicaid Estate Recovery Program to permit recovery against any real or personal property or other assets in which the individual had any legal title or interest at the time of death, to the extent of the interest.  The act also amends the Medicaid Estate Recovery Program law to make it more closely parallel federal law.
Generally
(R.C. 5111.11)
Prior law.  For the purpose of recovering the cost of services correctly paid under Medicaid to a recipient age 55 or older, ODJFS had to institute an estate recovery program against the property and estates of Medicaid recipients to recover Medicaid correctly paid on their behalf to the extent that federal law and regulations permitted the implementation of a program of that nature.  ODJFS was required to seek to recover Medicaid correctly paid only after the recipient and the recipient's surviving spouse, if any, had died and only at a time when the recipient had no surviving child who was under age 21 or blind or permanently and totally disabled.
ODJFS was permitted to enter into a contract with any individual or private entity under which the individual or private entity administered the estate recovery program on ODJFS's behalf or performed any of the functions required to carry out the program.  The contract could provide for the individual or private entity to be compensated from the property recovered from the estates of Medicaid recipients or could provide for another manner of compensation agreed to by the individual or private entity and ODJFS.  Regardless of whether it was administered by ODJFS or an individual or private entity under contract with ODJFS, the program had to be administered in accordance with applicable requirements of federal law and regulations and state law and rules.
The act.  The act requires ODJFS to institute a Medicaid Estate Recovery Program "to the extent permitted by federal law."  It also expands the definition of "estate" from which recovery may be made.  Under the program, ODJFS is required to generally do both of the following:
(1) For the costs of services the Medicaid program correctly pays or will pay on behalf of a permanently institutionalized individual[133] of any age, seek adjustment or recovery from the individual's estate or on the sale of property of the individual or spouse that is subject to a Medicaid estate recovery lien;