As Introduced

129th General Assembly
Regular Session
2011-2012
H. B. No. 504


Representative Huffman 

Cosponsors: Representatives Blair, Buchy, Cera, Derickson, Duffey, Stebelton, Terhar, Thompson 

A BILL
To amend sections 3318.011 and 3318.36 of the Revised 1
Code to revise the method for calculating school 2
district equity rankings for classroom facilities 3
assistance and to declare an emergency.4


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

       Section 1. That sections 3318.011 and 3318.36 of the Revised 5
Code be amended to read as follows:6

       Sec. 3318.011.  For purposes of providing assistance under 7
sections 3318.01 to 3318.20 of the Revised Code, the department of 8
education shall annually do all of the following:9

       (A) Calculate the adjusted valuation per pupil of each city, 10
local, and exempted village school district according to the 11
following formula:12

The district's valuation per pupil -
13

[$30,000 X (1 - the district's income factor)].
14

       For purposes of this calculation:15

       (1) Except for a district with an open enrollment net gain 16
that is ten per cent or more of its formula ADM, "valuation per 17
pupil" for a district means its average taxable value, divided by 18
its formula ADM for the previous fiscal year. "Valuation per 19
pupil," for a district with an open enrollment net gain that is 20
ten per cent or more of its formula ADM, means its average taxable 21
value, divided by the sum of its formula ADM for the previous 22
fiscal year plus its open enrollment net gain for the previous 23
fiscal year. 24

       (2) "AverageExcept for a tangible personal property 25
phase-out impacted district, "average taxable value" means the 26
average of the sum of the amounts certified for a district under 27
divisions (A)(1) and (2) of section 3317.021 of the Revised Code 28
in the second, third, and fourth preceding fiscal years. For a 29
tangible personal property phase-out impacted district, "average 30
taxable value" means the average of the sum of the amounts 31
certified for the district under division (A)(1) and as public 32
utility personal property under division (A)(2) of section 33
3317.021 of the Revised Code in the second, third, and fourth 34
preceding fiscal years.35

       (3) "Entitled to attend school" means entitled to attend 36
school in a city, local, or exempted village school district under 37
section 3313.64 or 3313.65 of the Revised Code.38

        (4) "Formula ADM" and "income factor" have the same meanings 39
as in section 3317.02 of the Revised Code.40

       (5) "Native student" has the same meaning as in section 41
3313.98 of the Revised Code.42

        (6) "Open enrollment net gain" for a district means (a) the 43
number of the students entitled to attend school in another 44
district but who are enrolled in the schools of the district under 45
its open enrollment policy minus (b) the number of the district's 46
native students who are enrolled in the schools of another 47
district under the other district's open enrollment policy, both 48
numbers as certified to the department under section 3313.981 of 49
the Revised Code. If the difference is a negative number, the 50
district's "open enrollment net gain" is zero.51

        (7) "Open enrollment policy" means an interdistrict open 52
enrollment policy adopted under section 3313.98 of the Revised 53
Code.54

       (8) "Tangible personal property phase-out impacted district" 55
means a school district for which the taxable value of its 56
tangible personal property certified under division (A)(2) of 57
section 3317.021 of the Revised Code for tax year 2005, excluding 58
the taxable value of public utility personal property, made up 59
eighteen per cent or more of its total taxable value for tax year 60
2005 as certified under that section.61

       (B) Calculate for each district the three-year average of the 62
adjusted valuations per pupil calculated for the district for the 63
current and two preceding fiscal years;64

       (C) Rank all such districts in order of adjusted valuation 65
per pupil from the district with the lowest three-year average 66
adjusted valuation per pupil to the district with the highest 67
three-year average adjusted valuation per pupil;68

       (D) Divide such ranking into percentiles with the first 69
percentile containing the one per cent of school districts having 70
the lowest three-year average adjusted valuations per pupil and 71
the one-hundredth percentile containing the one per cent of school 72
districts having the highest three-year average adjusted 73
valuations per pupil;74

       (E) Determine the school districts that have three-year 75
average adjusted valuations per pupil that are greater than the 76
median three-year average adjusted valuation per pupil for all 77
school districts in the state;78

       (F) On or before the first day of September, certify the 79
information described in divisions (A) to (E) of this section to 80
the Ohio school facilities commission.81

       Sec. 3318.36.  (A)(1) As used in this section:82

       (a) "Ohio school facilities commission," "classroom 83
facilities," "school district," "school district board," "net 84
bonded indebtedness," "required percentage of the basic project 85
costs," "basic project cost," "valuation," and "percentile" have 86
the same meanings as in section 3318.01 of the Revised Code.87

       (b) "Required level of indebtedness" means five per cent of 88
the school district's valuation for the year preceding the year in 89
which the commission and school district enter into an agreement 90
under division (B) of this section, plus [two one-hundredths of 91
one per cent multiplied by (the percentile in which the district 92
ranks minus one)].93

       (c) "Local resources" means any moneys generated in any 94
manner permitted for a school district board to raise the school 95
district portion of a project undertaken with assistance under 96
sections 3318.01 to 3318.20 of the Revised Code.97

       (d) "Tangible personal property phase-out impacted district" 98
has the same meaning as in section 3318.011 of the Revised Code.99

       (2) For purposes of determining the required level of 100
indebtedness, the required percentage of the basic project costs 101
under division (C)(1) of this section, and priority for assistance 102
under sections 3318.01 to 3318.20 of the Revised Code, the 103
percentile ranking of a school district with which the commission 104
has entered into an agreement under this section between the first 105
day of July and the thirty-first day of August in each fiscal year 106
is the percentile ranking calculated for that district for the 107
immediately preceding fiscal year, and the percentile ranking of a 108
school district with which the commission has entered into such 109
agreement between the first day of September and the thirtieth day 110
of June in each fiscal year is the percentile ranking calculated 111
for that district for the current fiscal year. However, in the 112
case of a tangible personal property phase-out impacted district, 113
the district's priority for assistance under sections 3318.01 to 114
3318.20 of the Revised Code and its portion of the basic project 115
cost under those sections shall be determined in the manner 116
prescribed, respectively, in divisions (B)(3)(b) and (E)(1)(b) of 117
this section. 118

       (B)(1) There is hereby established the school building 119
assistance expedited local partnership program. Under the program, 120
the Ohio school facilities commission may enter into an agreement 121
with the school district board of any school district under which 122
the school district board may proceed with the new construction or 123
major repairs of a part of the school district's classroom 124
facilities needs, as determined under sections 3318.01 to 3318.20 125
of the Revised Code, through the expenditure of local resources 126
prior to the school district's eligibility for state assistance 127
under those sections and may apply that expenditure toward meeting 128
the school district's portion of the basic project cost of the 129
total of the school district's classroom facilities needs, as 130
determined under sections 3318.01 to 3318.20 of the Revised Code 131
and as recalculated under division (E) of this section, that are 132
eligible for state assistance under sections 3318.01 to 3318.20 of 133
the Revised Code when the school district becomes eligible for 134
that assistance. Any school district that is reasonably expected 135
to receive assistance under sections 3318.01 to 3318.20 of the 136
Revised Code within two fiscal years from the date the school 137
district adopts its resolution under division (B) of this section 138
shall not be eligible to participate in the program established 139
under this section.140

       (2) To participate in the program, a school district board 141
shall first adopt a resolution certifying to the commission the 142
board's intent to participate in the program.143

       The resolution shall specify the approximate date that the 144
board intends to seek elector approval of any bond or tax measures 145
or to apply other local resources to use to pay the cost of 146
classroom facilities to be constructed under this section. The 147
resolution may specify the application of local resources or 148
elector-approved bond or tax measures after the resolution is 149
adopted by the board, and in such case the board may proceed with 150
a discrete portion of its project under this section as soon as 151
the commission and the controlling board have approved the basic 152
project cost of the district's classroom facilities needs as 153
specified in division (D) of this section. The board shall submit 154
its resolution to the commission not later than ten days after the 155
date the resolution is adopted by the board.156

       The commission shall not consider any resolution that is 157
submitted pursuant to division (B)(2) of this section, as amended 158
by this amendment, sooner than September 14, 2000.159

       (3) For purposes of determining when a district that enters 160
into an agreement under this section becomes eligible for 161
assistance under sections 3318.01 to 3318.20 of the Revised Code, 162
the commission shall use one of the following as applicable:163

       (a) Except for a tangible personal property phase-out 164
impacted district, the district's percentile ranking determined at 165
the time the district entered into the agreement under this 166
section, as prescribed by division (A)(2) of this section;167

       (b) For a tangible personal property phase-out impacted 168
district, the least of (i) the district's percentile ranking 169
determined at the time the district entered into the agreement 170
under this section, as prescribed by division (A)(2) of this 171
section, (ii) the district's current percentile ranking under 172
section 3318.011 of the Revised Code, or (iii) for a project 173
approved for fiscal year 2013, the district's percentile ranking 174
under the alternate equity list prescribed by Section 3 of .....B. 175
..... of the 129th general assembly.176

       (4) Any project under this section shall comply with section 177
3318.03 of the Revised Code and with any specifications for plans 178
and materials for classroom facilities adopted by the commission 179
under section 3318.04 of the Revised Code.180

       (5) If a school district that enters into an agreement under 181
this section has not begun a project applying local resources as 182
provided for under that agreement at the time the district is 183
notified by the commission that it is eligible to receive state 184
assistance under sections 3318.01 to 3318.20 of the Revised Code, 185
all assessment and agreement documents entered into under this 186
section are void.187

       (6) Only construction of or repairs to classroom facilities 188
that have been approved by the commission and have been therefore 189
included as part of a district's basic project cost qualify for 190
application of local resources under this section.191

       (C) Based on the results of on-site visits and assessment, 192
the commission shall determine the basic project cost of the 193
school district's classroom facilities needs. The commission shall 194
determine the school district's portion of such basic project 195
cost, which shall be the greater of:196

       (1) The required percentage of the basic project costs, 197
determined based on the school district's percentile ranking;198

       (2) An amount necessary to raise the school district's net 199
bonded indebtedness, as of the fiscal year the commission and the 200
school district enter into the agreement under division (B) of 201
this section, to within five thousand dollars of the required 202
level of indebtedness.203

       (D)(1) When the commission determines the basic project cost 204
of the classroom facilities needs of a school district and the 205
school district's portion of that basic project cost under 206
division (C) of this section, the project shall be conditionally 207
approved. Such conditional approval shall be submitted to the 208
controlling board for approval thereof. The controlling board 209
shall forthwith approve or reject the commission's determination, 210
conditional approval, and the amount of the state's portion of the 211
basic project cost; however, no state funds shall be encumbered 212
under this section. Upon approval by the controlling board, the 213
school district board may identify a discrete part of its 214
classroom facilities needs, which shall include only new 215
construction of or additions or major repairs to a particular 216
building, to address with local resources. Upon identifying a part 217
of the school district's basic project cost to address with local 218
resources, the school district board may allocate any available 219
school district moneys to pay the cost of that identified part, 220
including the proceeds of an issuance of bonds if approved by the 221
electors of the school district.222

       All local resources utilized under this division shall first 223
be deposited in the project construction account required under 224
section 3318.08 of the Revised Code.225

       (2) Unless the school district board exercises its option 226
under division (D)(3) of this section, for a school district to 227
qualify for participation in the program authorized under this 228
section, one of the following conditions shall be satisfied:229

       (a) The electors of the school district by a majority vote 230
shall approve the levy of taxes outside the ten-mill limitation 231
for a period of twenty-three years at the rate of not less than 232
one-half mill for each dollar of valuation to be used to pay the 233
cost of maintaining the classroom facilities included in the basic 234
project cost as determined by the commission. The form of the 235
ballot to be used to submit the question whether to approve the 236
tax required under this division to the electors of the school 237
district shall be the form for an additional levy of taxes 238
prescribed in section 3318.361 of the Revised Code, which may be 239
combined in a single ballot question with the questions prescribed 240
under section 5705.218 of the Revised Code.241

       (b) As authorized under division (C) of section 3318.05 of 242
the Revised Code, the school district board shall earmark from the 243
proceeds of a permanent improvement tax levied under section 244
5705.21 of the Revised Code, an amount equivalent to the 245
additional tax otherwise required under division (D)(2)(a) of this 246
section for the maintenance of the classroom facilities included 247
in the basic project cost as determined by the commission.248

       (c) As authorized under section 3318.051 of the Revised Code, 249
the school district board shall, if approved by the commission, 250
annually transfer into the maintenance fund required under section 251
3318.05 of the Revised Code the amount prescribed in section 252
3318.051 of the Revised Code in lieu of the tax otherwise required 253
under division (D)(2)(a) of this section for the maintenance of 254
the classroom facilities included in the basic project cost as 255
determined by the commission.256

        (d) If the school district board has rescinded the agreement 257
to make transfers under section 3318.051 of the Revised Code, as 258
provided under division (F) of that section, the electors of the 259
school district, in accordance with section 3318.063 of the 260
Revised Code, first shall approve the levy of taxes outside the 261
ten-mill limitation for the period specified in that section at a 262
rate of not less than one-half mill for each dollar of valuation.263

       (e) The school district board shall apply the proceeds of a 264
tax to leverage bonds as authorized under section 3318.052 of the 265
Revised Code or dedicate a local donated contribution in the 266
manner described in division (B) of section 3318.084 of the 267
Revised Code in an amount equivalent to the additional tax 268
otherwise required under division (D)(2)(a) of this section for 269
the maintenance of the classroom facilities included in the basic 270
project cost as determined by the commission.271

       (3) A school district board may opt to delay taking any of 272
the actions described in division (D)(2) of this section until the 273
school district becomes eligible for state assistance under 274
sections 3318.01 to 3318.20 of the Revised Code. In order to 275
exercise this option, the board shall certify to the commission a 276
resolution indicating the board's intent to do so prior to 277
entering into an agreement under division (B) of this section.278

       (4) If pursuant to division (D)(3) of this section a district 279
board opts to delay levying an additional tax until the district 280
becomes eligible for state assistance, it shall submit the 281
question of levying that tax to the district electors as follows:282

       (a) In accordance with section 3318.06 of the Revised Code if 283
it will also be necessary pursuant to division (E) of this section 284
to submit a proposal for approval of a bond issue;285

       (b) In accordance with section 3318.361 of the Revised Code 286
if it is not necessary to also submit a proposal for approval of a 287
bond issue pursuant to division (E) of this section.288

       (5) No state assistance under sections 3318.01 to 3318.20 of 289
the Revised Code shall be released until a school district board 290
that adopts and certifies a resolution under division (D) of this 291
section also demonstrates to the satisfaction of the commission 292
compliance with the provisions of division (D)(2) of this section.293

       Any amount required for maintenance under division (D)(2) of 294
this section shall be deposited into a separate fund as specified 295
in division (B) of section 3318.05 of the Revised Code.296

       (E)(1) If the school district becomes eligible for state 297
assistance under sections 3318.01 to 3318.20 of the Revised Code 298
based on its percentile ranking under division (B)(3) of this 299
section, the commission shall conduct a new assessment of the 300
school district's classroom facilities needs and shall recalculate 301
the basic project cost based on this new assessment. The basic 302
project cost recalculated under this division shall include the 303
amount of expenditures made by the school district board under 304
division (D)(1) of this section. The commission shall then 305
recalculate the school district's portion of the new basic project 306
cost, which shall be one of the following as applicable:307

       (a) Except for a tangible personal property phase-out 308
impacted district, the percentage of the original basic project 309
cost assigned to the school district as its portion under division 310
(C) of this section;311

       (b) For a tangible personal property phase-out impacted 312
district, the least of (i) the percentage of the original basic 313
project cost assigned to the school district as its portion under 314
division (C) of this section, (ii) the percentage of the new basic 315
project cost determined under section 3318.032 of the Revised Code 316
using the district's current percentile ranking under section 317
3318.011 of the Revised Code, or (iii) for a project approved for 318
fiscal year 2013, the percentage of the new basic project cost 319
determined under section 3318.032 of the Revised Code using the 320
district's percentile ranking under the alternate equity list 321
prescribed by Section 3 of ....B. ..... of the 129th general 322
assembly. The323

       The commission shall deduct the expenditure of school 324
district moneys made under division (D)(1) of this section from 325
the school district's portion of the basic project cost as 326
recalculated under this division. If the amount of school district 327
resources applied by the school district board to the school 328
district's portion of the basic project cost under this section is 329
less than the total amount of such portion as recalculated under 330
this division, the school district board by a majority vote of all 331
of its members shall, if it desires to seek state assistance under 332
sections 3318.01 to 3318.20 of the Revised Code, adopt a 333
resolution as specified in section 3318.06 of the Revised Code to 334
submit to the electors of the school district the question of 335
approval of a bond issue in order to pay any additional amount of 336
school district portion required for state assistance. Any tax 337
levy approved under division (D) of this section satisfies the 338
requirements to levy the additional tax under section 3318.06 of 339
the Revised Code.340

       (2) If the amount of school district resources applied by the 341
school district board to the school district's portion of the 342
basic project cost under this section is more than the total 343
amount of such portion as recalculated under this division (E)(1) 344
of this section, within one year after the school district's 345
portion is so recalculated under division (E)(1) of this section346
the commission may grant to the school district the difference 347
between the two calculated portions, but at no time shall the 348
commission expend any state funds on a project in an amount 349
greater than the state's portion of the basic project cost as 350
recalculated under this division (E)(1) of this section.351

       Any reimbursement under this division shall be only for local 352
resources the school district has applied toward construction cost 353
expenditures for the classroom facilities approved by the 354
commission, which shall not include any financing costs associated 355
with that construction.356

       The school district board shall use any moneys reimbursed to 357
the district under this division to pay off any debt service the 358
district owes for classroom facilities constructed under its 359
project under this section before such moneys are applied to any 360
other purpose. However, the district board first may deposit 361
moneys reimbursed under this division into the district's general 362
fund or a permanent improvement fund to replace local resources 363
the district withdrew from those funds, as long as, and to the 364
extent that, those local resources were used by the district for 365
constructing classroom facilities included in the district's basic 366
project cost.367

       (3) A tangible personal property phase-out impacted district 368
shall receive credit under division (E) of this section for the 369
expenditure of local resources pursuant to any prior agreement 370
authorized by this section, notwithstanding any recalculation of 371
its average taxable value.372

       Section 2. That existing sections 3318.011 and 3318.36 of the 373
Revised Code are hereby repealed.374

       Section 3. (A) As used in this section, "equity list" means 375
the school district percentile rankings calculated under section 376
3318.011 of the Revised Code. 377

       (B) Not later than thirty days after the effective date of 378
this section, the Department of Education shall create an 379
alternate equity list for fiscal year 2012, for use in funding 380
projects for fiscal year 2013, by recalculating each school 381
district's percentile ranking under section 3318.011 of the 382
Revised Code and shall certify the alternate equity list to the 383
Ohio School Facilities Commission. For this purpose, the 384
Department shall recalculate each school district's percentile 385
ranking using the district's "average taxable value" as that term 386
is defined in the version of section 3318.011 of the Revised Code, 387
as it results from the amendments to that section enacted by this 388
act. 389

       (C) The Commission shall use the alternate equity list 390
certified under division (B) of this section to determine the 391
priority for assistance under sections 3318.01 to 3318.20 of the 392
Revised Code for fiscal year 2013 for each school district that 393
has not previously been offered funding under those sections. 394
However, no district that already has been offered assistance 395
under those sections for fiscal year 2012 prior to the 396
Commission's receipt of the alternate equity list shall be denied 397
the opportunity for assistance under those sections for that 398
fiscal year. 399

       (D) Notwithstanding any provision of Chapter 3318. of the 400
Revised Code to the contrary, for each school district that 401
receives the Commission's conditional approval of the district's 402
project under sections 3318.01 to 3318.20 of the Revised Code for 403
fiscal year 2013, the district's portion of the basic project cost 404
shall be the lesser of the following: 405

       (1) The amount required under section 3318.032 of the Revised 406
Code calculated using the percentile in which the district ranks 407
on the alternate equity list certified under division (B) of this 408
section; 409

       (2) The amount required under section 3318.032 of the Revised 410
Code calculated using the percentile in which the district ranks 411
on the original equity list for fiscal year 2012.412

       Section 4. This act is hereby declared to be an emergency 413
measure necessary for the immediate preservation of the public 414
peace, health, and safety. The reason for such necessity is to 415
prevent delays in classroom construction projects by school 416
districts that had substantial amounts of tangible personal 417
property valuation before the tax on tangible personal property 418
was phased out. Therefore, this act shall go into immediate 419
effect.420