As Introduced

127th General Assembly Regular Session 2007-2008

H. B. No. 454

Representative Brady 

Cosponsors: Representatives Brown, Harwood, Heard, Letson, Luckie, Lundy, Skindell, Stewart, D., Strahorn, Williams, B., Yuko 

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A BILL

To amend sections 3313.41, 3314.013, 3314.014,

1

3314.02, 3314.021, 3314.051, and 3318.08, to enact

2

section 3314.027, and to repeal sections 3314.016

3

and 3314.017 of the Revised Code to establish a

4

moratorium on new "brick and mortar" community

5

schools until July 1, 2010, to require community

6

school operators to be nonprofit entities, and to

7

eliminate the requirement that school districts

8

offer property suitable for classroom space for

9

sale to community schools under certain

10

conditions.

11

BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO:

Section 1.  That sections 3313.41, 3314.013, 3314.014,	12
3314.02, 3314.021, 3314.051, and 3318.08 be amended and section	13
3314.027 of the Revised Code be enacted to read as follows:	14

Sec. 3313.41.  (A) Except as provided in divisions (C), (D),	15
and (F), and (G) of this section, when a board of education	16
decides to dispose of real or personal property that it owns in	17
its corporate capacity and that exceeds in value ten thousand	18
dollars, it shall sell the property at public auction, after	19
giving at least thirty days' notice of the auction by publication	20
in a newspaper of general circulation or by posting notices in	21
five of the most public places in the school district in which the	22
property, if it is real property, is situated, or, if it is	23
personal property, in the school district of the board of	24
education that owns the property. The board may offer real	25
property for sale as an entire tract or in parcels.	26

(B) When the board of education has offered real or personal	27
property for sale at public auction at least once pursuant to	28
division (A) of this section, and the property has not been sold,	29
the board may sell it at a private sale. Regardless of how it was	30
offered at public auction, at a private sale, the board shall, as	31
it considers best, sell real property as an entire tract or in	32
parcels, and personal property in a single lot or in several lots.	33

(C) If a board of education decides to dispose of real or	34
personal property that it owns in its corporate capacity and that	35
exceeds in value ten thousand dollars, it may sell the property to	36
the adjutant general; to any subdivision or taxing authority as	37
respectively defined in divisions (A) and (C) of section 5705.01	38
of the Revised Code, township park district, board of park	39
commissioners established under Chapter 755. of the Revised Code,	40
or park district established under Chapter 1545. of the Revised	41
Code; to a wholly or partially tax-supported university,	42
university branch, or college; or to the board of trustees of a	43
school district library, upon such terms as are agreed upon. The	44
sale of real or personal property to the board of trustees of a	45
school district library is limited, in the case of real property,	46
to a school district library within whose boundaries the real	47
property is situated, or, in the case of personal property, to a	48
school district library whose boundaries lie in whole or in part	49
within the school district of the selling board of education.	50

(D) When a board of education decides to trade as a part or	51
an entire consideration, an item of personal property on the	52
purchase price of an item of similar personal property, it may	53
trade the same upon such terms as are agreed upon by the parties	54
to the trade.	55

(E) The president and the treasurer of the board of education	56
shall execute and deliver deeds or other necessary instruments of	57
conveyance to complete any sale or trade under this section.	58

(F) When a board of education has identified a parcel of real	59
property that it determines is needed for school purposes, the	60
board may, upon a majority vote of the members of the board,	61
acquire that property by exchanging real property that the board	62
owns in its corporate capacity for the identified real property or	63
by using real property that the board owns in its corporate	64
capacity as part or an entire consideration for the purchase price	65
of the identified real property. Any exchange or acquisition made	66
pursuant to this division shall be made by a conveyance executed	67
by the president and the treasurer of the board.	68

(G)(1) When a school district board of education decides to	69
dispose of real property suitable for use as classroom space,	70
prior to disposing of that property under divisions (A) to (F) of	71
this section, it shall first offer that property for sale to the	72
governing authorities of the start-up community schools	73
established under Chapter 3314. of the Revised Code located within	74
the territory of the school district, at a price that is not	75
higher than the appraised fair market value of that property. If	76
more than one community school governing authority accepts the	77
offer made by the school district board, the board shall sell the	78
property to the governing authority that accepted the offer first	79
in time. If no community school governing authority accepts the	80
offer within sixty days after the offer is made by the school	81
district board, the board may dispose of the property in the	82
applicable manner prescribed under divisions (A) to (F) of this	83
section.	84

(2) When a school district board of education has not used	85
real property suitable for classroom space for academic	86
instruction, administration, storage, or any other educational	87
purpose for one full school year and has not adopted a resolution	88
outlining a plan for using that property for any of those purposes	89
within the next three school years, it shall offer that property	90
for sale to the governing authorities of the start-up community	91
schools established under Chapter 3314. of the Revised Code	92
located within the territory of the school district, at a price	93
that is not higher than the appraised fair market value of that	94
property. If more than one community school governing authority	95
accepts the offer made by the school district board, the board	96
shall sell the property to the governing authority that accepted	97
the offer first in time.	98

(H) When a school district board of education has property	99
that the board, by resolution, finds is not needed for school	100
district use, is obsolete, or is unfit for the use for which it	101
was acquired, the board may donate that property in accordance	102
with this division if the fair market value of the property is, in	103
the opinion of the board, two thousand five hundred dollars or	104
less.	105

The property may be donated to an eligible nonprofit	106
organization that is located in this state and is exempt from	107
federal income taxation pursuant to 26 U.S.C. 501(a) and (c)(3).	108
Before donating any property under this division, the board shall	109
adopt a resolution expressing its intent to make unneeded,	110
obsolete, or unfit-for-use school district property available to	111
these organizations. The resolution shall include guidelines and	112
procedures the board considers to be necessary to implement the	113
donation program and shall indicate whether the school district	114
will conduct the donation program or the board will contract with	115
a representative to conduct it. If a representative is known when	116
the resolution is adopted, the resolution shall provide contact	117
information such as the representative's name, address, and	118
telephone number.	119

The resolution shall include within its procedures a	120
requirement that any nonprofit organization desiring to obtain	121
donated property under this division shall submit a written notice	122
to the board or its representative. The written notice shall	123
include evidence that the organization is a nonprofit organization	124
that is located in this state and is exempt from federal income	125
taxation pursuant to 26 U.S.C. 501(a) and (c)(3); a description of	126
the organization's primary purpose; a description of the type or	127
types of property the organization needs; and the name, address,	128
and telephone number of a person designated by the organization's	129
governing board to receive donated property and to serve as its	130
agent.	131

After adoption of the resolution, the board shall publish, in	132
a newspaper of general circulation in the school district, notice	133
of its intent to donate unneeded, obsolete, or unfit-for-use	134
school district property to eligible nonprofit organizations. The	135
notice shall include a summary of the information provided in the	136
resolution and shall be published at least twice. The second and	137
any subsequent notice shall be published not less than ten nor	138
more than twenty days after the previous notice. A similar notice	139
also shall be posted continually in the board's office, and, if	140
the school district maintains a web site on the internet, the	141
notice shall be posted continually at that web site.	142

The board or its representatives shall maintain a list of all	143
nonprofit organizations that notify the board or its	144
representative of their desire to obtain donated property under	145
this division and that the board or its representative determines	146
to be eligible, in accordance with the requirements set forth in	147
this section and in the donation program's guidelines and	148
procedures, to receive donated property.	149

The board or its representative also shall maintain a list of	150
all school district property the board finds to be unneeded,	151
obsolete, or unfit for use and to be available for donation under	152
this division. The list shall be posted continually in a	153
conspicuous location in the board's office, and, if the school	154
district maintains a web site on the internet, the list shall be	155
posted continually at that web site. An item of property on the	156
list shall be donated to the eligible nonprofit organization that	157
first declares to the board or its representative its desire to	158
obtain the item unless the board previously has established, by	159
resolution, a list of eligible nonprofit organizations that shall	160
be given priority with respect to the item's donation. Priority	161
may be given on the basis that the purposes of a nonprofit	162
organization have a direct relationship to specific school	163
district purposes of programs provided or administered by the	164
board. A resolution giving priority to certain nonprofit	165
organizations with respect to the donation of an item of property	166
shall specify the reasons why the organizations are given that	167
priority.	168

Members of the board shall consult with the Ohio ethics	169
commission, and comply with Chapters 102. and 2921. of the Revised	170
Code, with respect to any donation under this division to a	171
nonprofit organization of which a board member, any member of a	172
board member's family, or any business associate of a board member	173
is a trustee, officer, board member, or employee.	174

Sec. 3314.013.  (A)(1) Until July 1, 2000, no more than	175
seventy-five contracts between start-up schools and the state	176
board of education may be in effect outside the pilot project area	177
at any time under this chapter.	178

(2) After July 1, 2000, and until July 1, 2001, no more than	179
one hundred twenty-five contracts between start-up schools and the	180
state board of education may be in effect outside the pilot	181
project area at any time under this chapter.	182

(3) This division applies only to contracts between start-up	183
schools and the state board of education and contracts between	184
start-up schools and entities described in divisions (C)(1)(b) to	185
(f) of section 3314.02 of the Revised Code.	186

Until July 1, 2005, not more than two hundred twenty-five	187
contracts to which this division applies may be in effect at any	188
time under this chapter.	189

(4) This division applies only to contracts between start-up	190
schools and entities described in divisions (C)(1)(b) to (f) of	191
section 3314.02 of the Revised Code.	192

Except as otherwise provided in section 3314.014 of the	193
Revised Code, after July 1, 2005, and until July 1, 2007, the	194
number of contracts to which this division applies in effect at	195
any time under this chapter shall be not more than thirty plus the	196
number of such contracts with schools that were open for operation	197
as of May 1, 2005.	198

(5) This division applies only to contracts between a	199
conversion school that is an internet- or computer-based community	200
school or a start-up school and the board of education of the	201
school district in which the school is or is proposed to be	202
located.	203

Except as otherwise provided in section 3314.014 of the	204
Revised Code, until July 1, 2007, the number of contracts to which	205
this division applies in effect at any time under this chapter	206
shall be not more than thirty plus the number of such contracts	207
with schools that were open for operation as of May 1, 2005.	208

(6)Division (A)(1) of this section applies only to community	209
schools that are not internet- or computer-based community	210
schools.	211

Until July 1, 2010, no start-up or conversion community	212
school subject to this division shall operate unless the school	213
was open for instruction as of May 1, 2008. No entity described in	214
division (C)(1) of section 3314.02 of the Revised Code shall enter	215
into a contract to sponsor a community school subject to this	216
division between May 1, 2008, and July 1, 2010, except that an	217
entity may renew a contract that the entity entered into with a	218
community school subject to this division prior to May 1, 2008, if	219
the school was open for operation as of that date.	220

If a sponsor entered into a contract with a community school	221
subject to this division but the school was not open for operation	222
as of May 1, 2008, the contract shall be void and the entity shall	223
not enter into another contract with the school until July 1,	224
2010.	225

(2) Until the effective date of any standards enacted by the	226
general assembly governing the operation of internet- or	227
computer-based community schools, no internet- or computer-based	228
community school shall operate unless the school was open for	229
instruction as of May 1, 2005. No entity described in division	230
(C)(1) of section 3314.02 of the Revised Code shall enter into a	231
contract to sponsor an internet- or computer-based community	232
school, including a conversion school, between May 1, 2005, and	233
the effective date of any standards enacted by the general	234
assembly governing the operation of internet- or computer-based	235
community schools, except as follows:	236

(a) Anythat an entity described in division (C)(1) of that	237
section may renew a contract that the entity entered into with an	238
internet- or computer-based community school prior to May 1, 2005,	239
if the school was open for operation as of that date.	240

(b) Any entity described in divisions (C)(1)(a) to (e) of	241
that section may assume sponsorship of an existing internet- or	242
computer-based community school that was formerly sponsored by	243
another entity and may enter into a contract with that community	244
school in accordance with section 3314.03 of the Revised Code.	245

(c) Any entity described in division (C)(1)(f) of that	246
section may assume sponsorship of an existing internet- or	247
computer-based community school in accordance with division (A)(7)	248
of this section and may enter into a contract with that community	249
school in accordance with section 3314.03 of the Revised Code.	250

If a sponsor entered into a contract with an internet- or	251
computer-based community school, including a conversion school,	252
but the school was not open for operation as of May 1, 2005, the	253
contract shall be void and the entity shall not enter into another	254
contract with the school until the effective date of any standards	255
enacted by the general assembly governing the operation of	256
internet- or computer-based community schools.	257

(7) Until July 1, 2005, any entity described in division	258
(C)(1)(f) of section 3314.02 of the Revised Code may sponsor only	259
a community school that formerly was sponsored by the state board	260
of education under division (C)(1)(d) of that section, as it	261
existed prior to April 8, 2003. After July 1, 2005, any such	262
entity may assume sponsorship of any existing community school,	263
and may sponsor any new community school that is not an internet-	264
or computer-based community school. Beginning on the effective	265
date of any standards enacted by the general assembly governing	266
the operation of internet- or computer-based community schools,	267
any such entity may sponsor a new internet- or computer-based	268
community school.	269

(8)(3) Nothing in division (A) of this section prohibits a	270
community school from increasing the number of grade levels it	271
offers.	272

(B) Within twenty-four hours of a request by any person, the	273
superintendent of public instruction shall indicate the number of	274
preliminary agreements for start-up schools currently outstanding	275
and the number of contracts for these schools in effect at the	276
time of the request.	277

(C) It is the intent of the general assembly to consider	278
whether to provide limitations on the number of start-up community	279
schools after July 1, 2001, following its examination of the	280
results of the studies by the legislative office of education	281
oversight required under Section 50.39 of Am. Sub. H.B. No. 215 of	282
the 122nd general assembly and Section 50.52.2 of Am. Sub. H.B.	283
No. 215 of the 122nd general assembly, as amended by Am. Sub. H.B.	284
No. 770 of the 122nd general assembly.	285

Sec. 3314.014. (A) As used in this chapter, "operator" means	286
either of the following:	287

(1) An individual or organization(A) A nonprofit entity that	288
manages the daily operations of a community school pursuant to a	289
contract between the operator and the school's governing	290
authority;	291

(2)(B) A nonprofit organization that provides programmatic	292
oversight and support to a community school under a contract with	293
the school's governing authority and that retains the right to	294
terminate its affiliation with the school if the school fails to	295
meet the organization's quality standards.	296

(B)(1) Notwithstanding the limit prescribed by division	297
(A)(4) of section 3314.013 of the Revised Code, a start-up school	298
sponsored by an entity described in divisions (C)(1)(b) to (f) of	299
section 3314.02 of the Revised Code may be established after the	300
date that limit is reached, provided the school's governing	301
authority enters into a contract with an operator permitted to	302
manage the school under division (C) of this section.	303

(2) Notwithstanding the limit prescribed by division (A)(5)	304
of section 3314.013 of the Revised Code, a conversion school that	305
is an internet- or computer-based community school or a start-up	306
school sponsored by the school district in which the school is or	307
is proposed to be located may be established after the date that	308
limit is reached, provided the school's governing authority enters	309
into a contract with an operator permitted to manage the school	310
under division (C) of this section. However, a conversion school	311
that is an internet- or computer-based community school may be	312
established after that date only if the prohibition prescribed by	313
division (A)(6) of section 3314.013 of the Revised Code is no	314
longer in effect.	315

(C) An operator may enter into contracts with the governing	316
authorities of community schools established after the date the	317
limit prescribed by division (A)(4) or (5) of section 3314.013 of	318
the Revised Code, as applicable, is reached, provided the total	319
number of schools for which the operator enters into such	320
contracts, excluding conversion schools that are not internet- or	321
computer-based community schools, does not exceed the number of	322
community schools managed by the operator in Ohio or other states	323
on the applicable date that are rated excellent, effective, or in	324
need of continuous improvement pursuant to section 3302.03 of the	325
Revised Code or perform comparably to schools so rated, as	326
determined by the department of education.	327

(D) Notwithstanding the limit prescribed by division (A)(4)	328
of section 3314.013 of the Revised Code, after the date the limit	329
prescribed in that division is reached, the governing authority of	330
a start-up school sponsored by an entity described in divisions	331
(C)(1)(b) to (f) of section 3314.02 of the Revised Code may	332
establish one additional school serving the same grade levels and	333
providing the same educational program as the current start-up	334
school and may open that additional school in the 2006-2007 school	335
year, if both of the following conditions are met:	336

(1) The governing authority entered into another contract	337
with the same sponsor or a different sponsor described in	338
divisions (C)(1)(b) to (f) of section 3314.02 of the Revised Code	339
and filed a copy of that contract with the superintendent of	340
public instruction prior to March 15, 2006.	341

(2) The governing authority's current school satisfies all of	342
the following conditions:	343

(a) The school currently is rated as excellent or effective	344
pursuant to section 3302.03 of the Revised Code.	345

(b) The school made adequate yearly progress, as defined in	346
section 3302.01 of the Revised Code, for the previous school year.	347

(c) The school has been in operation for at least four school	348
years.	349

(d) The school is not managed by an operator.

350

Sec. 3314.02.  (A) As used in this chapter:

351

(1) "Sponsor" means an entity listed in division (C)(1) of	352
this section, which has been approved by the department of	353
education to sponsor community schools and with which the	354
governing authority of the proposed community school enters into a	355
contract pursuant to this section.	356

(2) "Pilot project area" means the school districts included	357
in the territory of the former community school pilot project	358
established by former Section 50.52 of Am. Sub. H.B. No. 215 of	359
the 122nd general assembly.	360

(3) "Challenged school district" means any of the following:

361

(a) A school district that is part of the pilot project area;

362

(b) A school district that is either in a state of academic	363
emergency or in a state of academic watch under section 3302.03 of	364
the Revised Code;	365

(c) A big eight school district.

366

(4) "Big eight school district" means a school district that	367
for fiscal year 1997 had both of the following:	368

(a) A percentage of children residing in the district and	369
participating in the predecessor of Ohio works first greater than	370
thirty per cent, as reported pursuant to section 3317.10 of the	371
Revised Code;	372

(b) An average daily membership greater than twelve thousand,	373
as reported pursuant to former division (A) of section 3317.03 of	374
the Revised Code.	375

(5) "New start-up school" means a community school other than	376
one created by converting all or part of an existing public	377
school, as designated in the school's contract pursuant to	378
division (A)(17) of section 3314.03 of the Revised Code.	379

(6) "Urban school district" means one of the state's	380
twenty-one urban school districts as defined in division (O) of	381
section 3317.02 of the Revised Code as that section existed prior	382
to July 1, 1998.	383

(7) "Internet- or computer-based community school" means a	384
community school established under this chapter in which the	385
enrolled students work primarily from their residences on	386
assignments in nonclassroom-based learning opportunities provided	387
via an internet- or other computer-based instructional method that	388
does not rely on regular classroom instruction or via	389
comprehensive instructional methods that include internet-based,	390
other computer-based, and noncomputer-based learning	391
opportunities.	392

(B) Any person or group of individuals may initially propose	393
under this division the conversion of all or a portion of a public	394
school to a community school. The proposal shall be made to the	395
board of education of the city, local, or exempted village school	396
district in which the public school is proposed to be converted.	397
Upon receipt of a proposal, a board may enter into a preliminary	398
agreement with the person or group proposing the conversion of the	399
public school, indicating the intention of the board of education	400
to support the conversion to a community school. A proposing	401
person or group that has a preliminary agreement under this	402
division may proceed to finalize plans for the school, establish a	403
governing authority for the school, and negotiate a contract with	404
the board of education. Provided the proposing person or group	405
adheres to the preliminary agreement and all provisions of this	406
chapter, the board of education shall negotiate in good faith to	407
enter into a contract in accordance with section 3314.03 of the	408
Revised Code and division (C) of this section.	409

(C)(1) Any person or group of individuals may propose under	410
this division the establishment of a new start-up school to be	411
located in a challenged school district. The proposal may be made	412
to any of the following entities:	413

(a) The board of education of the district in which the	414
school is proposed to be located;	415

(b) The board of education of any joint vocational school	416
district with territory in the county in which is located the	417
majority of the territory of the district in which the school is	418
proposed to be located;	419

(c) The board of education of any other city, local, or	420
exempted village school district having territory in the same	421
county where the district in which the school is proposed to be	422
located has the major portion of its territory;	423

(d) The governing board of any educational service center, as	424
long as the proposed school will be located in a county within the	425
territory of the service center or in a county contiguous to such	426
county;	427

(e) A sponsoring authority designated by the board of	428
trustees of any of the thirteen state universities listed in	429
section 3345.011 of the Revised Code or the board of trustees	430
itself as long as a mission of the proposed school to be specified	431
in the contract under division (A)(2) of section 3314.03 of the	432
Revised Code and as approved by the department of education under	433
division (B)(2) of section 3314.015 of the Revised Code will be	434
the practical demonstration of teaching methods, educational	435
technology, or other teaching practices that are included in the	436
curriculum of the university's teacher preparation program	437
approved by the state board of education;	438

(f) Any qualified tax-exempt entity under section 501(c)(3)	439
of the Internal Revenue Code as long as all of the following	440
conditions are satisfied:	441

(i) The entity has been in operation for at least five years	442
prior to applying to be a community school sponsor.	443

(ii) The entity has assets of at least five hundred thousand	444
dollars and a demonstrated record of financial responsibility.	445

(iii) The department of education has determined that the	446
entity is an education-oriented entity under division (B)(3) of	447
section 3314.015 of the Revised Code and the entity has a	448
demonstrated record of successful implementation of educational	449
programs.	450

(iv) The entity is not a community school.

451

Any entity described in division (C)(1) of this section may	452
enter into a preliminary agreement pursuant to division (C)(2) of	453
this section with the proposing person or group.	454

(2) A preliminary agreement indicates the intention of an	455
entity described in division (C)(1) of this section to sponsor the	456
community school. A proposing person or group that has such a	457
preliminary agreement may proceed to finalize plans for the	458
school, establish a governing authority as described in division	459
(E) of this section for the school, and negotiate a contract with	460
the entity. Provided the proposing person or group adheres to the	461
preliminary agreement and all provisions of this chapter, the	462
entity shall negotiate in good faith to enter into a contract in	463
accordance with section 3314.03 of the Revised Code.	464

(3) A new start-up school that is established in a school	465
district while that district is either in a state of academic	466
emergency or in a state of academic watch under section 3302.03 of	467
the Revised Code may continue in existence once the school	468
district is no longer in a state of academic emergency or academic	469
watch, provided there is a valid contract between the school and a	470
sponsor.	471

(4) A copy of every preliminary agreement entered into under	472
this division shall be filed with the superintendent of public	473
instruction.	474

(D) A majority vote of the board of a sponsoring entity and a	475
majority vote of the members of the governing authority of a	476
community school shall be required to adopt a contract and convert	477
the public school to a community school or establish the new	478
start-up school. Beginning September 29, 2005, adoption of the	479
contract shall occur not later than the fifteenth day of March,	480
and signing of the contract shall occur not later than the	481
fifteenth day of May, prior to the school year in which the school	482
will open. The governing authority shall notify the department of	483
education when the contract has been signed. Subject to sections	484
section 3314.013, 3314.014, 3314.016, and 3314.017 of the Revised	485
Code, an unlimited number of community schools may be established	486
in any school district provided that a contract is entered into	487
for each community school pursuant to this chapter.	488

(E)(1) As used in this division, "immediate relatives" are	489
limited to spouses, children, parents, grandparents, siblings, and	490
in-laws.	491

Each new start-up community school established under this	492
chapter shall be under the direction of a governing authority	493
which shall consist of a board of not less than five individuals.	494

No person shall serve on the governing authority or operate	495
the community school under contract with the governing authority	496
so long as the person owes the state any money or is in a dispute	497
over whether the person owes the state any money concerning the	498
operation of a community school that has closed.	499

(2) No person shall serve on the governing authorities of	500
more than two start-up community schools at the same time.	501

(3) No present or former member, or immediate relative of a	502
present or former member, of the governing authority of any	503
community school established under this chapter shall be an owner,	504
employee, or consultant of any nonprofit or for-profit operator of	505
a community school, unless at least one year has elapsed since the	506
conclusion of the person's membership.	507

(F) Nothing in this chapter shall be construed to permit the	508
establishment of a community school in more than one school	509
district under the same contract.	510

(G)(1) A new start-up school that is established prior to	511
August 15, 2003, in an urban school district that is not also a	512
big-eight school district may continue to operate after that date	513
and the contract between the school's governing authority and the	514
school's sponsor may be renewed, as provided under this chapter,	515
after that date, but no additional new start-up schools may be	516
established in such a district unless the district is a challenged	517
school district as defined in this section as it exists on and	518
after that date.	519

(2) A community school that was established prior to June 29,	520
1999, and is located in a county contiguous to the pilot project	521
area and in a school district that is not a challenged school	522
district may continue to operate after that date, provided the	523
school complies with all provisions of this chapter. The contract	524
between the school's governing authority and the school's sponsor	525
may be renewed, but no additional start-up community school may be	526
established in that district unless the district is a challenged	527
school district.	528

(3) Any educational service center that, on the effective	529
date of this amendmentJune 30, 2007, sponsors a community school	530
that is not located in a county within the territory of the	531
service center or in a county contiguous to such county may	532
continue to sponsor that community school on and after the	533
effective date of this amendmentJune 30, 2007, and may renew its	534
contract with the school. However, the educational service center	535
shall not enter into a contract with any additional community	536
school unless the school is located in a county within the	537
territory of the service center or in a county contiguous to such	538
county.	539

Sec. 3314.021. (A) This section applies to any entity that is	540
exempt from taxation under section 501(c)(3) of the Internal	541
Revenue Code and that satisfies the conditions specified in	542
divisions (C)(1)(f)(ii) and (iii) of section 3314.02 of the	543
Revised Code but does not satisfy the condition specified in	544
division (C)(1)(f)(i) of that section.	545

(B) Notwithstanding division (C)(1)(f)(i) of section 3314.02	546
of the Revised Code, an entity described in division (A) of this	547
section may do both of the following without obtaining the	548
department of education's approval of its sponsorship under	549
division (B)(1) of section 3314.015 of the Revised Code:	550

(1) Succeed the board of trustees of a state university	551
located in the pilot project area or that board's designee as the	552
sponsor of a community school established under this chapter;	553

(2) Continue to sponsor that school in conformance with the	554
terms of the contract between the board of trustees or its	555
designee and the governing authority of the community school and	556
renew that contract as provided in division (E) of section 3314.03	557
of the Revised Code.	558

(C) The entity that succeeds the board of trustees or the	559
board's designee as sponsor of a community school under division	560
(B) of this section also may enter into contracts to sponsor	561
other community schools located in any challenged school district,	562
without obtaining the department's approval of its sponsorship	563
under division (B)(1) of section 3314.015 of the Revised Code, and	564
not subject to the restriction of division (A)(7) of section	565
3314.013 of the Revised Code, as long as the contracts conform	566
with and the entity complies with all other requirements of this	567
chapter.	568

Sec. 3314.027. If, on the effective date of this section, the	569
governing authority of a community school has a contract with an	570
operator that is not a nonprofit entity as required by section	571
3314.014 of the Revised Code, as it exists on and after the	572
effective date of this section, the governing authority shall not	573
be subject to the requirement that an operator of a community	574
school be a nonprofit entity until the expiration of that	575
contract. If the governing authority elects to continue	576
management of the school by an operator after the expiration of	577
that contract, the governing authority shall enter into a contract	578
with a new operator that complies with section 3314.014 of the	579
Revised Code, as it exists on and after the effective date of	580
this section. Section 3314.026 of the Revised Code shall not	581
apply to any operator that is not a nonprofit entity and whose	582
contract is not renewed pursuant to this section.	583

Sec. 3314.051.  (A) When the governing authority of a	584
community school that acquired real property from a school	585
district pursuant to division (G)(2) of section 3313.41 of the	586
Revised Code, as it existed prior to the effective date of this	587
amendment, decides to dispose of that property, it first shall	588
offer that property for sale to the school district board of	589
education from which it acquired the property, at a price that is	590
not higher than the appraised fair market value of that property.	591
If the district board does not accept the offer within sixty days	592
after the offer is made, the community school may dispose of the	593
property in another lawful manner.	594

(B) When a community school that acquired real property from	595
a school district pursuant to division (G)(2) of section 3313.41	596
of the Revised Code, as it existed prior to the effective date of	597
this amendment, permanently closes, in distributing the school's	598
assets under section 3314.074 of the Revised Code, that property	599
first shall be offered for sale to the school district board of	600
education from which the community school acquired the property,	601
at a price that is not higher than the appraised fair market	602
value of that property. If the district board does not accept the	603
offer within sixty days after the offer is made, the property may	604
be disposed in another lawful manner.	605

Sec. 3318.08.  Except in the case of a joint vocational	606
school district that receives assistance under sections 3318.40 to	607
3318.45 of the Revised Code, if the requisite favorable vote on	608
the election is obtained, or if the school district board has	609
resolved to apply the proceeds of a property tax levy or the	610
proceeds of an income tax, or a combination of proceeds from such	611
taxes, as authorized in section 3318.052 of the Revised Code, the	612
Ohio school facilities commission, upon certification to it of	613
either the results of the election or the resolution under section	614
3318.052 of the Revised Code, shall enter into a written agreement	615
with the school district board for the construction and sale of	616
the project. In the case of a joint vocational school district	617
that receives assistance under sections 3318.40 to 3318.45 of the	618
Revised Code, if the school district board of education and the	619
school district electors have satisfied the conditions prescribed	620
in division (D)(1) of section 3318.41 of the Revised Code, the	621
commission shall enter into an agreement with the school district	622
board for the construction and sale of the project. In either	623
case, the agreement shall include, but need not be limited to, the	624
following provisions:	625

(A) The sale and issuance of bonds or notes in anticipation	626
thereof, as soon as practicable after the execution of the	627
agreement, in an amount equal to the school district's portion of	628
the basic project cost, including any securities authorized under	629
division (J) of section 133.06 of the Revised Code and dedicated	630
by the school district board to payment of the district's portion	631
of the basic project cost of the project; provided, that if at	632
that time the county treasurer of each county in which the school	633
district is located has not commenced the collection of taxes on	634
the general duplicate of real and public utility property for the	635
year in which the controlling board approved the project, the	636
school district board shall authorize the issuance of a first	637
installment of bond anticipation notes in an amount specified by	638
the agreement, which amount shall not exceed an amount necessary	639
to raise the net bonded indebtedness of the school district as of	640
the date of the controlling board's approval to within five	641
thousand dollars of the required level of indebtedness for the	642
preceding year. In the event that a first installment of bond	643
anticipation notes is issued, the school district board shall, as	644
soon as practicable after the county treasurer of each county in	645
which the school district is located has commenced the collection	646
of taxes on the general duplicate of real and public utility	647
property for the year in which the controlling board approved the	648
project, authorize the issuance of a second and final installment	649
of bond anticipation notes or a first and final issue of bonds.	650

The combined value of the first and second installment of	651
bond anticipation notes or the value of the first and final issue	652
of bonds shall be equal to the school district's portion of the	653
basic project cost. The proceeds of any such bonds shall be used	654
first to retire any bond anticipation notes. Otherwise, the	655
proceeds of such bonds and of any bond anticipation notes, except	656
the premium and accrued interest thereon, shall be deposited in	657
the school district's project construction fund. In determining	658
the amount of net bonded indebtedness for the purpose of fixing	659
the amount of an issue of either bonds or bond anticipation notes,	660
gross indebtedness shall be reduced by moneys in the bond	661
retirement fund only to the extent of the moneys therein on the	662
first day of the year preceding the year in which the controlling	663
board approved the project. Should there be a decrease in the tax	664
valuation of the school district so that the amount of	665
indebtedness that can be incurred on the tax duplicates for the	666
year in which the controlling board approved the project is less	667
than the amount of the first installment of bond anticipation	668
notes, there shall be paid from the school district's project	669
construction fund to the school district's bond retirement fund to	670
be applied against such notes an amount sufficient to cause the	671
net bonded indebtedness of the school district, as of the first	672
day of the year following the year in which the controlling board	673
approved the project, to be within five thousand dollars of the	674
required level of indebtedness for the year in which the	675
controlling board approved the project. The maximum amount of	676
indebtedness to be incurred by any school district board as its	677
share of the cost of the project is either an amount that will	678
cause its net bonded indebtedness, as of the first day of the year	679
following the year in which the controlling board approved the	680
project, to be within five thousand dollars of the required level	681
of indebtedness, or an amount equal to the required percentage of	682
the basic project costs, whichever is greater. All bonds and bond	683
anticipation notes shall be issued in accordance with Chapter 133.	684
of the Revised Code, and notes may be renewed as provided in	685
section 133.22 of the Revised Code.	686

(B) The transfer of such funds of the school district board	687
available for the project, together with the proceeds of the sale	688
of the bonds or notes, except premium, accrued interest, and	689
interest included in the amount of the issue, to the school	690
district's project construction fund;	691

(C) For all school districts except joint vocational school	692
districts that receive assistance under sections 3318.40 to	693
3318.45 of the Revised Code, the following provisions as	694
applicable:	695

(1) If section 3318.052 of the Revised Code applies, the	696
earmarking of the proceeds of a tax levied under section 5705.21	697
of the Revised Code for general permanent improvements or under	698
section 5705.218 of the Revised Code for the purpose of permanent	699
improvements, or the proceeds of a school district income tax	700
levied under Chapter 5748. of the Revised Code, or the proceeds	701
from a combination of those two taxes, in an amount to pay all or	702
part of the service charges on bonds issued to pay the school	703
district portion of the project and an amount equivalent to all or	704
part of the tax required under division (B) of section 3318.05 of	705
the Revised Code;	706

(2) If section 3318.052 of the Revised Code does not apply,	707
one of the following:	708

(a) The levy of the tax authorized at the election for the	709
payment of maintenance costs, as specified in division (B) of	710
section 3318.05 of the Revised Code;	711

(b) If the school district electors have approved a	712
continuing tax for general permanent improvements under section	713
5705.21 of the Revised Code and that tax can be used for	714
maintenance, the earmarking of an amount of the proceeds from such	715
tax for maintenance of classroom facilities as specified in	716
division (B) of section 3318.05 of the Revised Code;	717

(c) If, in lieu of the tax otherwise required under division	718
(B) of section 3318.05 of the Revised Code, the commission has	719
approved the transfer of money to the maintenance fund in	720
accordance with section 3318.051 of the Revised Code, a	721
requirement that the district board comply with the provisions	722
that section. The district board may rescind the provision	723
prescribed under division (C)(2)(c) of this section only so long	724
as the electors of the district have approved, in accordance with	725
section 3318.063 of the Revised Code, the levy of a tax for the	726
maintenance of the classroom facilities acquired under the	727
district's project and that levy continues to be collected as	728
approved by the electors.	729

(D) For joint vocational school districts that receive	730
assistance under sections 3318.40 to 3318.45 of the Revised Code,	731
provision for deposit of school district moneys dedicated to	732
maintenance of the classroom facilities acquired under those	733
sections as prescribed in section 3318.43 of the Revised Code;	734

(E) Dedication of any local donated contribution as provided	735
for under section 3318.084 of the Revised Code, including a	736
schedule for depositing such moneys applied as an offset of the	737
district's obligation to levy the tax described in division (B) of	738
section 3318.05 of the Revised Code as required under division	739
(D)(2) of section 3318.084 of the Revised Code;	740

(F) Ownership of or interest in the project during the period	741
of construction, which shall be divided between the commission and	742
the school district board in proportion to their respective	743
contributions to the school district's project construction fund;	744

(G) Maintenance of the state's interest in the project until	745
any obligations issued for the project under section 3318.26 of	746
the Revised Code are no longer outstanding;	747

(H) The insurance of the project by the school district from	748
the time there is an insurable interest therein and so long as the	749
state retains any ownership or interest in the project pursuant to	750
division (F) of this section, in such amounts and against such	751
risks as the commission shall require; provided, that the cost of	752
any required insurance until the project is completed shall be a	753
part of the basic project cost;	754

(I) The certification by the director of budget and	755
management that funds are available and have been set aside to	756
meet the state's share of the basic project cost as approved by	757
the controlling board pursuant to either section 3318.04 or	758
division (B)(1) of section 3318.41 of the Revised Code;	759

(J) Authorization of the school district board to advertise	760
for and receive construction bids for the project, for and on	761
behalf of the commission, and to award contracts in the name of	762
the state subject to approval by the commission;	763

(K) Provisions for the disbursement of moneys from the school	764
district's project account upon issuance by the commission or the	765
commission's designated representative of vouchers for work done	766
to be certified to the commission by the treasurer of the school	767
district board;	768

(L) Disposal of any balance left in the school district's	769
project construction fund upon completion of the project;	770

(M) Limitations upon use of the project or any part of it so	771
long as any obligations issued to finance the project under	772
section 3318.26 of the Revised Code are outstanding;	773

(N) Provision for vesting the state's interest in the project	774
to the school district board when the obligations issued to	775
finance the project under section 3318.26 of the Revised Code are	776
outstanding;	777

(O) Provision for deposit of an executed copy of the	778
agreement in the office of the commission;	779

(P) Provision for termination of the contract and release of	780
the funds encumbered at the time of the conditional approval, if	781
the proceeds of the sale of the bonds of the school district board	782
are not paid into the school district's project construction fund	783
and if bids for the construction of the project have not been	784
taken within such period after the execution of the agreement as	785
may be fixed by the commission;	786

(Q) Provision for the school district to maintain the project	787
in accordance with a plan approved by the commission;	788

(R)(1) For all school districts except a district undertaking	789
a project under section 3318.38 of the Revised Code or a joint	790
vocational school district undertaking a project under sections	791
3318.40 to 3318.45 of the Revised Code, provision that all state	792
funds reserved and encumbered to pay the state share of the cost	793
of the project pursuant to section 3318.03 of the Revised Code be	794
spent on the construction or acquisition of the project prior to	795
the expenditure of any funds provided by the school district to	796
pay for its share of the project cost, unless the school district	797
certifies to the commission that expenditure by the school	798
district is necessary to maintain the tax-exempt status of notes	799
or bonds issued by the school district to pay for its share of the	800
project cost or to comply with applicable temporary investment	801
periods or spending exceptions to rebate as provided for under	802
federal law in regard to those notes or bonds, in which cases, the	803
school district may commit to spend, or spend, a portion of the	804
funds it provides;	805

(2) For a school district undertaking a project under section	806
3318.38 of the Revised Code or a joint vocational school district	807
undertaking a project under sections 3318.40 to 3318.45 of the	808
Revised Code, provision that the state funds reserved and	809
encumbered and the funds provided by the school district to pay	810
the basic project cost of any segment of the project, or of the	811
entire project if it is not divided into segments, be spent on the	812
construction and acquisition of the project simultaneously in	813
proportion to the state's and the school district's respective	814
shares of that basic project cost as determined under section	815
3318.032 of the Revised Code or, if the district is a joint	816
vocational school district, under section 3318.42 of the Revised	817
Code.	818

(S) A provision stipulating that the commission may prohibit	819
the district from proceeding with any project if the commission	820
determines that the site is not suitable for construction	821
purposes. The commission may perform soil tests in its	822
determination of whether a site is appropriate for construction	823
purposes.	824

(T) A provision stipulating that, unless otherwise authorized	825
by the commission, any contingency reserve portion of the	826
construction budget prescribed by the commission shall be used	827
only to pay costs resulting from unforeseen job conditions, to	828
comply with rulings regarding building and other codes, to pay	829
costs related to design clarifications or corrections to contract	830
documents, and to pay the costs of settlements or judgments	831
related to the project as provided under section 3318.086 of the	832
Revised Code;	833

(U) Provision stipulating that for continued release of	834
project funds the school district board shall comply with section	835
3313.41 of the Revised Code throughout the project and shall	836
notify the department of education and the Ohio community school	837
association when the board plans to dispose of facilities by sale	838
under that section;	839

(V) Provision that the commission shall not approve a	840
contract for demolition of a facility until the school district	841
board has complied with section 3313.41 of the Revised Code	842
relative to that facility, unless demolition of that facility is	843
to clear a site for construction of a replacement facility	844
included in the district's project.	845

Section 2. That existing sections 3313.41, 3314.013,	846
3314.014, 3314.02, 3314.021, 3314.051, and 3318.08 and sections	847
3314.016 and 3314.017 of the Revised Code are hereby repealed.	848

Section 3.  Section 3314.014 of the Revised Code is	849
presented in this act as a composite of the section as amended by	850
both Am. Sub. H.B. 79 and Am. Sub. H.B. 276 of the 126th General	851
Assembly. The General Assembly, applying the principle stated in	852
division (B) of section 1.52 of the Revised Code that amendments	853
are to be harmonized if reasonably capable of simultaneous	854
operation, finds that the composite is the resulting version of	855
the section in effect prior to the effective date of the section	856
as presented in this act.	857