As Passed by the Senate 1
122nd General Assembly 4
Regular Session Sub. H. B. No. 412 5
1997-1998 6
REPRESENTATIVES CATES-PRINGLE-CLANCY-TERWILLEGER-O'BRIEN-MOTTLEY- 8
TIBERI-GARCIA-CORBIN-OLMAN-COLONNA-JACOBSON-FOX-HARRIS- 9
OGG-BRADING-GARDNER-PERZ-PADGETT-BUCHY-LUCAS-THOMAS- 10
BATCHELDER-MYERS-HOTTINGER-CAREY-JONES-GRENDELL-VERICH- 11
VESPER-WINKLER-BRADY-KREBS-JOHNSON-WACHTMANN-WILLIAMS-SALERNO 12
SENATORS CUPP-KEARNS-DRAKE-WATTS-GILLMOR-FINAN 13
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A B I L L
To amend sections 3313.94, 3316.03, 3316.07, 16
3319.17, 5705.29, 5705.38, 5705.391, and 17
5705.412; to enact sections 3301.85, 3313.484, 18
3315.17, 3315.18, 3316.042, 3316.20, and
3319.225; and to repeal section 133.301 of the 19
Revised Code and Section 50.51 of Am. Sub. H.B. 20
215 of the 122nd General Assembly relative to 21
school district fiscal accountability. 22
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO: 24
Section 1. That sections 3313.94, 3316.03, 3316.07, 26
3319.17, 5705.29, 5705.38, 5705.391, and 5705.412 be amended and 28
sections 3301.85, 3313.484, 3315.17, 3315.18, 3316.042, 3316.20, 29
and 3319.225 of the Revised Code be enacted to read as follows: 30
Sec. 3301.85. (A)(1) THERE IS HEREBY CREATED THE 32
GOVERNING COUNCIL OF THE OFFICE OF EDUCATION ACCOUNTABILITY AND 34
PRODUCTIVITY CONSISTING OF EIGHT VOTING MEMBERS. OF THE EIGHT 35
MEMBERS, FOUR SHALL BE MEMBERS OF THE GENERAL ASSEMBLY APPOINTED 36
AS FOLLOWS: ONE SHALL BE APPOINTED BY THE SPEAKER OF THE HOUSE 37
OF REPRESENTATIVES; ONE SHALL BE APPOINTED BY THE MINORITY LEADER 38
OF THE HOUSE OF REPRESENTATIVES; ONE SHALL BE APPOINTED BY THE 39
PRESIDENT OF THE SENATE; AND ONE SHALL BE APPOINTED BY THE 40
2
MINORITY LEADER OF THE SENATE. THE STATE SUPERINTENDENT OF 41
PUBLIC INSTRUCTION OR A DESIGNEE OF THE SUPERINTENDENT, THE 42
DIRECTOR OF BUDGET AND MANAGEMENT OR A DESIGNEE OF THE DIRECTOR, 44
THE CHAIRPERSON OF THE HOUSE EDUCATION COMMITTEE, AND THE
CHAIRPERSON OF THE SENATE EDUCATION COMMITTEE SHALL SERVE AS EX 47
OFFICIO MEMBERS. THE DIRECTOR OF BUDGET AND MANAGEMENT SHALL BE 49
CHAIRPERSON OF THE COUNCIL UNLESS THE COUNCIL ELECTS A DIFFERENT
MEMBER TO BE CHAIRPERSON. 50
LEGISLATIVE MEMBERS SHALL SERVE FOR THE REMAINDER OF THE 52
SESSION IN WHICH THEY ARE APPOINTED UNLESS REMOVED BY THE 53
APPOINTING AUTHORITY. SUCH MEMBERS MAY BE REAPPOINTED. ANY 55
APPOINTED MEMBER WHO CEASES TO BE A MEMBER OF THE LEGISLATIVE 56
HOUSE FROM WHICH THE MEMBER WAS APPOINTED SHALL CEASE TO BE A 57
MEMBER OF THE COUNCIL. VACANCIES AMONG APPOINTED MEMBERS SHALL 58
BE FILLED IN THE MANNER PROVIDED FOR ORIGINAL APPOINTMENTS. 59
SECTIONS 101.82 TO 101.84 OF THE REVISED CODE SHALL NOT APPLY TO 61
THE GOVERNING COUNCIL.
(2) THE GOVERNING COUNCIL SHALL MONITOR AND OVERSEE THE 63
OPERATIONS AND DUTIES OF THE OFFICE OF EDUCATION ACCOUNTABILITY 64
AND PRODUCTIVITY ESTABLISHED UNDER DIVISION (B) OF THIS SECTION. 66
IN ADDITION, THE GOVERNING COUNCIL MAY DEVELOP AND ISSUE POLICIES 67
TO GUIDE THE OFFICE OF EDUCATION ACCOUNTABILITY AND PRODUCTIVITY 69
IN IMPLEMENTING ITS DUTIES. 70
(B) THE OFFICE OF EDUCATION ACCOUNTABILITY AND 73
PRODUCTIVITY IS HEREBY ESTABLISHED TO PROVIDE OVERSIGHT OVER 74
COLLECTION AND ANALYSIS OF SCHOOL DISTRICT EDUCATION PERFORMANCE 75
AND FISCAL DATA. THE OFFICE SHALL BE UNDER THE SUPERVISION OF A 77
DIRECTOR WHO SHALL BE APPOINTED AND MAY BE REMOVED BY THE
DIRECTOR OF BUDGET AND MANAGEMENT. THE DIRECTOR OF THE OFFICE OF 80
EDUCATION ACCOUNTABILITY AND PRODUCTIVITY SHALL DIRECT THE OFFICE 81
IN THE ADMINISTRATION OF ALL ITS DUTIES. THE DUTIES OF THE 82
OFFICE OF EDUCATION ACCOUNTABILITY AND PRODUCTIVITY SHALL INCLUDE 83
ALL OF THE FOLLOWING: 84
(1) ISSUE ANNUAL REPORT CARDS FOR EACH SCHOOL DISTRICT AND 87
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FOR THE STATE AS A WHOLE BASED ON EDUCATION AND FISCAL
PERFORMANCE DATA; 88
(2) DEVELOP PROCEDURES, INCLUDING PROCEDURES TO ENSURE 90
COMPLIANCE, TO GUARANTEE THAT THE DATA AND INFORMATION REPORTED 91
BY EACH SCHOOL DISTRICT PURSUANT TO SECTION 5705.391 AND DIVISION 93
(F) OF SECTION 3301.0714 OF THE REVISED CODE AND FOR ALL OTHER 94
PURPOSES OF STATE LAW ARE ACCURATE AND RELIABLE; 95
(3) ASSIST THE DEPARTMENT OF EDUCATION IN DEVELOPING AND 97
SPECIFYING STANDARDS FOR THE UTILIZATION OF HARDWARE AND SOFTWARE 99
FOR THE OPERATION OF THE EDUCATION MANAGEMENT INFORMATION SYSTEM 100
PURSUANT TO SECTION 3301.0714 OF THE REVISED CODE TO ENSURE THAT 101
THE REPORTED DATA CAN BE ANALYZED WITH MAXIMUM UTILITY AND 102
FLEXIBILITY; 103
(4) UTILIZE DATA TO ESTABLISH BENCHMARKS FOR CURRENT STATE 105
AND SCHOOL DISTRICT ACADEMIC AND OPERATIONAL PERFORMANCE LEVELS, 106
COMPARE THESE LEVELS TO THOSE IN OTHER STATES, AND MEASURE 107
IMPROVEMENT IN THE STATE'S OVERALL PUBLIC EDUCATION SYSTEM AND 108
ITS STATUS VERSUS OTHER STATES OVER TIME;
(5) MONITOR THE IMPLEMENTATION OF SIGNIFICANT EDUCATION 110
LEGISLATION AND REPORT ON THE STATE'S PROGRESS TOWARD ACHIEVING 111
THE GOALS OF THE LEGISLATION;
(6) OBJECTIVELY ANALYZE, ORGANIZE, AND AT LEAST ANNUALLY 113
REPORT TO THE GENERAL ASSEMBLY, GOVERNOR, STATE BOARD OF 114
EDUCATION, AND STATE SUPERINTENDENT OF PUBLIC INSTRUCTION 115
REGARDING THE ACADEMIC AND FISCAL PERFORMANCE DATA OF EACH SCHOOL 117
DISTRICT.
(C) THE OFFICE MAY CONTRACT WITH ANY PERSON OR 119
GOVERNMENTAL ENTITY TO SELECTIVELY EXAMINE EDUCATIONAL PROGRAMS, 120
DELIVERY MECHANISMS, AND SCHOOL DISTRICT OPERATIONS TO FACILITATE 121
IMPROVED PERFORMANCE, ACCOUNTABILITY, AND PRODUCTIVITY. THE 122
OFFICE MAY EVALUATE OR CONTRACT FOR A STUDY OF OTHER SIGNIFICANT 123
COMPONENTS OF THE PUBLIC EDUCATION SYSTEM AND MAY MAKE 124
RECOMMENDATIONS BASED ON THE EVALUATIONS OR STUDIES. 125
Sec. 3313.484. NO LOAN SHALL BE APPROVED UNDER SECTIONS 127
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3313.483 TO 3313.4811 OF THE REVISED CODE AFTER MARCH 1, 1998. 128
Sec. 3313.94. The board of education of each school 137
district shall issue an annual report of school progress for each 138
school under its control and for the district according to 139
guidelines established by the state board of education. The 140
reports shall contain a ten-year projection of its enrollment, by 141
year and by grade level; FINANCIAL REPORTING PURSUANT TO THE 142
REQUIREMENTS OF DIVISION (B) OF SECTION 3301.07 OF THE REVISED 143
CODE; the names, addresses, and home telephone numbers of the 145
members of the state board of education, the Ohio house of 146
representatives, and the Ohio senate elected from districts 147
within which the school district has territory; and information 148
about the achievements, problems, plans, and improvements in the 149
school district. The guidelines shall be developed in 150
consultation with representatives of the education profession, 151
local boards of education, and other residents of the state and 152
shall require some information common to all schools and school 153
districts, permit reporting of information particular to each 154
school and district, and permit schools and school districts to 155
take maximum advantage of reports already required by their board 156
of education and other governmental units. The reports shall be 157
provided upon request to members of the local community of each 158
school and district and shall be made in formats useful for 159
parents and residents of the district. The board of education of 160
each school district shall make the local community aware of the 161
availability of the report. However, nothing in this section 162
shall be construed to require any school board to expend funds on 163
advertisements about the reports or on mass mailings as a means 164
of distributing the reports to the local community.
Sec. 3315.17. (A) THE BOARD OF EDUCATION OF EACH CITY, 167
EXEMPTED VILLAGE, LOCAL, AND JOINT VOCATIONAL SCHOOL DISTRICT 168
SHALL ESTABLISH A TEXTBOOK AND INSTRUCTIONAL MATERIALS FUND AND 169
SHALL DEPOSIT INTO THAT FUND FOUR PER CENT, OR ANOTHER PERCENTAGE 170
IF ESTABLISHED IN RULES ADOPTED UNDER DIVISION (B) OF THIS 172
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SECTION, OF ALL REVENUES RECEIVED BY THE DISTRICT FOR OPERATING 173
EXPENSES. MONEY IN THE FUND SHALL BE USED SOLELY FOR TEXTBOOKS, 174
INSTRUCTIONAL SOFTWARE, AND INSTRUCTIONAL MATERIALS, SUPPLIES, 175
AND EQUIPMENT. ANY MONEY IN THE FUND THAT IS NOT USED IN ANY 176
FISCAL YEAR SHALL CARRY FORWARD TO THE NEXT FISCAL YEAR. 177
(B) THE STATE SUPERINTENDENT OF PUBLIC INSTRUCTION AND THE 180
AUDITOR OF STATE JOINTLY SHALL ADOPT RULES IN ACCORDANCE WITH 182
CHAPTER 119. OF THE REVISED CODE DEFINING WHAT CONSTITUTES 183
TEXTBOOKS, INSTRUCTIONAL SOFTWARE, AND INSTRUCTIONAL MATERIALS, 184
SUPPLIES, AND EQUIPMENT FOR WHICH MONEY IN A SCHOOL DISTRICT'S 185
TEXTBOOK AND INSTRUCTIONAL MATERIALS FUND MAY BE USED. THE 186
JOINTLY ADOPTED RULES ALSO MAY DESIGNATE A PERCENTAGE, OTHER THAN 188
FOUR PER CENT, OF DISTRICT OPERATING REVENUES THAT MUST BE
DEPOSITED INTO THE FUND. THE AUDITOR OF STATE SHALL ADOPT RULES 190
UNDER SECTION 117.20 OF THE REVISED CODE AUTHORIZING UP TO A 192
THREE-YEAR PHASE-IN PERIOD FOR DISTRICT BOARDS TO MEET THE
PERCENTAGE REQUIREMENTS OF DIVISION (A) OF THIS SECTION. 194
(C) NOTWITHSTANDING DIVISION (A) OF THIS SECTION, A 197
DISTRICT BOARD OF EDUCATION IN ANY FISCAL YEAR MAY APPROPRIATE 198
MONEY IN THE DISTRICT TEXTBOOK AND INSTRUCTIONAL MATERIALS FUND 199
FOR PURPOSES OTHER THAN THOSE PERMITTED BY THAT DIVISION IF BOTH 200
OF THE FOLLOWING OCCUR DURING THAT FISCAL YEAR: 201
(1) ALL OF THE FOLLOWING CERTIFY TO THE DISTRICT BOARD IN 203
WRITING THAT THE DISTRICT HAS SUFFICIENT TEXTBOOKS, INSTRUCTIONAL 204
SOFTWARE, AND INSTRUCTIONAL MATERIALS, SUPPLIES, AND EQUIPMENT TO 206
ENSURE A THOROUGH AND EFFICIENT EDUCATION WITHIN THE DISTRICT: 207
(a) THE DISTRICT SUPERINTENDENT; 209
(b) IN DISTRICTS REQUIRED TO HAVE A BUSINESS ADVISORY 211
COUNCIL, A PERSON DESIGNATED BY VOTE OF THE BUSINESS ADVISORY 212
COUNCIL;
(c) IF THE DISTRICT TEACHERS ARE REPRESENTED BY AN 214
EXCLUSIVE BARGAINING REPRESENTATIVE FOR PURPOSES OF CHAPTER 4117. 216
OF THE REVISED CODE, THE PRESIDENT OF THAT ORGANIZATION OR THE 219
PRESIDENT'S DESIGNEE.
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(2) THE DISTRICT BOARD ADOPTS, BY UNANIMOUS VOTE OF ALL 221
MEMBERS OF THE BOARD, A RESOLUTION STATING THAT THE DISTRICT HAS 222
SUFFICIENT TEXTBOOKS, INSTRUCTIONAL SOFTWARE, AND INSTRUCTIONAL 223
MATERIALS, SUPPLIES, AND EQUIPMENT TO ENSURE A THOROUGH AND 224
EFFICIENT EDUCATION WITHIN THE DISTRICT. 225
(D) NOTWITHSTANDING ANY PROVISION TO THE CONTRARY IN 228
CHAPTER 4117. OF THE REVISED CODE, THE REQUIREMENTS OF THIS
SECTION PREVAIL OVER ANY CONFLICTING PROVISIONS OF AGREEMENTS 229
BETWEEN EMPLOYEE ORGANIZATIONS AND PUBLIC EMPLOYERS ENTERED INTO 230
ON OR AFTER THE EFFECTIVE DATE OF THIS SECTION.
Sec. 3315.18. (A) THE BOARD OF EDUCATION OF EACH CITY, 232
EXEMPTED VILLAGE, LOCAL, AND JOINT VOCATIONAL SCHOOL DISTRICT 233
SHALL ESTABLISH A CAPITAL AND MAINTENANCE FUND AND SHALL DEPOSIT 234
INTO THAT FUND FOUR PER CENT, OR ANOTHER PERCENTAGE IF 235
ESTABLISHED IN RULES ADOPTED UNDER DIVISION (B) OF THIS SECTION, 236
OF ALL REVENUES RECEIVED BY THE DISTRICT THAT WOULD OTHERWISE 237
HAVE BEEN DEPOSITED IN THE GENERAL FUND, EXCEPT THAT MONEY 238
RECEIVED FROM A PERMANENT IMPROVEMENT LEVY AUTHORIZED BY SECTION 239
5705.21 OF THE REVISED CODE MAY REPLACE GENERAL REVENUE MONEYS IN 240
MEETING THE REQUIREMENTS OF THIS SECTION. MONEY IN THE FUND 241
SHALL BE USED SOLELY FOR ACQUISITION, REPLACEMENT, ENHANCEMENT, 242
MAINTENANCE, OR REPAIR OF PERMANENT IMPROVEMENTS, AS THAT TERM 243
IS DEFINED IN SECTION 5705.01 OF THE REVISED CODE. ANY MONEY IN 244
THE FUND THAT IS NOT USED IN ANY FISCAL YEAR SHALL CARRY FORWARD 245
TO THE NEXT FISCAL YEAR. 246
(B) THE STATE SUPERINTENDENT OF PUBLIC INSTRUCTION AND THE 249
AUDITOR OF STATE JOINTLY SHALL ADOPT RULES IN ACCORDANCE WITH 250
CHAPTER 119. OF THE REVISED CODE DEFINING WHAT CONSTITUTES
EXPENDITURES PERMITTED BY DIVISION (A) OF THIS SECTION AND MAY 251
DESIGNATE A PERCENTAGE, OTHER THAN FOUR PER CENT, OF DISTRICT 252
OPERATING REVENUES THAT MUST BE DEPOSITED INTO THE FUND. THE 254
AUDITOR OF STATE SHALL ADOPT RULES UNDER SECTION 117.20 OF THE 255
REVISED CODE AUTHORIZING UP TO A THREE-YEAR PHASE-IN PERIOD FOR 256
DISTRICT BOARDS TO MEET THE PERCENTAGE REQUIREMENTS OF DIVISION 257
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(A) OF THIS SECTION. 258
(C) NOTWITHSTANDING ANY PROVISION TO THE CONTRARY IN 261
CHAPTER 4117. OF THE REVISED CODE, THE REQUIREMENTS OF THIS
SECTION PREVAIL OVER ANY CONFLICTING PROVISIONS OF AGREEMENTS 262
BETWEEN EMPLOYEE ORGANIZATIONS AND PUBLIC EMPLOYERS ENTERED INTO 263
AFTER THE EFFECTIVE DATE OF THIS SECTION.
Sec. 3316.03. (A) The auditor of state shall declare a 272
school district to be in a state of fiscal watch if the auditor 273
of state determines that either division (A)(1) or, (2), OR (3) 275
of this section applies to the school district: 276
(1) All of the following conditions are satisfied with 278
respect to the school district: 279
(a) An operating deficit has been certified for the 281
current fiscal year by the auditor of state under section 282
3313.483 of the Revised Code, and the certified operating deficit 284
exceeds eight per cent of the school district's general fund 285
revenue for the preceding fiscal year; 286
(b) The unencumbered cash balance in the school district's 289
general fund at the close of the preceding fiscal year, less any 290
advances of property taxes, was less than eight per cent of the 291
expenditures made from the general fund for the preceding fiscal 292
year;
(c) A majority of the voting electors have not voted in 294
favor of levying a tax under section 5705.194 or 5705.21 or 296
Chapter 5748. of the Revised Code that the auditor of state 297
expects will raise enough additional revenue in the next 298
succeeding fiscal year that divisions (A)(1)(a) and (b) of this 299
section will not apply to the district in such next succeeding 300
fiscal year.
(2) The school district has outstanding securities issued 303
under division (A)(4) of section 3316.06 of the Revised Code and 306
its financial planning and supervision commission has been 307
terminated under section 3316.16 of the Revised Code. 309
(3) THE SCHOOL DISTRICT HAS RECEIVED AN ADVANCEMENT UNDER 311
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SECTION 3316.20 OF THE REVISED CODE. 312
(B) The auditor of state, after consulting with the 314
superintendent of public instruction, shall issue an order 315
declaring a school district to be in a state of fiscal emergency 317
if the school district board fails, pursuant to section 3316.04 318
of the Revised Code, to submit a plan acceptable to the state
superintendent of public instruction within one hundred twenty 319
days of the auditor's declaration pursuant to division (A) of 320
this section; if a declaration of fiscal emergency is required by 321
division (D) of section 3316.04 of the Revised Code; or if the 322
auditor of state determines that all of the following conditions 323
are satisfied with respect DIVISION (B)(1), (2), (3), OR (4) OF 324
THIS SECTION APPLIES to the school district: 325
(1) ALL OF THE FOLLOWING CONDITIONS ARE SATISFIED WITH 327
RESPECT TO THE SCHOOL DISTRICT: 328
(a) The board of education of the school district is not 330
able to demonstrate, to the auditor of state's satisfaction, the 331
district's ability to repay outstanding loans received pursuant 332
to section 3313.483 of the Revised Code or to repay securities 333
issued pursuant to section 133.301 of the Revised Code in 334
accordance with applicable repayment schedules unless the board 335
requests additional loans under section 3313.483 and section 336
133.301 of the Revised Code in an aggregate principal amount 338
exceeding fifty per cent of the sum of the following: 339
(a)(i) The aggregate original principal amount of loans 342
received in the preceding fiscal year under section 3313.483 of 343
the Revised Code;
(b)(ii) The aggregate amount borrowed by the district 345
under section 133.301 of the Revised Code, excluding any 347
additional amount borrowed as authorized under division (C) of 348
that section.
(2)(b) An operating deficit has been certified for the 350
current fiscal year by the auditor of state under section 351
3313.483 of the Revised Code, and the certified operating deficit 353
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exceeds fifteen per cent of the school district's general fund 354
revenue for the preceding fiscal year. In determining the amount 355
of an operating deficit under division (B)(2)(1)(b) of this 356
section, the auditor of state shall credit toward the amount of 357
that deficit only the amount that may be borrowed from the 358
spending reserve balance as determined under section 133.301 and 359
division (G) of section 5705.29 of the Revised Code;. 360
(3)(c) A majority of the voting electors have not voted in 362
favor of levying a tax under section 5705.194 or 5705.21 or 364
Chapter 5748. of the Revised Code that the auditor of state 365
expects will raise enough additional revenue in the next 366
succeeding fiscal year that divisions (A)(1)(a) and (b) of this 367
section will not apply to the district in such next succeeding 368
fiscal year.
(4)(d) The school district is one that, at the time of the 370
auditor of state's determination under this section, had an 372
average daily membership of more than ten thousand students as 373
most recently reported to the department of education pursuant to 375
division (A) of section 3317.03 of the Revised Code. 376
(2) THE SCHOOL DISTRICT BOARD FAILS, PURSUANT TO SECTION 379
3316.04 OF THE REVISED CODE, TO SUBMIT A PLAN ACCEPTABLE TO THE 380
STATE SUPERINTENDENT OF PUBLIC INSTRUCTION WITHIN ONE HUNDRED 381
TWENTY DAYS OF THE AUDITOR'S DECLARATION UNDER DIVISION (A) OF 382
THIS SECTION; 383
(3) A DECLARATION OF FISCAL EMERGENCY IS REQUIRED BY 385
DIVISION (D) OF SECTION 3316.04 OF THE REVISED CODE; 388
(4) THE SCHOOL DISTRICT HAS RECEIVED MORE THAN ONE 390
ADVANCEMENT UNDER SECTION 3316.20 OF THE REVISED CODE WITHIN A 392
TWO-YEAR PERIOD, OR HAS RECEIVED ONLY ONE SUCH ADVANCEMENT BUT 393
ALSO HAS AN OPERATING DEFICIT AS DESCRIBED IN DIVISION (B)(1)(b) 394
OF THIS SECTION. 395
(C) In making the determinations under this section, the 397
auditor of state may use financial reports required under section 399
117.43 of the Revised Code; tax budgets, certificates of 400
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estimated resources and amendments thereof, annual appropriating 401
measures and spending plans, and any other documents or 402
information prepared pursuant to Chapter 5705. of the Revised 403
Code; and any other documents, records, or information available 404
to the auditor of state that indicate the conditions described in 405
divisions (A) and (B) of this section.
(D) The auditor of state shall certify the action taken 407
under division (A) or (B) of this section to the board of 408
education of the school district, the director of budget and 409
management, the mayor or county auditor who could be required to 410
act pursuant to division (B)(1) of section 3316.05 of the Revised
Code, and to the superintendent of public instruction. 411
(E) A determination by the auditor of state under this 413
section that a fiscal emergency condition does not exist is final 414
and conclusive and not appealable. A determination by the 415
auditor of state under this section that a fiscal emergency 416
exists is final, except that the board of education of the school 417
district affected by such a determination may appeal the
determination of the existence of a fiscal emergency condition to 418
the court of appeals having territorial jurisdiction over the 419
school district. The appeal shall be heard expeditiously by the 420
court of appeals and for good cause shown shall take precedence 421
over all other civil matters except earlier matters of the same 422
character. Notice of such appeal must be filed with the auditor
of state and such court within thirty days after certification by 423
the auditor of state to the board of education of the school 424
district provided for in division (D) of this section. In such 425
appeal, determinations of the auditor of state shall be presumed 426
to be valid and the board of education shall have the burden of 427
proving, by clear and convincing evidence, that each of the 428
determinations made by the auditor of state as to the existence
of a fiscal emergency condition under this section was in error. 429
If the board of education fails, upon presentation of its case, 430
to prove by clear and convincing evidence that each such 431
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determination by the auditor of state was in error, the court 432
shall dismiss the appeal. The board of education and the auditor 433
of state may introduce any evidence relevant to the existence or
nonexistence of such fiscal emergency conditions. The pendency 434
of any such appeal shall not affect or impede the operations of 435
this chapter; no restraining order, temporary injunction, or 436
other similar restraint upon actions consistent with this chapter 437
shall be imposed by the court or any court pending determination 438
of such appeal; and all things may be done under this chapter 439
that may be done regardless of the pendency of any such appeal.
Any action taken or contract executed pursuant to this chapter 440
during the pendency of such appeal is valid and enforceable among 441
all parties, notwithstanding the decision in such appeal. If the 442
court of appeals reverses the determination of the existence of a 443
fiscal emergency condition by the auditor of state, the 444
determination no long has any effect, and any procedures
undertaken as a result of the determination shall be terminated. 445
Sec. 3316.042. THE AUDITOR OF STATE MAY CONDUCT A 447
PERFORMANCE AUDIT OF A SCHOOL DISTRICT IN A STATE OF FISCAL 448
WATCH, OR IN A STATE OF FISCAL EMERGENCY, IN WHICH THE AUDITOR OF 449
STATE REVIEWS ANY PROGRAMS OR AREAS OF OPERATION IN WHICH THE 450
AUDITOR OF STATE BELIEVES THAT GREATER OPERATIONAL EFFICIENCIES
OR ENHANCED PROGRAM RESULTS CAN BE ACHIEVED. A PERFORMANCE AUDIT 451
UNDER THIS SECTION SHALL NOT INCLUDE REVIEW OR EVALUATION OF 452
SCHOOL DISTRICT ACADEMIC PERFORMANCE. 453
Sec. 3316.07. (A) A school district financial planning 462
and supervision commission has the following powers, duties, and 463
functions:
(1) To review or to assume responsibility for the 465
development of all tax budgets, tax levy and bond and note 467
resolutions, appropriation measures, and certificates of
estimated resources of the school district in order to ensure 468
that such are consistent with the financial recovery plan and a 469
balanced appropriation budget for the current fiscal year, and to 470
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request and review any supporting information upon which the 471
financial recovery plan and balanced appropriation budget may be 472
developed and based, and to determine whether revenue estimates 473
and estimates of expenditures and appropriations will result in a 474
balanced budget;
(2) To inspect and secure copies of any document, 476
resolution, or instrument pertaining to the effective financial 478
accounting and reporting system, debt obligations, debt limits, 479
financial recovery plan, balanced appropriation budgets,
appropriation measures, report of audit, statement or invoice, or 480
other worksheet or record of the school district; 481
(3) To inspect and secure copies of any document, 483
instrument, certification, records of proceedings, or other 484
worksheet or records of the county budget commission, county 486
auditor, or other official or employee of the school district or
of any other political subdivision or agency of government of the 487
state;
(4) To review, revise, and approve determinations and 489
certifications affecting the school district made by the county 490
budget commission or county auditor pursuant to Chapter 5705. of 491
the Revised Code to ensure that such determinations and 492
certifications are consistent with the laws of the state; 493
(5) To bring civil actions, including mandamus, to enforce 495
this chapter; 496
(6) After consultation with the officials of the school 498
district and the auditor of state, to implement or require 499
implementation of any necessary or appropriate steps to bring the 501
books of account, accounting systems, and financial procedures 502
and reports of the school district into compliance with
requirements prescribed by the auditor of state, and to assume 503
responsibility for achieving such compliance and for making any 504
desirable modifications and supplementary systems and procedures 505
pertinent to the school district;
(7) To assist or provide assistance to the school district 507
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or to assume the total responsibility for the structuring or the 508
terms of, and the placement for sale of, debt obligations of the 509
school district;
(8) To perform all other powers, duties, and functions as 511
provided under this chapter; 512
(9) To make and enter into all contracts and agreements 514
necessary or incidental to the performance of its duties and the 515
exercise of its powers under this chapter; 516
(10) To consult with officials of the school district and 518
make recommendations or assume the responsibility for 519
implementing cost reductions and revenue increases to achieve 520
balanced budgets and carry out the financial recovery plan in 521
accordance with this chapter;
(11) TO MAKE REDUCTIONS IN FORCE TO BRING THE SCHOOL 523
DISTRICT'S BUDGET INTO BALANCE, NOTWITHSTANDING SECTION 3319.081 524
AND DIVISIONS (A) AND (B) OF SECTION 3319.17 OF THE REVISED CODE, 525
AND NOTWITHSTANDING ANY PROVISION TO THE CONTRARY IN SECTION 526
4117.08 OR 4117.10 OF THE REVISED CODE OR IN ANY COLLECTIVE
BARGAINING AGREEMENT ENTERED INTO ON OR AFTER THE EFFECTIVE DATE 527
OF THIS SECTION.
IN MAKING REDUCTIONS IN FORCE, THE COMMISSION SHALL FIRST 529
CONSIDER REASONABLE REDUCTIONS AMONG THE ADMINISTRATIVE AND 530
NON-TEACHING EMPLOYEES OF THE SCHOOL DISTRICT GIVING DUE REGARD 531
TO ENSURING THE DISTRICT'S ABILITY TO MAINTAIN THE PERSONNEL, 532
PROGRAMS, AND SERVICES ESSENTIAL TO THE PROVISION OF AN ADEQUATE 534
EDUCATIONAL PROGRAM.
IN MAKING THESE REDUCTIONS IN NON-TEACHING EMPLOYEES IN 536
DISTRICTS WHERE CHAPTER 124. OF THE REVISED CODE CONTROLS SUCH 539
REDUCTIONS, THE REDUCTIONS SHALL BE MADE IN ACCORDANCE WITH
SECTIONS 124.321 TO 124.327 OF THE REVISED CODE. IN MAKING THESE 541
REDUCTIONS IN NON-TEACHING EMPLOYEES IN DISTRICTS WHERE CHAPTER 543
124. OF THE REVISED CODE DOES NOT CONTROL THESE REDUCTIONS, 545
WITHIN EACH CATEGORY OF NON-TEACHING EMPLOYEES, THE COMMISSION 546
SHALL GIVE PREFERENCE TO THOSE EMPLOYEES WITH CONTINUING 547
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CONTRACTS OR NON-PROBATIONARY STATUS AND WHO HAVE GREATER
SENIORITY. 548
IF REVENUES AND EXPENDITURES CANNOT BE BALANCED BY 550
REASONABLE REDUCTIONS IN ADMINISTRATIVE AND NON-TEACHING 551
EMPLOYEES, THE COMMISSION MAY ALSO MAKE REASONABLE REDUCTIONS IN 552
THE NUMBER OF TEACHING CONTRACTS. IF THE COMMISSION FINDS IT 553
NECESSARY TO SUSPEND TEACHING CONTRACTS, IT SHALL SUSPEND THEM IN
ACCORDANCE WITH DIVISION (C) OF SECTION 3319.17 OF THE REVISED 556
CODE BUT SHALL CONSIDER A REDUCTION IN NON-CLASSROOM TEACHERS 557
BEFORE CLASSROOM TEACHERS.
(B) During the fiscal emergency period, the commission 559
shall, in addition to other powers: 560
(1) With respect to the appropriation measure in effect at 562
the commencement of the fiscal emergency period of the school 564
district if that period commenced more than three months prior to 566
the end of the current fiscal year, and otherwise with respect to 567
the appropriation measure for the next fiscal year:
(a) Review and determine the adequacy of all revenues to 569
meet all expenditures for such fiscal year; 570
(b) Review and determine the extent of any deficiency of 572
revenues to meet such expenditures; 573
(c) Require the school district board or superintendent to 575
provide justification documents to substantiate, to the extent 577
and in the manner considered necessary, any item of revenue or 578
appropriation;
(d) Not later than sixty days after taking office or after 580
receiving the appropriation measure for the next fiscal year, 581
issue a public report regarding its review pursuant to division 582
(B)(1) of this section. 583
(2) Require the school district board, by resolution, to 585
establish monthly levels of expenditures and encumbrances 586
consistent with the financial recovery plan and the commission's 587
review pursuant to divisions (B)(1)(a) and (1)(b) of this 588
section, or establish such levels itself. If the commission 590
15
permits the district board to make expenditures, the commission 591
shall monitor the monthly levels of expenditures and encumbrances 592
and require justification documents to substantiate any departure 593
from any approved level. No district board shall make any
expenditure apart from the approved level without the written 594
approval of the commission. 595
(C) In making any determination pursuant to division (B) 597
of this section, the commission may rely on any information 599
considered in its judgment reliable or material and shall not be 600
restricted by any tax budget or certificate or any other document 601
the school district may have adopted or received from any other 602
governmental agency.
(D) County, state, and school district officers or 604
employees shall assist the commission diligently and promptly in 606
the prosecution of its duties, including the furnishing of any 607
materials, including justification documents, required. 608
(E) Annually on or before the first day of April during 610
the fiscal emergency period, the commission shall make reports 611
and recommendations to the speaker of the house of 612
representatives and the president of the senate concerning 613
progress of the school district to eliminate fiscal emergency 614
conditions, failures of the school district to comply with this 615
chapter, and recommendations for further actions to attain the 616
objectives of this chapter, including any legislative action 617
needed to make provisions of law more effective for their 618
purposes, or to enhance revenue raising or financing capabilities 619
of school districts. The commission may make such interim 620
reports as it considers appropriate for such purposes and shall 621
make such additional reports as may be requested by either house 622
of the general assembly. 623
Sec. 3316.20. THE SCHOOL DISTRICT SOLVENCY ASSISTANCE FUND 625
IS HEREBY CREATED IN THE STATE TREASURY, TO CONSIST OF SUCH 626
AMOUNTS DESIGNATED FOR THE PURPOSES OF THE FUND BY THE GENERAL 627
ASSEMBLY. THE FUND SHALL BE USED TO MAKE ADVANCEMENTS TO SCHOOL 628
16
DISTRICTS TO ENABLE THEM TO REMAIN SOLVENT AND TO PAY 629
UNFORSEEABLE EXPENSES OF A TEMPORARY OR EMERGENCY NATURE THAT
THEY ARE UNABLE TO PAY FROM EXISTING RESOURCES. 630
ADVANCEMENTS SHALL BE MADE FROM THE FUND BY THE 632
SUPERINTENDENT OF PUBLIC INSTRUCTION IN ACCORDANCE WITH RULES 633
JOINTLY ADOPTED BY THE SUPERINTENDENT AND THE AUDITOR OF STATE 634
SPECIFYING ADVANCEMENT APPROVAL CRITERIA AND PROCEDURES NECESSARY 635
FOR ADMINISTERING THE FUND.
THE FUND SHALL BE REIMBURSED FOR ANY AMOUNTS ADVANCED NOT 637
LATER THAN THE END OF THE SECOND FISCAL YEAR FOLLOWING THE FISCAL 638
YEAR IN WHICH THE ADVANCEMENT WAS MADE. IF NOT MADE DIRECTLY BY 639
THE SCHOOL DISTRICT, SUCH REIMBURSEMENT SHALL BE MADE BY THE 641
DIRECTOR OF BUDGET AND MANAGEMENT FROM THE AMOUNTS THE SCHOOL 643
DISTRICT WOULD OTHERWISE RECEIVE PURSUANT TO SECTIONS 3317.022 TO 644
3317.025 OF THE REVISED CODE, OR FROM ANY OTHER FUNDS 646
APPROPRIATED FOR THE DISTRICT BY THE GENERAL ASSEMBLY. 647
Sec. 3319.17. (A) As used in this section, "interdistrict 656
contract" means any contract or agreement entered into by an 658
educational service center governing board and another board or 659
other public entity pursuant to section 3313.17, 3313.841, 660
3313.842, 3313.843, 3313.91, or 3323.08 of the Revised Code, 661
including any such contract or agreement for the provision of 662
services funded under division (P) of section 3317.024 of the 663
Revised Code or provided in any unit approved under section 664
3317.05 or 3317.11 of the Revised Code. 665
(B) When, for any of the following reasons that apply to 667
any city, exempted village, local, or joint vocational school 669
district or any educational service center, the board decides
that it will be necessary to reduce the number of teachers it 670
employs, it may make a reasonable reduction: 671
(1) In the case of any district or service center, return 673
to duty of regular teachers after leaves of absence including 674
leaves provided pursuant to division (B) of section 3314.10 of 675
the Revised Code, suspension of schools, or territorial changes 676
17
affecting the district or center;
(2) In the case of any city, exempted village, local, or 678
joint vocational school district, decreased enrollment of pupils 679
in the district; 680
(3) In the case of any governing board of a service center 683
providing any particular service directly to pupils pursuant to 684
one or more interdistrict contracts requiring such service, 685
reduction in the total number of pupils the governing board is 686
required to provide with the service under all interdistrict 688
contracts as a result of the termination or nonrenewal of one or 689
more of these interdistrict contracts; 690
(4) In the case of any governing board providing any 694
particular service that it does not provide directly to pupils 695
pursuant to one or more interdistrict contracts requiring such 696
service, reduction in the total level of the service the
governing board is required to provide under all interdistrict 697
contracts as a result of the termination or nonrenewal of one or 698
more of these interdistrict contracts. 699
(C) In making any such reduction, any city, exempted 701
village, local, or joint vocational school board shall proceed to 702
suspend contracts in accordance with the recommendation of the 703
superintendent of schools who shall, within each teaching field 704
affected, give preference to teachers on continuing contracts and 705
to teachers who have greater seniority. In making any such 706
reduction, any governing board of a service center shall proceed 708
to suspend contracts in accordance with the recommendation of the 709
superintendent who shall, within each teaching field or service 711
area affected, give preference to teachers on continuing 712
contracts and to teachers who have greater seniority.
The teachers whose continuing contracts are suspended by 714
any board pursuant to this section shall have the right of 715
restoration to continuing service status by that board in the 716
order of seniority of service in the district if and when 717
teaching positions become vacant or are created for which any of 718
18
such teachers are or become qualified. 719
Sec. 3319.225. NOTWITHSTANDING SECTIONS 3319.01 AND 721
3319.22 OF THE REVISED CODE, THE BOARD OF EDUCATION OF ANY CITY, 723
LOCAL, OR EXEMPTED VILLAGE, OR JOINT VOCATIONAL SCHOOL DISTRICT,
OR THE GOVERNING BOARD OF ANY EDUCATIONAL SERVICE CENTER MAY 724
REQUEST THE STATE BOARD OF EDUCATION TO ISSUE A ONE-YEAR 726
TEMPORARY EDUCATOR LICENSE VALID FOR BEING EMPLOYED AS A 728
SUPERINTENDENT, OR IN ANY OTHER ADMINISTRATIVE POSITION, TO AN 729
INDIVIDUAL SPECIFIED BY THE DISTRICT BOARD. THE STATE BOARD OF 730
EDUCATION MAY ISSUE THE EDUCATOR LICENSE IF THE REQUESTING 732
DISTRICT BOARD HAS DETERMINED BOTH OF THE FOLLOWING: 733
(A) THE INDIVIDUAL IS OF GOOD MORAL CHARACTER; 735
(B) THE INDIVIDUAL HOLDS AT LEAST A BACCALAUREATE DEGREE 737
FROM AN ACCREDITED INSTITUTION OF HIGHER EDUCATION IN A FIELD 739
RELATED TO FINANCE OR ADMINISTRATION, OR HAS FIVE YEARS OF RECENT 740
WORK EXPERIENCE IN EDUCATION, MANAGEMENT, OR ADMINISTRATION. 741
A ONE-YEAR TEMPORARY EDUCATOR LICENSE IS VALID ONLY IN THE 743
DISTRICT WHOSE BOARD REQUESTED THE LICENSE. AN INDIVIDUAL 745
HOLDING SUCH A LICENSE MAY BE EMPLOYED AS A SUPERINTENDENT OR IN 747
ANY OTHER ADMINISTRATIVE POSITION IN SUCH DISTRICT. THE STATE 748
BOARD OF EDUCATION MAY RENEW SUCH LICENSE ANNUALLY UPON REQUEST 749
OF THE EMPLOYING DISTRICT.
Sec. 5705.29. The tax budget shall present the following 758
information in such detail as is prescribed by the auditor of 759
state, unless an alternative form of the budget is permitted 760
under section 5705.281 of the Revised Code: 761
(A)(1) A statement of the necessary current operating 763
expenses for the ensuing fiscal year for each department and 764
division of the subdivision, classified as to personal services 765
and other expenses, and the fund from which such expenditures are 766
to be made. Except in the case of a school district, this 767
estimate may include a contingent expense not designated for any 768
particular purpose, and not to exceed three per cent of the total 769
amount of appropriations for current expenses. In the case of a 770
19
school district, this estimate may include a contingent expense 771
not designated for any particular purpose and not to exceed 772
thirteen per cent of the total amount of appropriations for 773
current expenses. 774
(2) A statement of the expenditures for the ensuing fiscal 776
year necessary for permanent improvements, exclusive of any 777
expense to be paid from bond issues, classified as to the 778
improvements contemplated by the subdivision and the fund from 779
which such expenditures are to be made; 780
(3) The amounts required for the payment of final 782
judgments; 783
(4) A statement of expenditures for the ensuing fiscal 785
year necessary for any purpose for which a special levy is 786
authorized, and the fund from which such expenditures are to be 787
made; 788
(5) Comparative statements, so far as possible, in 790
parallel columns of corresponding items of expenditures for the 791
current fiscal year and the two preceding fiscal years. 792
(B)(1) An estimate of receipts from other sources than the 794
general property tax during the ensuing fiscal year, which shall 795
include an estimate of unencumbered balances at the end of the 796
current fiscal year, and the funds to which such estimated 797
receipts are credited; 798
(2) The amount each fund requires from the general 800
property tax, which shall be the difference between the 801
contemplated expenditure from the fund and the estimated 802
receipts, as provided in this section. The section of the 803
Revised Code under which the tax is authorized shall be set 804
forth. 805
(3) Comparative statements, so far as possible, in 807
parallel columns of taxes and other revenues for the current 808
fiscal year and the two preceding fiscal years. 809
(C)(1) The amount required for debt charges; 811
(2) The estimated receipts from sources other than the tax 813
20
levy for payment of such debt charges, including the proceeds of 814
refunding bonds to be issued to refund bonds maturing in the next 815
succeeding fiscal year; 816
(3) The net amount for which a tax levy shall be made, 818
classified as to bonds authorized and issued prior to January 1, 819
1922, and those authorized and issued subsequent to such date, 820
and as to what portion of the levy will be within and what in 821
excess of the ten-mill limitation. 822
(D) An estimate of amounts from taxes authorized to be 824
levied in excess of the ten-mill limitation on the tax rate, and 825
the fund to which such amounts will be credited, together with 826
the sections of the Revised Code under which each such tax is 827
exempted from all limitations on the tax rate. 828
(E)(1) A board of education may include in its budget for 830
the fiscal year in which a levy proposed under section 5705.194, 831
5705.21, or 5705.213, or the original levy under section 5705.212 832
of the Revised Code is first extended on the tax list and 833
duplicate an estimate of expenditures to be known as a voluntary 834
contingency reserve balance, which shall not be greater than 835
twenty-five per cent of the total amount of the levy estimated to 836
be available for appropriation in such year. 837
(2) A board of education may include in its budget for the 839
fiscal year following the year in which a levy proposed under 840
section 5705.194, 5705.21, or 5705.213, or the original levy 841
under section 5705.212 of the Revised Code is first extended on 842
the tax list and duplicate an estimate of expenditures to be 843
known as a voluntary contingency reserve balance, which shall not 844
be greater than twenty per cent of the amount of the levy 845
estimated to be available for appropriation in such year. 846
(3) Except as provided in division (E)(4) of this section, 848
the full amount of any reserve balance the board includes in its 849
budget shall be retained by the county auditor and county 850
treasurer out of the first semiannual settlement of taxes until 851
the beginning of the next succeeding fiscal year, and thereupon, 852
21
with the depository interest apportioned thereto, it shall be 853
turned over to the board of education, to be used for the 854
purposes of such fiscal year. 855
(4) A board of education may, by a two-thirds vote of all 857
members of the board, appropriate any amount withheld as a 858
voluntary contingency reserve balance during the fiscal year for 859
any lawful purpose, provided that prior to such appropriation the 860
board of education has authorized the expenditure of all amounts 861
appropriated for contingencies under section 5705.40 of the 862
Revised Code. Upon request by the board of education, the county 863
auditor shall draw a warrant on the district's account in the 864
county treasury payable to the district in the amount requested. 865
(F)(1) As used in this division, "police or fire 867
department equipment expenditures" includes expenditures for 868
equipment used to provide ambulance or emergency medical services 869
operated by a police or fire department. 870
A board of township trustees may include in its budget an 873
estimate of expenditures to be known as a reserve balance for 874
police or fire department equipment or road maintenance equipment 875
expenditures. This reserve balance shall not exceed ten per cent 876
of the total estimated appropriations included in the township 877
budget estimate. If, in accordance with division (A) of section 878
505.83 of the Revised Code, the board of township trustees has 879
unanimously adopted a resolution establishing the reserve balance 880
account and specifying the reason for its creation and has 881
certified the resolution to the county auditor, the full amount 882
of the reserve balance, as allowed by the budget commission, 883
shall be turned over to the township each year by the county 884
auditor and county treasurer out of the second semiannual 885
settlement of taxes until the date specified in the resolution, 886
which shall not be later than five years from the date of the 887
first such deposit in the account, or until the reserve amount 888
has been reached, whichever occurs first. 889
(2) Upon receipt of a certified copy of a resolution to 891
22
rescind the creation of a township reserve balance account 892
pursuant to division (B) of section 505.83 of the Revised Code, 893
the county auditor shall close the account and transfer the 894
account moneys and depository interest apportioned to it to the 895
township's general fund. 896
(G)(1) A board of education may include A SPENDING RESERVE 898
in its budget a spending reserve, which FOR FISCAL YEARS ENDING 900
ON OR BEFORE JUNE 30, 2002. THE SPENDING RESERVE shall consist 901
of an estimate of expenditures not to exceed the district's 903
spending reserve balance. A district's spending reserve balance 904
is the amount by which fifty per cent THE DESIGNATED PERCENTAGE 905
of the district's estimated personal property taxes to be settled 907
during the calendar year in which the fiscal year ends exceeds 908
the estimated amount of personal property taxes to be so settled 909
and received by the district during that fiscal year. Moneys 910
from a spending reserve shall be appropriated in accordance with 911
section 133.301 of the Revised Code. 912
(2) FOR THE PURPOSES OF COMPUTING A SCHOOL DISTRICT'S 914
SPENDING RESERVE BALANCE FOR A FISCAL YEAR, THE DESIGNATED 915
PERCENTAGE SHALL BE AS FOLLOWS: 916
FISCAL YEAR ENDING IN: DESIGNATED PERCENTAGE 919
1998 50% 921
1999 40% 922
2000 30% 923
2001 20% 924
2002 10% 925
(H) As used in this division: 928
(1) "Police or fire department equipment expenditures" 930
includes expenditures for equipment used to provide ambulance or 931
emergency medical services operated by a police or fire 932
department.
(2) "Detention facility" means any place used for the 934
confinement of a person charged with or convicted of any crime or 936
alleged or found to be a delinquent or unruly child.
23
The legislative authority of a municipal corporation may 938
include in its budget an estimate of expenditures to be known as 939
a reserve balance for police or fire department equipment 940
expenditures, for constructing, acquiring, equipping, or 941
repairing a detention facility, or for road maintenance equipment 942
expenditures by creating, by ordinance or resolution, a reserve 943
balance account. Money credited to the account may be derived 944
from any general fund sources or from the proceeds of a special 945
levy that may be used for the purpose for which the account is 946
established. The ordinance or resolution shall state that money 947
in the account may be expended only for the purpose for which the 948
account is established, that the account will be maintained until 950
a specified date not to exceed five years from the date of the 951
first deposit in the account, and that the total amount of money 952
in all reserve balance accounts derived from general fund sources 953
shall not exceed ten per cent of the current total estimated 954
expenditures from the municipal corporation's general fund, and 955
the total amount of money in all reserve balance accounts derived 956
from a special levy shall not exceed ten per cent of the current 957
total estimated expenditures from the special levy. The 958
legislative authority shall certify a copy of the ordinance or 959
resolution to the county auditor. Upon receiving the certified 960
copy, the county auditor and county treasurer shall turn over to 961
the municipal corporation, out of the second semiannual 963
settlement of taxes, any amount of the reserve balance to be
derived from property tax sources, but only until the date 965
specified in the ordinance or resolution or until the reserve 966
amount as indicated in the ordinance or resolution has been 967
reached, whichever occurs first.
A legislative authority may create a separate reserve 969
balance account under this division for police department 970
equipment expenditures, fire department equipment expenditures, 971
or ambulance or emergency medical services equipment 972
expenditures, or any combination thereof. Each such account is 973
24
subject to the provisions of this section regarding a single 974
account for all such purposes.
Upon receiving a certified copy of an ordinance or 976
resolution to rescind the creation of a municipal reserve balance 977
account, the county auditor shall close the account and transfer 978
all money in the account to the municipal general fund, if the 979
account is derived from the general fund, or to the fund to which 980
proceeds of the special levy are credited, if the account is 981
derived from the proceeds of a special levy. 982
(I) A board of county commissioners that has adopted a 985
resolution establishing a reserve balance account under section 986
305.23 of the Revised Code may include in its budget an estimate 988
of expenditures to be known as a reserve balance for the purpose 989
for which the account was established under that section. The 990
reserve shall not exceed ten per cent of the total estimated 991
appropriations included in the budget estimate of the general 992
fund in the case of a reserve balance account established under 993
division (A) of that section, or ten per cent of the total 995
estimated appropriations included in the budget estimate of the 996
special fund in which the account is established in the case of a 997
reserve balance account established under division (B) of that 998
section. If the board of county commissioners has certified a 999
copy of a resolution to the county auditor pursuant to that 1,000
section, the county auditor and county treasurer shall deposit 1,001
the amount of the annual reserve balance into the reserve balance 1,002
account out of the second semiannual settlement of taxes until 1,003
the date specified in that resolution, or until the reserve 1,004
amount specified in the resolution has been reached, whichever 1,005
occurs first.
Upon receiving a certified copy of a resolution rescinding 1,007
a reserve balance account, the county auditor shall close the 1,008
account and transfer all money in the account to a special fund 1,009
created for the purpose of receiving that money. Money deposited 1,011
into the fund from the reserve balance account shall be expended 1,012
25
only for the purpose for which the account was established. 1,013
(J) The county budget commission shall not reduce the 1,016
taxing authority of a board of township trustees, a board of 1,017
county commissioners, or the legislative authority of a municipal 1,018
corporation as a result of the creation of a reserve balance 1,019
account, and shall not consider the amount in a reserve balance 1,020
account as an unencumbered balance or as revenue for the purposes 1,021
of division (E)(3) or (4) of section 5747.51 or division (E)(3) 1,022
or (4) of section 5747.62 of the Revised Code. 1,023
(K)(1) EACH BOARD OF EDUCATION SHALL INCLUDE IN ITS TAX 1,025
BUDGET A BUDGET RESERVE FUND. THE BUDGET RESERVE FUND SHALL 1,026
CONSIST OF MONEY RESERVED FOR THE FUND FROM GENERAL FUND REVENUES 1,027
OR FROM OTHER SOURCES THAT MAY LAWFULLY BE CREDITED TO THE 1,028
GENERAL FUND. THE BALANCE IN THE BUDGET RESERVE FUND SHALL NOT 1,029
AT ANY TIME BE LESS THAN FIVE PER CENT OF GENERAL FUND REVENUES
FOR THE MOST RECENTLY CONCLUDED FISCAL YEAR, EXCEPT AS PROVIDED 1,030
IN DIVISION (K)(2) OR (3) OF THIS SECTION, AND EXCEPT FOR 1,031
DEFICIENCIES ARISING FROM THE APPROPRIATION OF MONEY FROM THE 1,032
FUND FOR UNANTICIPATED DEFICIENCIES IN REVENUE OR OTHER 1,033
EMERGENCIES PURSUANT TO A RESOLUTION ADOPTED BY TWO-THIRDS OF THE 1,034
MEMBERSHIP OF THE BOARD OF EDUCATION SPECIFYING THE REASON FOR 1,035
THE APPROPRIATION. THE AUDITOR OF STATE AND THE SUPERINTENDENT
OF PUBLIC INSTRUCTION JOINTLY SHALL ADOPT RULES GOVERNING 1,036
CONDITIONS THAT CONSTITUTE UNANTICIPATED DEFICIENCIES IN REVENUE 1,037
OR EMERGENCIES FOR WHICH APPROPRIATIONS MAY BE MADE FROM A BUDGET 1,038
RESERVE FUND. THE RULES ALSO SHALL PROVIDE THAT A BOARD OF 1,039
EDUCATION THAT INCLUDES A SPENDING RESERVE IN ITS TAX BUDGET FOR
A FISCAL YEAR UNDER DIVISION (G) OF THIS SECTION IS NOT SUBJECT 1,040
TO DIVISION (K)(2) OF THIS SECTION FOR THAT FISCAL YEAR. A BOARD 1,041
OF EDUCATION SHALL NOT APPROPRIATE MONEY FROM A BUDGET RESERVE 1,042
FUND WITHOUT FILING A SCHEDULE FOR REPLENISHING THE FUND WITH THE 1,043
SUPERINTENDENT OF PUBLIC INSTRUCTION AND RECEIVING APPROVAL OF 1,044
THE SCHEDULE FROM THE SUPERINTENDENT OF PUBLIC INSTRUCTION. 1,045
(2) BEGINNING WITH THE FISCAL YEAR ENDING IN 1999 AND 1,047
26
CONTINUING EACH FISCAL YEAR UNTIL THE BALANCE IN THE BUDGET 1,048
RESERVE FUND EQUALS FIVE PER CENT OF THE DISTRICT'S REVENUES 1,049
RECEIVED FOR CURRENT EXPENSES FOR THE PRECEDING FISCAL YEAR, IF 1,050
THE GROWTH IN A DISTRICT'S TOTAL REVENUES RECEIVED FOR CURRENT
EXPENSES FROM ONE FISCAL YEAR TO THE NEXT IS THREE PER CENT OR 1,051
MORE, THE BOARD OF EDUCATION SHALL CREDIT TO ITS BUDGET RESERVE 1,052
FUND, FROM THE GENERAL FUND OR FROM OTHER SOURCES THAT MAY 1,053
LAWFULLY BE CREDITED TO THE GENERAL FUND, AN AMOUNT NOT LESS THAN 1,054
ONE PER CENT OF THE REVENUE RECEIVED FOR CURRENT EXPENSES FOR THE 1,055
FISCAL YEAR, AT WHICH TIME THE BALANCE IN THE BUDGET RESERVE FUND
SHALL BE MAINTAINED AS OTHERWISE REQUIRED UNDER DIVISION (K)(1) 1,056
OF THIS SECTION. 1,057
(3) THE BALANCE IN THE BUDGET RESERVE FUND OF A SCHOOL 1,059
DISTRICT MAY BE LESS THAN FIVE PER CENT OF THE GENERAL FUND 1,060
REVENUE FOR THE MOST RECENTLY CONCLUDED FISCAL YEAR IN ANY FISCAL 1,061
YEAR IN WHICH THE SCHOOL DISTRICT IS IN A STATE OF FISCAL WATCH 1,062
OR FISCAL EMERGENCY PURSUANT TO SECTION 3316.03 OF THE REVISED
CODE.
(4) NOTWITHSTANDING ANY PROVISION TO THE CONTRARY IN 1,064
CHAPTER 4117. OF THE REVISED CODE, THE REQUIREMENTS OF DIVISION 1,065
(K) OF THIS SECTION PREVAIL OVER ANY CONFLICTING PROVISIONS OF 1,066
AGREEMENTS BETWEEN EMPLOYEE ORGANIZATIONS AND PUBLIC EMPLOYERS 1,067
ENTERED INTO AFTER THE EFFECTIVE DATE OF THIS SECTION.
Sec. 5705.38. (A) This division does not apply to school 1,076
district appropriation measures. On or about the first day of 1,077
each year, the taxing authority of each subdivision or other 1,078
taxing unit shall pass an appropriation measure, and thereafter 1,079
during the year it may pass any supplemental appropriation 1,080
measures as it finds necessary, based on the revised tax budget 1,081
and the official certificate of estimated resources or amendments 1,082
of the certificate. If adoption of a tax budget was waived under 1,083
section 5705.281 of the Revised Code, appropriation measures 1,084
shall be based on the official certificate of estimated 1,085
resources. If it desires to postpone the passage of the annual 1,086
27
appropriation measure until an amended certificate is received 1,087
based on the actual balances, it may pass a temporary
appropriation measure for meeting the ordinary expenses of the 1,088
taxing unit until no later than the first day of April of the 1,089
current year, and the appropriations made in the temporary 1,090
measure shall be chargeable to the appropriations in the annual 1,091
appropriation measure for that fiscal year when passed. 1,092
(B) A board of education shall pass its annual 1,094
appropriation measure by the first day of October. If, by the 1,095
first day of October, a board has not received either the amended 1,096
certificates of estimated resources required by division (B) of 1,097
section 5705.36 of the Revised Code or certifications that no 1,098
amended certificates need be issued, the adoption of the annual 1,099
appropriation measure shall be delayed until the amended 1,100
certificates or certifications are received. Prior to the 1,101
passage of the annual appropriation measure, the board may pass a 1,102
temporary appropriation measure for meeting the ordinary expenses 1,103
of the district until it passes an annual appropriation measure, 1,104
and appropriations made in the temporary measure shall be 1,105
chargeable to the appropriations in the annual appropriation 1,106
measure for that fiscal year when passed. During the fiscal year 1,107
and after the passage of the annual appropriation measure, a 1,108
district may pass any supplemental appropriation measures as it 1,109
finds necessary, based on the revised tax budget and the official 1,110
certificate of estimated resources or amendments of the 1,111
certificate. THE ANNUAL APPROPRIATION MEASURE, AND ANY TEMPORARY 1,112
OR SUPPLEMENTAL APPROPRIATION MEASURE, SHALL PROVIDE FOR THE 1,113
RESERVATION OF A SUFFICIENT AMOUNT OF MONEY FOR THE BUDGET 1,114
RESERVE FUND AS REQUIRED UNDER DIVISION (K) OF SECTION 5705.29 OF 1,115
THE REVISED CODE. School district appropriation measures shall 1,116
be in the form as the auditor of state, after consultation with 1,117
the tax commissioner, prescribes. 1,118
(C) Appropriation measures shall be classified so as to 1,120
set forth separately the amounts appropriated for each office, 1,121
28
department, and division, and, within each, the amount 1,122
appropriated for personal services. In the case of a municipal 1,123
university, the board of directors of which have assumed, in the 1,124
manner provided by law, custody and control of the funds of the 1,125
university, funds shall be appropriated as a lump sum for the use 1,126
of the university. 1,127
Sec. 5705.391. (A) A board of education shall adopt as 1,136
part of its annual appropriation measure a spending plan or in 1,137
the case of an amendment or supplement to an appropriation 1,138
measure, an amended spending plan, setting forth a schedule of 1,139
expenses and expenditures of all appropriated funds by the school 1,140
district for the fiscal year. A copy of the annual appropriation 1,141
measure and any amendment or supplement to it and the spending 1,142
plan or amended plan shall be submitted to the superintendent of 1,143
public instruction and shall set forth all revenues available for 1,144
appropriation by the district during the fiscal year and their 1,145
sources; the nature and amount of expenses to be incurred by the 1,146
district during such year, the outstanding and unpaid expenses on 1,147
the date the appropriation measure, amendment, or supplement is 1,148
adopted; the date or dates by which such expenses must be paid; 1,149
and such other information as the superintendent requires to 1,150
enable him THE SUPERINTENDENT to determine whether during such 1,151
year the district will incur any expenses that will impair its 1,153
ability to operate its schools with the revenue available to it 1,154
from existing revenue sources. The plan or amended plan shall be 1,155
presented in such detail and form as the superintendent 1,156
prescribes.
(B) NO LATER THAN JULY 1, 1998, THE DEPARTMENT OF 1,158
EDUCATION AND THE AUDITOR OF STATE SHALL JOINTLY ADOPT RULES 1,159
REQUIRING SCHOOL DISTRICTS TO INCLUDE FIVE-YEAR PROJECTIONS OF 1,160
REVENUES AND EXPENDITURES IN THE SPENDING PLAN REQUIRED BY THIS 1,161
SECTION. THE RULES SHALL PROVIDE FOR THE AUDITOR OR THE 1,162
DEPARTMENT TO EXAMINE THE FIVE-YEAR PROJECTIONS AND TO DETERMINE 1,163
WHETHER ANY FURTHER FISCAL ANALYSIS IS NEEDED TO ASCERTAIN
29
WHETHER A DISTRICT HAS THE POTENTIAL TO INCUR A DEFICIT DURING 1,164
THE FIRST THREE YEARS OF THE FIVE-YEAR PERIOD. 1,165
THE AUDITOR AND THE DEPARTMENT MAY CONDUCT ANY FURTHER 1,167
AUDITS OR ANALYSES NECESSARY TO ASSESS ANY DISTRICT'S FISCAL 1,168
CONDITION AND SHALL IMMEDIATELY NOTIFY ANY DISTRICT OF ANY 1,170
POTENTIAL TO INCUR A DEFICIT IN THE CURRENT FISCAL YEAR OR OF ANY 1,171
STRONG INDICATIONS THAT A DEFICIT WILL BE INCURRED IN EITHER OF
THE ENSUING TWO YEARS. 1,172
A DISTRICT NOTIFIED UNDER THIS SECTION SHALL TAKE IMMEDIATE 1,174
STEPS TO ELIMINATE ANY DEFICIT IN THE CURRENT FISCAL YEAR AND 1,175
SHALL BEGIN TO PLAN TO AVOID THE PROJECTED FUTURE DEFICITS. 1,176
(C) THE STATE BOARD OF EDUCATION, IN ACCORDANCE WITH 1,178
SECTIONS 3319.31 AND 3319.311 OF THE REVISED CODE, MAY LIMIT, 1,179
SUSPEND, OR REVOKE A LICENSE AS DEFINED UNDER SECTION 3319.31 OF 1,181
THE REVISED CODE THAT HAS BEEN ISSUED TO ANY SCHOOL EMPLOYEE
FOUND TO HAVE WILLFULLY CONTRIBUTED ERRONEOUS, INACCURATE, OR 1,182
INCOMPLETE DATA REQUIRED FOR THE SUBMISSION OF THE APPROPRIATION 1,183
MEASURE AND SPENDING PLAN REQUIRED BY THIS SECTION. 1,184
Sec. 5705.412. Notwithstanding section 5705.41 of the 1,193
Revised Code, no school district shall adopt any appropriation 1,194
measure, make any contract, give any order involving the 1,195
expenditure of money, or increase during any school year any wage 1,196
or salary schedule unless there is attached thereto a certificate 1,197
signed by the treasurer and president of the board of education 1,198
and the superintendent that the school district has in effect for 1,199
the remainder of the fiscal year and the succeeding fiscal year 1,200
the authorization to levy taxes including the renewal or 1,201
replacement of existing levies which, when combined with the 1,202
estimated revenue from all other sources available to the 1,203
district at the time of certification, are sufficient to provide 1,204
the operating revenues necessary to enable the district to 1,205
operate MAINTAIN ALL PERSONNEL, PROGRAMS, AND SERVICES ESSENTIAL 1,206
TO THE PROVISION OF an adequate educational program for all the 1,207
days set forth in its adopted school calendars for the current 1,208
30
fiscal year and for a number of days in the succeeding fiscal 1,209
year equal to the number of days instruction was held or is 1,210
scheduled for the current fiscal year. However, a certificate 1,212
attached to an appropriation measure under this section shall 1,213
cover only the fiscal year in which the appropriation measure is 1,214
effective and shall not consider the renewal or replacement of an 1,215
existing levy as the authority to levy taxes that are subject to 1,216
appropriation in the current fiscal year unless the renewal or 1,217
replacement levy has been approved by the electors and is subject 1,218
to appropriation in the current fiscal year and a. IN ADDITION, 1,219
A certificate attached, in accordance with this section, to any 1,221
contract shall cover the term of the contract or the current
fiscal year plus the two immediately succeeding fiscal years, 1,222
whichever period of years is greater. If the board of education 1,224
has not adopted a school calendar for the school year beginning 1,225
on the first day of the fiscal year in which a certificate is 1,226
required, the certificate attached to an appropriation measure 1,227
shall include the number of days on which instruction was held in 1,228
the preceding fiscal year and other certificates required under 1,229
this section shall include that number of days for the fiscal 1,230
year in which the certificate is required and the succeeding 1,231
fiscal year. Every contract made, order given, or schedule 1,232
adopted or put into effect without such a certificate shall be 1,233
void, and no payment of any amount due thereon shall be made. 1,234
The department of education and the auditor of state jointly 1,236
shall develop rules governing the methods by which treasurers, 1,237
presidents of boards of education, and superintendents shall 1,238
estimate revenue and determine whether such revenue is sufficient 1,239
to provide necessary operating revenue for the purpose of making 1,240
certifications required by this section. The department of 1,241
education shall adopt the jointly developed rules. 1,243
The auditor of state shall be responsible for determining 1,246
whether school districts are in compliance with this section. At 1,248
the time a school district is audited pursuant to section 117.11 1,249
31
of the Revised Code, the auditor of state shall review each 1,250
certificate issued under this section since the district's last 1,251
audit, and the appropriation measure, contract, order, or wage 1,252
and salary schedule to which such certificate was attached. This 1,253
provision shall not preclude any court from making a 1,254
determination regarding compliance with this section. If 1,255
noncompliance is determined, the provisions of section 117.28 of 1,256
the Revised Code shall have effect. 1,257
The treasurer shall forward a copy of each certificate of 1,259
available resources required under this section to the auditor of 1,260
any county in which a part of the district is located. The 1,261
county auditor shall not distribute property taxes or any payment 1,262
under Chapter 3317. of the Revised Code to a school district that 1,263
has not forwarded copies of all such certificates. If a county 1,264
auditor determines that a copy of a certificate has not been 1,265
forwarded as required, or has reason to believe that a 1,266
certificate for which a copy has been forwarded contains false 1,267
statements or that a certificate has not been signed and attached 1,268
to an appropriation measure, contract, order, or wage and salary 1,269
schedule as required by this section, the auditor shall provide 1,270
immediate written notification to the superintendent of public 1,271
instruction. In the case of a certificate which the auditor has 1,272
reason to believe contains false information or the failure to 1,273
sign and attach a certificate as required, the auditor shall also 1,274
provide immediate written notification to the auditor of state 1,275
and the county prosecuting attorney, city director of law, or 1,276
other chief law officer of the district. 1,277
This section does not apply to any contract, order, or 1,279
increase in any wage or salary schedule that is necessary in 1,280
order to enable a board of education to comply with division (B) 1,281
of section 3317.13 of the Revised Code, provided the contract, 1,282
order, or increase does not exceed the amount required to be paid 1,283
to be in compliance with such division. 1,284
Any officer, employee, or other person who knowingly 1,286
32
expends or authorizes the expenditure of any public funds or 1,287
knowingly authorizes or executes any contract, order, or schedule 1,288
contrary to this section, knowingly expends or authorizes the 1,289
expenditure of any public funds on the void contract, order, or 1,290
schedule, or knowingly issues a certificate under this section 1,291
which contains any false statements is liable to the school 1,292
district for the full amount paid from the district's funds on 1,293
the contract, order, or schedule. The officer, employee, or 1,294
other person is jointly and severally liable in person and upon 1,295
any official bond that the officer, employee, or other person has 1,297
given to the school district to the extent of any payments on the 1,298
void claim, not to exceed twenty thousand dollars. However, no 1,299
officer, employee, or other person shall be liable for a mistaken 1,300
estimate of available resources made in good faith and based upon 1,301
reasonable grounds. If an officer, employee, or other person is 1,302
found to have complied with rules adopted by the department of 1,303
education under this section governing methods by which revenue 1,304
shall be estimated and determined sufficient to provide necessary 1,305
operating revenue for the purpose of making certifications 1,306
required by this section, the officer, employee, or other person 1,307
shall not be liable under this section if the estimates and 1,308
determinations made according to those rules do not, in fact, 1,309
conform with actual revenue. The prosecuting attorney of the 1,311
county, the city director of law, or other chief law officer of 1,312
the district shall enforce this liability by civil action brought 1,313
in any court of appropriate jurisdiction in the name of and on 1,314
behalf of the school district. If the prosecuting attorney, city 1,315
director of law, or other chief law officer of the district 1,316
fails, upon the written request of any taxpayer, to institute 1,317
action for the enforcement of the liability, the taxpayer may 1,318
institute the action in the taxpayer's own name in behalf of the 1,320
subdivision.
This section does not require the attachment of an 1,322
additional certificate beyond that required by section 5705.41 of 1,323
33
the Revised Code for any purchase order, for current payrolls of, 1,324
or contracts of employment with, regular employees or officers. 1,325
This section does not require the attachment of a 1,327
certificate to a temporary appropriation measure if all of the 1,328
following apply: 1,329
(A) The amount appropriated does not exceed twenty-five 1,331
per cent of the total amount from all sources available for 1,332
expenditure from any fund during the preceding fiscal year; 1,333
(B) The measure will not be in effect on or after the 1,335
thirtieth day following the earliest date on which the district 1,336
may pass an annual appropriation measure; 1,337
(C) An amended official certificate of estimated resources 1,339
for the current year, if required, has not been certified to the 1,340
board of education under division (B) of section 5705.36 of the 1,341
Revised Code. 1,342
Section 2. That existing sections 3313.94, 3316.03, 1,344
3316.07, 3319.17, 5705.29, 5705.38, 5705.391, and 5705.412 of the 1,345
Revised Code and Section 50.51 of Am. Sub. H.B. 215 of the 122nd 1,347
General Assembly are hereby repealed.
Section 3. That section 133.301 of the Revised Code is 1,349
hereby repealed, effective June 30, 2002. 1,350
Section 4. Section 5705.412 of the Revised Code, as 1,352
amended by this act, shall take effect July 1, 1998. 1,353
Section 5. Section 5705.29 of the Revised Code is 1,355
presented in this act as a composite of the section as amended by 1,356
both Am. Sub. H.B. 86 and Sub. H.B. 194 of the 121st General 1,357
Assembly, with the new language of neither of the acts shown in 1,359
capital letters. This is in recognition of the principle stated 1,360
in division (B) of section 1.52 of the Revised Code that such 1,361
amendments are to be harmonized where not substantively 1,362
irreconcilable and constitutes a legislative finding that such is 1,363
the resulting version in effect prior to the effective date of 1,364
this act.
Section 6. By December 31, 1997, pursuant to division (B) 1,366
34
of section 3301.07 of the Revised Code, the State Board of 1,367
Education shall develop and require each school district to 1,368
prepare and make available to the public year-to-year financial 1,369
comparisons for at least five years for the district using
standardized financial reporting forms that are understandable to 1,370
the average citizen. 1,371
Section 7. The rules required to be adopted by the Auditor 1,373
of State and the Department of Education under division (K) of 1,374
section 5705.29 of the Revised Code, as amended by this act, 1,375
shall be adopted not later than June 30, 1998.
Section 8. The Department of Education shall, not later 1,377
than March 31, 1998, develop the rules that will be required 1,378
under section 5705.412 of the Revised Code once that section 1,379
takes effect, as amended by this act. However, such rules shall 1,380
not go into effect until July 1, 1998. 1,381
Section 9. The responsibilities imposed upon the Office of 1,383
Education Accountability and Productivity and its director and 1,384
governing board pursuant to section 3301.85 of the Revised Code 1,385
do not apply unless and until the General Assembly makes 1,386
appropriations sufficient for such purpose.