Am. H. B. No. 216 As Reported by the House Education Committee

As Reported by the House Education Committee

130th General Assembly

Regular Session

2013-2014

Am. H. B. No. 216

Representative Patterson

Cosponsors: Representatives Foley, Antonio, Strahorn, Bishoff, Driehaus

A BILL

To amend sections 3311.24 and 3311.38 and to enact

section 3311.241 of the Revised Code to forgive a

school district's indebtedness to the Solvency

Assistance Fund upon its voluntary consolidation

with another district if specified conditions are

satisfied.

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

Section 1. That sections 3311.24 and 3311.38 be amended and	7
section 3311.241 of the Revised Code be enacted to read as	8
follows:	9

Sec. 3311.24. (A)(1) Except as provided in division (B) of	10
this section, the board of education of a city, exempted village,	11
or local school district shall file with the state board of	12
education a proposal to transfer territory from such district to	13
an adjoining city, exempted village, or local school district in	14
any of the following circumstances:	15

(a) The district board deems the transfer advisable and, if	16
the portion of the district proposed to be transferred is five	17
acres or more, the board has obtained written consent to the	18
transfer from seventy-five per cent of the owners of parcels of	19
real property on the tax duplicate within that portion of the	20
district;	21

(b) A petition, signed by seventy-five per cent of the	22
qualified electors residing within that portion of a city,	23
exempted village, or local school district proposed to be	24
transferred voting at the last general election, requests such a	25
transfer;	26

(c) If no qualified electors reside in that portion of the	27
district proposed to be transferred, a petition, signed by	28
seventy-five per cent of the owners of parcels of real property on	29
the tax duplicate within that portion of the district, requests	30
such a transfer.	31

(2) The board of education of the district in which such	32
proposal originates shall file such proposal, together with a map	33
showing the boundaries of the territory proposed to be	34
transferred, with the state board of education prior to the first	35
day of April in any even-numbered year. The state board of	36
education may, if it is advisable, provide for a hearing in any	37
suitable place in any of the school districts affected by such	38
proposed transfer of territory. The state board of education or	39
its representatives shall preside at any such hearing.	40

(3) A board of education of a city, exempted village, or	41
local school district that receives a petition of transfer signed	42
by electors of the district under division (A)(1)(b) of this	43
section shall cause the board of elections to check the	44
sufficiency of signatures on the petition. A board of education of	45
a city, exempted village, or local school district that receives	46
written consent or a petition of transfer signed by owners of	47
parcels of real property under division (A)(1)(a) or (c) of this	48
section shall cause the county auditor to check the sufficiency of	49
signatures on the consent or petition.	50

(4) Not later than the first day of September the state board	51
of education shall either approve or disapprove a proposed	52
transfer of territory filed with it as provided by this section	53
and shall notify, in writing, the boards of education of the	54
districts affected by such proposed transfer of territory of its	55
decision.	56

If the decision of the state board of education is an	57
approval of the proposed transfer of territory then the board of	58
education of the district in which the territory is located shall,	59
within thirty days after receiving the state board of education's	60
decision, adopt a resolution transferring the territory and shall	61
forthwith submit a copy of such resolution to the treasurer of the	62
board of education of the city, exempted village, or local school	63
district to which the territory is transferred. Such transfer	64
shall not be complete however, until:	65

(a) A resolution accepting the transfer has been passed by a	66
majority vote of the full membership of the board of education of	67
the city, exempted village, or local school district to which the	68
territory is transferred;	69

(b) AnSubject to section 3311.241 of the Revised Code, if	70
applicable, an equitable division of the funds and indebtedness	71
between the districts involved has been made by the board of	72
education making the transfer;	73

(c) A map showing the boundaries of the territory transferred	74
has been filed, by the board of education accepting the transfer,	75
with the county auditor of each county affected by the transfer.	76

When such transfer is complete the legal title of the school	77
property in the territory transferred shall be vested in the board	78
of education or governing board of the school district to which	79
the territory is transferred.	80

(B) Whenever the transfer of territory pursuant to this	81
section is initiated by a board of education, the board shall,	82
before filing a proposal for transfer with the state board of	83
education under this section, make a good faith effort to	84
negotiate the terms of transfer with any other school district	85
whose territory would be affected by the transfer. Before the	86
state board may hold a hearing on the transfer, or approve or	87
disapprove any such transfer, it must receive the following:	88

(1) A resolution requesting approval of the transfer passed	89
by the school district submitting the proposal and, if applicable,	90
evidence of the consent of affected property owners to the	91
transfer;	92

(2) Evidence determined to be sufficient by the state board	93
to show that good faith negotiations have taken place or that the	94
district requesting the transfer has made a good faith effort to	95
hold such negotiations;	96

(3) If any negotiations took place, a statement signed by all	97
boards that participated in the negotiations, listing the terms	98
agreed on and the points on which no agreement could be reached.	99

Negotiations held pursuant to this section shall be governed	100
by the rules adopted by the state board under division (D) of	101
section 3311.06 of the Revised Code. Districts involved in a	102
transfer under division (B) of this section may agree to share	103
revenues from the property included in the territory to be	104
transferred, establish cooperative programs between the	105
participating districts, and establish mechanisms for the	106
settlement of any future boundary disputes.	107

Sec. 3311.241. (A) In the case of a voluntary transfer of	108
the territory of a school district in accordance with section	109
3311.38 or division (A)(1)(a) of section 3311.24 of the Revised	110
Code, and where the transfer results in the complete consolidation	111
and dissolution of the transferring district, the net indebtedness	112
owed to the solvency assistance fund created under section 3316.20	113
of the Revised Code by the transferring district shall be	114
canceled, provided that all of the following conditions are	115
satisfied:	116

(1) The amount owed by the transferring district to the	117
solvency assistance fund is greater than or equal to thirty-three	118
per cent of the transferring school district's operating budget	119
for the current fiscal year, but does not exceed ten million	120
dollars.	121

(2) The transferring district has remained in a state of	122
fiscal emergency pursuant to section 3316.03 of the Revised Code	123
during the previous two fiscal years.	124

(3) The acquiring district is in the same county or in a	125
county contiguous to the county in which the transferring district	126
is located.	127

(4) The acquiring district has voluntarily accepted the	128
transfer.	129

(5) The acquiring district has submitted to the state board	130
of education a five-year written projection of solvency which	131
takes into account the fiscal effects of acquiring the	132
transferring district.	133

(B) If the conditions in division (A) of this section are	134
satisfied, the acquiring district shall acquire the transferring	135
district's territory free and clear of any amount owed by the	136
transferring district to the solvency assistance fund. However,	137
the acquiring district shall assume the obligations of all other	138
liens, encumbrances, and debts of the transferring district.	139

(C) Upon the making of a transfer pursuant to this section,	140
the board of education of the transferring district is thereby	141
abolished, and the district is thereby dissolved.	142

(D) The director of budget and management may transfer any	143
available moneys from the general revenue fund, appropriated for	144
operating payments to schools, into the solvency assistance fund	145
to replace the amount owed by a transferring school district	146
forgone under division (A) of this section.	147

Sec. 3311.38. The state board of education may conduct, or	148
may direct the superintendent of public instruction to conduct,	149
studies where there is evidence of need for transfer of local,	150
exempted village, or city school districts, or parts of any such	151
districts, to contiguous or noncontiguous local, exempted village,	152
or city school districts. Such studies shall include a study of	153
the effect of any proposal upon any portion of a school district	154
remaining after such proposed transfer. The state board, in	155
conducting such studies and in making recommendations as a result	156
thereof, shall consider the possibility of improving school	157
district organization as well as the desires of the residents of	158
the school districts which would be affected.	159

(A) After the adoption of recommendations growing out of any	160
such study, or upon receipt of a resolution adopted by majority	161
vote of the full membership of the board of any city, local, or	162
exempted village school district requesting that the entire	163
district be transferred to another city, local, or exempted	164
village school district, the state board may propose by resolution	165
the transfer of territory, which may consist of part or all of the	166
territory of a local, exempted village, or city school district to	167
a contiguous local, exempted village, or city school district.	168

The state board shall thereupon file a copy of such proposal	169
with the board of education of each school district whose	170
boundaries would be altered by the proposal and with the governing	171
board of any educational service center in which such school	172
district is located.	173

The state board may, not less than thirty days following the	174
adoption of the resolution proposing the transfer of territory,	175
certify the proposal to the board of elections of the county or	176
counties in which any of the territory of the proposed district is	177
located, for the purpose of having the proposal placed on the	178
ballot at the next general election or at a primary election	179
occurring not less than ninety days after the adoption of such	180
resolution.	181

If any proposal has been previously initiated pursuant to	182
section 3311.22, 3311.231, or 3311.26 of the Revised Code which	183
affects any of the territory affected by the proposal of the state	184
board, the proposal of the state board shall not be placed on the	185
ballot while the previously initiated proposal is subject to an	186
election.	187

Upon certification of a proposal to the board of elections of	188
any county pursuant to this section, the board of elections of	189
such county shall make the necessary arrangements for the	190
submission of such question to the electors of the county	191
qualified to vote thereon, and the election shall be counted and	192
canvassed and the results shall be certified in the same manner as	193
in regular elections for the election of members of a board of	194
education.	195

The electors qualified to vote upon a proposal are the	196
electors residing in the local, exempted village, or city school	197
districts, containing territory proposed to be transferred.	198

If the proposed transfer be approved by a majority of the	199
electors voting on the proposal, the state board, subject to the	200
approval of the board of education of the district to which the	201
territory would be transferred, shall make such transfer prior to	202
the next succeeding July 1.	203

(B) If a study conducted in accordance with this section	204
involves a school district with less than four thousand dollars of	205
assessed value for each pupil in the total student count	206
determined under section 3317.03 of the Revised Code, the state	207
board of education, with the approval of the educational service	208
center governing board, and upon recommendation by the state	209
superintendent of public instruction, may by resolution transfer	210
all or any part of such a school district to any city, exempted	211
village, or local school district which has more than twenty-five	212
thousand pupils in average daily membership. Such resolution of	213
transfer shall be adopted only after the board of education of the	214
receiving school district has adopted a resolution approving the	215
proposed transfer. For the purposes of this division, the assessed	216
value shall be as certified in accordance with section 3317.021 of	217
the Revised Code.	218

(C) ~~Upon~~Subject to section 3311.241 of the Revised Code, if	219
applicable, upon the making of a transfer of an entire school	220
district pursuant to this section, the indebtedness of the	221
district transferred shall be assumed in full by the acquiring	222
district and the funds of the district transferred shall be paid	223
over in full to the acquiring district, except that any	224
indebtedness of the transferred district incurred as a result of a	225
loan made under section 3317.64 of the Revised Code is hereby	226
canceled and shall not be assumed by the acquiring district.	227

(D) Upon the making of a transfer pursuant to this section,	228
when only part of a district is transferred, the net indebtedness	229
of each original district of which only a part is taken by the	230
acquiring district shall be apportioned between the acquiring	231
district and the original district in the ratio which the assessed	232
valuation of the part taken by the acquiring district bears to the	233
assessed valuation of the original district as of the effective	234
date of the transfer. As used in this section "net indebtedness"	235
means the difference between the par value of the outstanding and	236
unpaid bonds and notes of the school district and the amount held	237
in the sinking fund and other indebtedness retirement funds for	238
their redemption.	239

(E) Upon the making of a transfer pursuant to this section,	240
when only part of a district is transferred, the funds of the	241
district from which territory was transferred shall be divided	242
equitably by the state board between the acquiring district and	243
that part of the former district remaining after the transfer.	244

(F) If an entire school district is transferred, the board of	245
education of such district is thereby abolished. If part of a	246
school district is transferred, any member of the board of	247
education who is a legal resident of that part which is	248
transferred shall thereby cease to be a member of that board.	249

If an entire school district is transferred, foundation	250
program moneys accruing to a district accepting school territory	251
under the provisions of this section shall not be less, in any	252
year during the next succeeding three years following the	253
transfer, than the sum of the amounts received by the districts	254
separately in the year in which the transfer became effective.	255

Section 2. That existing sections 3311.24 and 3311.38 of the	256
Revised Code are hereby repealed.	257