Bill Analysis

Legislative Service Commission

LSC Preliminary Summary

Am. Sub. H.B. 530*

126th General Assembly

(As Passed by the General Assembly)

 

Reps.     Calvert, Coley, Allen, Aslanides, Collier, Combs, Dolan, Evans, C., Evans, D., Flowers, Hagan, Law, Martin, McGregor, R., Peterson, Schneider, Seitz, Setzer, Webster, White, Widowfield

Sens.      Carey, Harris, Spada

Effective date:  June 30, 2006; certain sections and provisions effective March 30, 2006; certain other sections and provisions effective on other dates; contains item vetoes

This analysis is arranged by state agency, beginning with the Adjutant General and continuing in alphabetical order.  Items that do not directly involve an agency are located under the agency that has regulatory authority over the item, or otherwise deals with the subject matter of the item.  The analysis includes a Local Government category, and concludes with a Miscellaneous category.

Within each category, a summary of the items appears first (in the form of dot points), followed by a discussion of their content and operation.  Items generally are presented in the order in which they appear in the Revised Code.

ADJUTANT GENERAL.. 10

Income tax exemption for National Guard death benefits and life insurance premium reimbursements  11

Commemorative Ohio National Guard Service Medal 11

 

DEPARTMENT OF ADMINISTRATIVE SERVICES.. 12

Revisions to the Civil Service Law.. 14

Overview.. 14

Proficiency assessments. 14

Right of a state employee to return to a classified position after being
appointed to an unclassified position
. 14

Use of sick leave, vacation leave, personal leave, and compensatory time
only if appears on an employee's earnings statement
15

Holiday pay. 17

Other changes relating to sick leave and personal leave. 18

Paid leave for attendance as a witness. 18

Payment of state employees by direct deposit 19

Schedules of rates for certain public employees. 19

Paper layoffs. 20

Voluntary cost savings program.. 21

Changes to the laws governing health care benefits for state employees. 21

Military pay differential 23

Governor's Residence Advisory Commission. 24

Membership of the eTech Ohio Commission. 25

Membership of the Ohio Business Gateway Steering Committee. 26

Release of unclaimed public improvement construction funds held in escrow.. 26

 

DEPARTMENT OF AGING... 27

Criminal records checks for ombudspersons. 28

Criminal records check for community-based long-term care agencies. 31

Definition of "community-based long-term care services" 33

 

DEPARTMENT OF AGRICULTURE.. 33

Farmland Preservation Advisory Board. 34

Fee refunds for certain vegetable and flower seed labelers. 34

 

ATTORNEY GENERAL.. 35

Debts owed to the state. 35

Certification of debts to the Attorney General for collection. 35

Sale of final overdue claims to any person. 37

 

AUDITOR OF STATE.. 38

Payment function transferred to the Director of Budget and Management 39

 

DEPARTMENT OF COMMERCE.. 39

Retail installment contract charges. 40

Persons licensed under Ohio insurance laws exempt from Small Loans Law.. 40

Work permits and proof of age for minors at seasonal amusement or
recreational establishments
. 40

 

 

 

DEPARTMENT OF DEVELOPMENT.. 42

Minority Development Financing Advisory Board and the Surety Bonding Program.. 42

Elimination of a financial gain prohibition regarding research and
development support awards
. 43

Director of Development's designee on Ohio Water Development Authority. 43

 

DEPARTMENT OF EDUCATION.. 43

School Employees Health Care Board. 49

School district debt limits. 50

Background. 50

Tax valuation. 50

Net indebtedness above the limits. 51

Unvoted debt for state-assisted classroom facilities projects. 51

Consent procedure. 52

Educational Choice scholarships. 53

Background. 53

Expansion to students of "academic watch" schools. 53

Eligibility in open enrollment districts. 54

Student data codes. 54

Credit to resident district when student re-enrolls in community school 55

Chartered nonpublic school rule compliance. 56

Twice-annual reporting of formula ADM... 56

Background. 56

Delay in implementation; change to first week in February. 57

Annualized payments. 57

Penalty for reporting inaccurate attendance data. 57

Early graduation. 58

School district tuition law changes. 58

Background. 58

Tuition for a child placed by a juvenile court 59

Conditions for seeking payment for educating a disabled child. 60

Parent's responsibility in unilateral placement of a disabled child. 61

Federal school food programs. 61

School districts. 61

Community schools. 62

Changes to community school law.. 62

Background. 62

Qualifications of sponsors. 63

Prohibition on community school sponsoring another community school 64

Deadline for signing contract 64

Exclusion of certain students from community school enrollment count 64

Withdrawal of e-school students for failure to take achievement tests. 65

Delay of additional assessments and sanctions. 66

Conflicts of interest 67

School district transitional aid. 68

Tax information to calculate "gap aid" phase-out payments. 68

Poverty-based assistance payments for all-day kindergarten. 69

Background. 69

Post-Secondary Enrollment Options Program.. 70

Autism Scholarship Program.. 70

Background. 71

Use of student data verification codes. 71

Background. 71

Confidentiality of achievement test scores. 71

Applying for tuition reimbursement for special education students. 72

Reporting of disabled preschool children to General Assembly. 72

Timelines for completing value-added analyses. 73

Governing boards of merged ESCs. 73

Removal of obsolete references to education subsidies. 74

Removal of LOEO references. 74

 

STATE EMPLOYMENT RELATIONS BOARD.. 75

Attorneys governed by the Public Employees' Collective Bargaining Law.. 75

Change in membership restrictions of the Ohio Elections Commission. 75

 

ENVIRONMENTAL PROTECTION AGENCY.. 76

Collection of solid waste disposal fees. 77

Responsibility to pay solid waste disposal fees. 77

Section 401 water quality certification fees. 77

 

DEPARTMENT OF HEALTH.. 78

Reimbursement to free clinics for medical liability insurance premiums. 79

Choose Life Fund distribution. 79

Abortion reporting requirements. 79

Physician reporting requirements. 80

Hospital reporting requirements. 80

Department of Health reporting requirements. 81

Rulemaking. 82

Medical Board to notify physicians of reporting requirement 82

Enforcement 83

Sewage treatment system rules. 83

Women's Health Services grants. 83

Bureau for children with medical handicaps--Medicare Part D copayments. 84

Background--BCMH.. 84

Background--Medicare Part D.. 84

Payment for Medicare Part D copayments--fiscal year 2007 only. 86

 

HOUSE OF REPRESENTATIVES/SENATE.. 87

Printing or publishing of daily legislative journals. 88

Background law.. 88

Changes made by the act 89

 

DEPARTMENT OF INSURANCE.. 89

Prompt payment of claims for health care services. 89

Certificate of compliance. 90

Insurance company tax--continuing law.. 90

Refunds. 91

Assessments for deficiencies. 91

Interest 92

Credit ordering. 93

 

DEPARTMENT OF JOB AND FAMILY SERVICES.. 93

Disposition of assets for less than fair market value. 99

Background. 99

The act 100

Medicaid ineligibility due to substantial home equity. 101

When real property ceases to be considered principal place of residence. 102

Medicaid funds. 102

Collection of Medicaid copayments by hospitals. 104

Recovery of Medicaid overpayments. 104

Fraud, waste, and abuse prevention and detection. 104

Emergency services by non-contracting providers in Medicaid managed care. 105

Prompt payment by Medicaid-participating health insuring corporations. 106

Qualified state long-term care insurance partnership program.. 106

Nursing facilities' direct care and ancillary and support costs. 107

Nursing facilities' quality incentive payments. 108

Adjustment of nursing facilities' Medicaid rates. 109

Adjustments to nursing facilities' rate due to governmental requirements. 110

Fiscal year 2006 Medicaid payments for new nursing facility beds. 110

Fiscal year 2007 Medicaid reimbursement formula for nursing facilities. 110

Nursing facilities and ICFs/MR's uncompensated capital costs. 111

Nursing facilities that are new in fiscal year 2006 or 2007. 111

ICFs/MR that are new in fiscal year 2006 or 2007. 112

Nursing facilities that complete a capital project 113

ICFs/MR that complete a capital project 114

Nursing facilities that complete an activity. 115

Nursing facility or ICF/MR that completes a renovation. 116

When payments are to begin. 117

Quarterly payments. 117

Payments to continue after a change of operator. 117

No appeals. 118

Rules. 118

ICF/MR Conversion Pilot Program.. 119

Background. 119

Authority to convert in part 119

ICF/MR beds excluded from Medicaid provider agreement 119

Requirement that an ICF/MR  be licensed or certified. 120

Reduction in bed capacity and change to Medicaid provider agreement 120

Reconversion at end of program.. 121

ICF/MR franchise permit fee. 122

Increase in cap on number of licensed residential facility beds. 122

No interruption in Medicaid-covered services. 122

Medicaid Care Management Working Group. 123

 

LIQUOR CONTROL COMMISSION.. 123

Definition of a "sales area or territory" for the Alcoholic Beverages
Franchise Law and the Liquor Code
. 124

Creation of the F-7 liquor permit 125

Eligible entities. 125

Definitions. 126

Premises for an F-7 permit 126

Other aspects of the F-7 permit 126

Issuance of Sunday sales liquor permit without local option election
approval to D-5j liquor permit premises located in certain community entertainment districts
  127

Population quota restrictions for the issuance of D liquor permits. 128

Background. 128

Changes made by the act 128

Bond requirement for a D-4 permit 128

Issuance of D-5h permit for fine arts museums. 129

 

LOCAL GOVERNMENT.. 129

Intra-county distributions of local government funds. 131

Family services coordination plan meeting. 132

County funding of science and natural history museums. 133

Combining separate boards for alcohol, drug addiction, and mental health
services
. 133

Transfer provisions. 134

Pest control 134

Compensation of municipal court employees. 136

Columbiana County Clerk of Courts. 136

Deputy clerks, special deputy clerks, and bailiffs. 136

Other employees of a municipal court 137

Juvenile district detention facility. 137

Forwarding fees to the Children's Trust and Family Violence Prevention
Funds
. 137

Authority of president of board of township trustees to administer oath of
office to certain library board members
. 138

Creation of certain municipal library districts. 138

Oaths of office:  in general 139

Changes made by the act 139

Counties may use general fund money to support emergency management agencies. 139

Vehicle weight violation fine money. 140

 

manufactured homes commission.. 140

Standards governing the installation of manufactured housing. 141

 

DEPARTMENT OF MENTAL HEALTH.. 141

Free clinics--participation in consolidated purchasing program.. 141

 

DEPARTMENT OF MENTAL RETARDATION AND DEVELOPMENTAL DISABILITIES   143

State assistance with MR/DD construction projects. 143

Need for Controlling Board or OBM approval 143

Approval to sell existing facility and acquire replacement facility. 144

County MR/DD Medicaid Reserve Fund. 145

 

PUBLIC DEFENDER COMMISSION.. 146

Application fee for indigent defendants. 146

Legal Aid Fund. 149

Ohio Legal Assistance Foundation Fund. 149

Ohio Legal Assistance Foundation. 150

 

DEPARTMENT OF PUBLIC SAFETY.. 151

Proceeds from the criminal forfeiture of property to the State Highway Patrol under federal law   151

Motor vehicle renting dealers itemization of registration and title fees. 151

 

STATE RACING COMMISSION.. 152

Deposit of entire ½ of 1% of all amounts wagered on exotic wagering into the State Racing Commission Operating Fund. 152

 

BOARD OF REGENTS.. 153

Investment authority of two-year colleges. 153

Shawnee State University board membership. 154

 

state school for the blind/school for the deaf.. 154

Pupil money management 155

 

School FACILITIES COMMISSION.. 155

Eligibility for Exceptional Needs School Facilities Assistance Program.. 156

Background. 156

The act 156

 

SECRETARY OF STATE.. 156

Secretary of State's use of social security and employer identification
numbers in UCC filings
. 156

 

DEPARTMENT OF TAXATION.. 157

Commercial activity tax base. 163

Clarification of deductibility. 164

Tax collections. 164

Exclusion for reimbursed tax payments. 164

Receipts from deliveries to a "qualified distribution center" 165

Commercial activity taxpayer consolidations. 168

Foreign entities. 168

Initial election. 168

Prior approval 169

Commercial activity tax "bright-line presence" test 169

Minimum CAT tax for late registrants. 169

Commercial activity tax reporting periods. 170

Commercial activity tax registration requirements. 170

Commercial activity tax registration fee refunds. 171

Credit for unused franchise tax deductions. 171

Commercial activity taxes due within 45 days after winding-up business. 172

Income tax exemption election for certain trusts and their business holdings. 172

Apportioning trust investment income. 173

Apportioning trust investment income from closely held businesses. 173

School district property tax to offset funding formula charge-off increases. 174

Property tax exemption for state-owned property leased to a private party. 175

Eligibility for levy reimbursement for delayed-effect levies. 176

Alternative reimbursement basis. 176

Timing of property tax replacement payments. 177

Subdivision debt limits:  exclude bonds anticipating property tax
replacement payments
. 177

Setting fixed-sum property tax rates. 177

Telecommunications sale and leaseback property. 178

Public utility replacement payments to school districts. 179

Computation. 179

Transferred school district territory. 179

Telephone relay service tax credit 180

Resident credit computation. 181

Low-income tax credit 181

Alternative school district income tax bases. 182

School district income taxes:  exemption of military pay authorized. 182

R.C. 5701.11 incorporates recent changes to the Internal Revenue Code. 183

Uncertified cigarette manufacturers authorized to sell cigarettes to
wholesalers for sale outside Ohio
. 184

County cigarette tax for arts. 184

Sales tax exemption for property used in manufacturing extended to specific property used in laundry and dry cleaning services. 185

Effective date of county sales and use tax levies for general fund purposes. 185

County return of piggyback sales and uses taxes to a person that constructs
an "impact facility"
186

Conditions for entering into a payment agreement 187

Requirements for a payment agreement 187

Failure to comply with the agreement 189

Applying for payments. 189

Appealing the amount of a payment 190

Tax increment financing. 191

Overview of tax increment financing. 191

Creation of incentive district TIFs by political subdivisions having
populations exceeding 25,000
. 191

Notice to affected subdivisions. 192

Compensation agreements between political subdivisions. 193

Payments required for certain special levies. 193

Effective date of exemptions. 194

Use of TIF funds for police and fire equipment 195

Distribution of moneys in tax increment equivalent funds. 195

Technical revisions. 196

Tax increment financing changes immediately effective. 196

School funding formula adjustment for TIF incentive district side payments. 196

Community reinvestment areas:  filing of late exemption applications
authorized
. 198

Taxpayers required to submit certifications verifying entitlement to tax
credits
. 199

Tax exemption for certain property owned by the state and leased for use by
a professional athletic team
.. 200

Tax amnesty for certain "qualified property" 200

Tax abatement for church property. 202

 

DEPARTMENT OF TRANSPORTATION.. 202

Repayment of State Infrastructure Bank (SIB) loans. 203

Money that cannot be used to repay SIB loans. 203

 

BUREAU OF WORKERS' COMPENSATION.. 204

Criminal records checks on persons investing assets of Bureau of Workers' Compensation funds  204

 

DEPARTMENT OF YOUTH SERVICES.. 205

Qualifications for appointment to DYS Release Authority Bureau. 205

 

miscellaneous.. 205

Assistance dogs. 206

Co-location of state agency labs. 208

The Ohio Transportation Task Force. 209

Task Force composition. 209

Duty of the Task Force. 210

Task Force report 210

Regulatory board and commission consolidation. 211

Conveyance of real estate in Wayne County and repeal of prior conveyance authority. 211

New conveyance authority. 211

Repeal of prior conveyance authority. 211

 

·        Exempts from the income tax National Guard death benefits and life insurance premium reimbursements received from the Adjutant General.

·        Creates the Commemorative Ohio National Guard Service Medal for former members of the Ohio National Guard who have been honorably or medically discharged or released from service.

·        Instructs the Adjutant General to design and distribute the medal and to collect a fee from those who apply for it.

 

Income tax exemption for National Guard death benefits and life insurance premium reimbursements

(R.C. 5747.01)

Under continuing law, the Adjutant General is required to reimburse every active duty member of the Ohio National Guard who chooses to purchase life insurance from the federal Servicemember's Group Life Insurance Program for the monthly premium paid for each month or part of a month by the member.  Continuing law also requires the Adjutant General to pay a $100,000 death benefit to the designated beneficiary or beneficiaries of any active duty member of the Ohio National Guard if the member died while performing active duty.[1]

The act permits a taxpayer that receives a life insurance premium reimbursement or death benefit from the Adjutant General to deduct the amount received in calculating the taxpayer's Ohio income tax liability.  A taxpayer may deduct the amount only to the extent the amount is not otherwise deducted or excluded in calculating the taxpayer's Ohio or federal tax liability.

Commemorative Ohio National Guard Service Medal

(R.C. 5919.19)

The act creates the Commemorative Ohio National Guard Service Medal for former members of the Ohio National Guard who have been honorably or medically discharged or released from service.  The act requires retired National Guard members who desire to do so to apply for the medal to the Adjutant General; they must include with their application (1) a copy of their DD-214 form or NGB-22 form (discharge papers) and (2) the fee the Adjutant General prescribes for the medal.  The act relatedly instructs the Adjutant General to design and distribute the medal and to set the application fee at an amount necessary to cover the cost of producing the medal.

The act also creates the National Guard Service Medal Fund in the state treasury.  The fees paid by applicants for the medal, as well as any General Assembly appropriations made for purposes of the medal program (e.g., the act's FY 2006 $1,500 appropriation), must be credited to the Fund, and the Fund correspondingly must be used to pay the costs of producing the medal.

 

·        Exempts proficiency assessments in the Director of Administrative Services' records from public disclosure.

·        Qualifies the right of a state employee who moves from a classified position to an unclassified position to return to the classified position.

·        Prohibits exempt employees and/or other specified state employees from using vacation leave, sick leave, personal leave, or compensatory time until the leave or compensatory time appears on the employee's earning statement and the compensation described in the statement is available to the employee.

·        Modifies other aspects of the use of sick leave provisions and the eligibility for holiday pay provisions, including rules for determining flexible-hours employees' holiday pay and part-time permanent employees holiday pay.

·        Eliminates paid leave for attendance of court as a subpoenaed witness for a state employee subpoenaed as a result of secondary employment outside the service of the state.

·        Requires that direct deposit be used to pay the compensation of all state employees paid by warrant of the Director of Budget and Management, except for employees who were hired before June 5, 2002, and who are subject to a collective bargaining agreement that does not require payment by direct deposit.

·        Eliminates outdated E-1 and E-2 schedules of rates of salaries and wages to be paid to exempt employees for pay periods including July 1, 2002, and July 1, 2005, and creates new E-1 and E-2 schedules for their pay periods including July 1, 2006 (providing a 3% pay increase).

·        Allows the Director of Administrative Services to establish a paper layoff process under which employees who are to be laid off or displaced may be required, before the date of their paper layoff, to preselect their options for displacing other employees.

·        Allows the Director of Administrative Services to establish a voluntary cost savings program for exempt employees.

·        Makes changes in the laws governing health care benefits offered to state employees.

·        Applies the uniformed services pay differential to permanent public employees employed by a state agency who are called into service by the Governor to aid civil authorities.

·        Requires the Governor's Residence Advisory Commission to:  (1) provide for the maintenance of plants that have been obtained by the state for the Governor's residence, (2) provide for the care and placement of plants on the grounds of the Governor's residence, and (3) preserve and seek to further establish those grounds as a representation of Ohio's natural ecosystems.

·        Authorizes the Commission to accept any donation, gift, bequest, or devise as an endowment for the maintenance and care of the garden on the grounds of the Governor's residence.

·        Adds the mayor of Bexley and the chief executive officer of the Franklin Park Conservatory Joint Recreation District as members of the Commission, and requires one of the five members appointed by the Governor under continuing law to have knowledge of landscape architecture, garden design, horticulture, and plants native to Ohio.

·        Replaces the Director of Administrative Services (or the Director's designee) with the Director of the Office of Information Technology (or the Director's designee) as a member of the eTech Ohio Commission.

·        Replaces the Director of Administrative Services (or the Director's designee) with the Director of the Office of Information Technology (or the Director's designee) as a member of the Ohio Business Gateway Steering Committee.

·        Provides procedures for the release of public improvement construction funds placed in escrow by the Department of Administrative Services if the contractor to be paid by the funds does not claim them within three years.

 

 

Revisions to the Civil Service Law

Overview

The act makes revisions to the laws governing paid leave, compensation, health care benefits, and layoffs with regard to exempt employees, specified state employees, or state employees in general.

Proficiency assessments

(R.C. 124.09(B))

The Director of Administrative Services is required to keep records of the Director's proceedings and all examinations the Director conducts.  Those records generally must be open for public inspection under reasonable regulations.  Under former law, examinations and recommendations of former employers were the only records exempt from the "open for public inspection" general requirement; they continue as exceptions under the act.  Still, under certain circumstances, the exceptions do not apply to the Governor or the Governor's designee in connection with an investigation.

The act also declares proficiency assessments in the Director's records as exempt from the "open for public inspection" general requirement.

Right of a state employee to return to a classified position after being appointed to an unclassified position

(R.C. 124.11(D))

Generally continuing law authorizes an appointing authority whose employees are paid by warrant of the Director of Budget and Management (changed from "the Auditor of State" otherwise by the act) to appoint a person who holds a certified position in the classified service within the appointing authority's agency to a position in the unclassified service in that agency.[2]  A person appointed to a position in the unclassified service in this manner retains the right to resume the position and status the person held in the classified service immediately before the person's appointment to the position in the unclassified service, regardless of the number of positions the person held in the unclassified service.  These provisions of continuing law, and the provisions of the act described in the following paragraph, do not apply to employees in positions in the unclassified service of the Bureau of Workers' Compensation or the Departments of Mental Health, Rehabilitation and Correction, Mental Retardation and Developmental Disabilities, Youth Services, and Transportation who, under specific statutes applicable to the Bureau and those departments, have the right to resume positions in the classified service.

The act provides that an employee's right to resume a position in the classified service may only be exercised when an appointing authority demotes the employee to a pay range lower than the employee's current pay range or revokes the employee's appointment to the unclassified service.  And, an employee forfeits the right to resume a position in the classified service when the employee is removed from the position in the unclassified service due to incompetence, inefficiency, dishonesty, drunkenness, immoral conduct, insubordination, discourteous treatment of the public, neglect of duty, violation of the Civil Service Law or the rules of the Director of Administrative Services, any other failure of good behavior, any other acts of misfeasance, malfeasance, or nonfeasance in office, or conviction of a felony.  An employee also forfeits the right to resume a position in the classified service upon transfer to a different agency.

Use of sick leave, vacation leave, personal leave, and compensatory time only if appears on an employee's earnings statement

(R.C. 124.134, 124.18, 124.382, and 124.386)

Generally continuing law credits each full-time permanent and part-time permanent employee whose salary or wage is paid directly by warrant of the Director of Budget and Management (changed from "the Auditor of State" otherwise by the act) with sick leave of 3.1 hours for each completed 80 hours of service, excluding overtime hours worked.  The act provides that this sick leave is not available for use until it appears on the employee's earning statement and the compensation described in the earning statement is available to the employee.  (R.C. 124.382(B).)

Generally continuing law grants specified vacation leave to (1) certain full-time permanent employees who are paid by warrant of the Director of Budget and Management (changed from "the Auditor of State" otherwise by the act), who are included in the job classification plan established by the Director of Administrative Services, and who are exempt from collective bargaining coverage, (2) full-time permanent employees of the General Assembly, the Supreme Court, or the Governor's office, (3) full-time permanent employees of the Auditor of State, Treasurer of State, Secretary of State, or Attorney General who are in the unclassified civil service and exempt from collective bargaining coverage, and (4) employees who hold positions for which the authority to determine compensation is given by law to a specific individual or entity other than the Director of Administrative Services.  The act provides that this vacation leave is not available for use until it appears on the employee's earning statement and the compensation described in the earning statement is available to the employee.  (R.C. 124.134(A).)

Generally continuing law grants personal leave of 32 hours each year to (1) certain employees who are paid by warrant of the Director of Budget and Management (changed from "the Auditor of State" otherwise by the act), who are included in the job classification plan established by the Director of Administrative Services, and who are exempt from collective bargaining coverage, (2) full-time permanent employees of the General Assembly, the Supreme Court, or the Governor's office, (3) full-time permanent employees of the Auditor of State, Treasurer of State, Secretary of State, or Attorney General who are in the unclassified civil service and exempt from collective bargaining coverage, and (4) employees who hold positions for which the authority to determine compensation is given by law to a specific individual or entity other than the Director of Administrative Services.  The act provides that this personal leave is not available for use until it appears on the employee's earning statement and the compensation described in the earning statement is available to the employee.  (R.C. 124.386(A).)

Continuing law authorizes employees paid in whole or in part by the state or by a state-supported college or university to elect to take compensatory time off in lieu of receiving overtime pay, on a time and one-half basis, at a time mutually convenient to the employee and the employee's administrative superior.  The act provides that compensatory time is not available for use until it appears on the employee's earning statement and the compensation described in the earning statement is available to the employee.  (R.C. 124.18(A).)

Current law provides that the use of sick leave must not be considered to be active pay status for the purposes of earning overtime pay or compensatory time by employees whose wages are paid by warrant of the Director of Budget and Management (changed from "the Auditor of State" otherwise by the act).  The act further provides that the use of any leave in lieu of sick leave must not be considered for these purposes.  (R.C. 124.18(A).)

Holiday pay

(R.C. 124.18)

Former law prohibited an employee paid by warrant of the Auditor of State who was scheduled to work on a holiday and who did not report to work due to an illness of the employee or of a member of the employee's immediate family from receiving holiday pay.  The act instead provides that an employee paid by warrant of the Director of Budget and Management who is scheduled to work on a holiday and who does not report to work the day before, the day of, or the day after a holiday due to an illness of the employee or of a member of the employee's immediate family must not receive holiday pay, unless the employee can provide documentation of extenuating circumstances that prohibited the employee from so reporting to work.  (R.C. 124.18(B)(1).)

Former law entitled an employee whose work schedule was other than Monday through Friday to holiday pay for holidays observed on the employee's day off regardless of the day of the week on which they were observed.  The act entitles such an employee to eight hours of holiday pay for holidays observed on the employee's day off regardless of the day of the week on which they are observed.  (R.C. 124.18(B)(3).)

Former law entitled a flexible-hours employee (an employee who may work more or less than eight hours on any given day as long as the employee works 40 hours in the same week) to holiday pay for the number of hours for which the employee would normally have been scheduled to work.  The act instead provides that a flexible-hours employee, who is normally scheduled to work in excess of eight hours on a day on which a holiday falls, either must be required to work an alternate schedule for that week or must receive additional holiday pay for the hours the employee is normally scheduled to work.  The alternate schedule may require a flexible-hours employee to work five shifts consisting of eight hours each during the week including the holiday.  In such a case, the employee must receive eight hours of holiday pay for the day the holiday is observed.  (R.C. 124.18(B)(4).)

Former law required part-time permanent employees to be paid holiday pay for that portion of any holiday for which they normally would have been scheduled to work.  The act requires that part-time permanent employees receive holiday pay on a pro-rated basis, based upon the daily average of actual hours worked, excluding overtime hours worked, in the previous calendar quarter.  The figure must be calculated for the preceding calendar quarter on the first day of January, April, July, and October of each year.  (R.C. 124.18(B)(5).)

The act also entitles a full-time permanent employee to a minimum of eight hours of holiday pay for each holiday regardless of the employee's work shift and schedule, rather than just eight hours of holiday pay as required by former law (R.C. 124.18(B)(4)).

Other changes relating to sick leave and personal leave

(R.C. 124.382 and 124.386)

Former law authorized a portion of any sick leave credit remaining as of the last day of the pay period preceding the next succeeding base pay period (the pay period that included December 1 of each year) to be converted into cash.  The act eliminates the reference to "next succeeding base pay period" and instead authorizes a portion of any sick leave credit remaining as of the last day of the pay period preceding the first paycheck the employee receives in December to be converted into cash.  (R.C. 124.382(A)(1) and (C).)

Former law credited a newly appointed full-time permanent employee or a nonfull-time employee who received a full-time permanent appointment with personal leave of 32 hours, less 1.2 hours for each pay period that had elapsed following the base pay period (see above), until the first day of the pay period during which the appointment was effective.  Again, the act eliminates the reference to "base pay period" and instead credits a newly appointed full-time permanent employee or a nonfull-time employee who receives a full-time permanent appointment with personal leave of 32 hours, less 1.2 hours for each pay period that has elapsed following the first paycheck the employee receives in December, until the first day of the pay period during which the appointment was effective.  (R.C. 124.386(C).)

Paid leave for attendance as a witness

(R.C. 124.135)

Former law entitled state employees to paid leave when subpoenaed to appear before any court, commission, board, or other legally constituted body authorized by law to compel the attendance of witnesses, if the employee was not a party to the action.  The act continues to entitle a state employee to paid leave when subpoenaed to appear before any court, commission, board, or other legally constituted body authorized by law to compel the attendance of witnesses, but provides that a state employee is not entitled to paid leave if the employee is a party to the action or proceeding involved (similar to the former law) or is subpoenaed to testify as a result of secondary employment outside the service of the state.

Payment of state employees by direct deposit

(R.C. 124.151)

Former law required the payment by direct deposit of the compensation of any employee whose employment commenced on or after June 5, 2002, and who was paid by warrant of the Auditor of State.  The act instead requires that all employees paid by warrant of the Director of Budget and Management be paid by direct deposit except for an employee who was appointed to the employee's current position before June 5, 2002, who is a public employee subject to the Public Employee Collective Bargaining Law, and whose applicable collective bargaining agreement does not require the employee to be paid by direct deposit.  (R.C. 124.151(B)(1) and (2).)

Schedules of rates for certain public employees

(R.C. 124.152)

Overview.  Continuing law provides that certain public employees are paid a wage or salary that is determined using one of four "schedules of rates" set forth in R.C. 124.15 and 124.152. Depending upon the type of employee, there is a specific schedule of rates that applies to and establishes the compensation for the employee.

Managerial and professional employees.  Under generally continuing law, managerial and professional public employees who are permanent employees paid directly by warrant of the Director of Budget and Management (changed from "the Auditor of State" otherwise by the act), whose position is included in the state's job classification plan, and who are exempt from the Public Employee Collective Bargaining Law ("exempt employees") receive wages or salaries based upon the schedule of rates known as "Schedule E-2."[3]  Under the E-2 schedule, there are a certain number of different "pay ranges" to which an employee paid under that schedule is assigned. Then, for each pay range, there is a specific minimum and maximum hourly wage or annual salary that the employee may receive.  (R.C. 124.152(B) and (C).)

Nonmanagerial and nonprofessional employees.  Exempt employees who are not managerial or professional employees paid under Schedule E-2 receive wages or salaries based upon the schedule of rates known as "Schedule E-1." Similar to the E-2 schedule, the E-1 schedule contains a certain number of different pay ranges to which an employee under that schedule is assigned. However, rather than having a minimum and maximum hourly wage and annual salary for each pay range as under the E-2 schedule, pay ranges under the E-1 schedule contain a number of "step values," one to which an employee is assigned, with each step providing for a specifically set hourly wage or annual salary.  (R.C. 124.152(B) and (C).)

Adjustment of schedules of rates.  Under former law, there were two different sets of E-1 and E-2 schedules:  one set that essentially was applicable for pay periods between July 1, 2002, and June 30, 2005, and another set that essentially was applicable for pay periods on and after July 1, 2005. The act eliminates the two sets of E-1 and E-2 schedules mentioned above and enacts new E-1 and E-2 schedules.  The new schedules will apply beginning on the first day of the pay period that includes July 1, 2006, and include a 3% increase in the salaries and wages.  (R.C. 124.152(B).)[4]

Paper layoffs

(R.C. 124.321(E) and 124.324)

Under continuing law, subject to certain limitations, a laid-off employee has the right to displace the employee with the fewest retention points in the classification from which the employee was laid off or in a lower or equivalent classification in a specified order.  Laid-off employees are given a notice of layoff.  If they wish to exercise their displacement rights, they generally must notify the appointing authority within five days after receiving the notice of layoff (this provision is affected by the act's provisions discussed below).  If they choose to displace, the next group of employees goes through the same process until all affected employees are either displaced or laid off.

The act allows the Director of Administrative Services to establish a paper layoff process under which employees who are to be laid off or displaced may be required, before the date of their paper layoff, to preselect their options for displacing other employees.  If this process includes a different notification requirement than the above-mentioned "within five days after receiving the notice of layoff," then that five-day requirement does not apply to employees exercising their displacement rights under the paper layoff process.

Voluntary cost savings program

(R.C. 124.392)

The act allows the Director of Administrative Services to establish a voluntary cost savings program for exempt employees and specifies that, if the Director decides to establish such a program, the Director must adopt rules in accordance with the Administrative Procedure Act to provide for its administration.

Changes to the laws governing health care benefits for state employees

(R.C. 124.82, 124.822, 124.87, 124.92, and 3917.04)

Background law.  Generally continuing law requires the Department of Administrative Services, in consultation with the Superintendent of Insurance and in accordance with the competitive selection procedures of the State Purchasing Law, to contract with an insurance company, or a health plan in combination with an insurance company, authorized to do business in Ohio, for the issuance of a policy or contract of health, medical, hospital, dental, or surgical benefits (or any combination of them) covering state employees paid directly by warrant of the Director of Budget and Management (changed from "the Auditor of State" otherwise by the act), including elected state officials.  In addition, the Department, in consultation with the Superintendent of Insurance, may negotiate and contract with health insuring corporations holding a certificate of authority under Ohio law, in their approved service areas only, for the issuance of a contract or contracts of health care services covering state employees paid directly by warrant of the Director of Budget and Management (changed from "the Auditor of State" otherwise by the act), including elected state officials.  (R.C. 124.82(A) and (B).)

Limitation.  Former law provided that, except for health insuring corporations, no more than one insurance carrier or health plan could be contracted with to provide the same plan of benefits for the described state employees.  The act instead authorizes the Department to enter into contracts with one or more insurance carriers or health plans to provide the same plan of benefits.  (R.C. 124.82(B).)

Condition of entry into a health insuring corporation contract.  Former law mandated that, as a condition of entering into a contract with a health insuring corporation that desired to provide health care services to the state employees (including elected state officials) described above who resided in the corporation's approved service area, the Department required the corporation to enroll the lesser of at least 500 or at least 5% of those eligible employees.  This requirement applied only to contracts entered into or renewed on or after July 16, 1991.  The act repeals this requirement.  (R.C. 124.822--outright repealed by Section 105.01 of the act.)

Health insuring corporation expansion of service area.  Under former law, if the Superintendent of Insurance approved all or a portion of a service area expansion of a health insuring corporation into an additional county or counties, the Department had to authorize the corporation, upon its meeting the Department's established participation criteria, to participate in the next open enrollment for state employees who resided in the expanded service area if, before the expansion of the service area, fewer than two health insuring corporations were available to state employees in the county or counties into which the corporation expanded.  The act eliminates this provision.  (R.C. 124.92--outright repealed by Section 105.01 of the act.)

State Employee Health Benefit Fund.  Continuing law establishes in the state treasury the State Employee Health Benefit Fund for the sole purpose of enabling the Department to provide state employees with the health care insurance coverage described above.  Under former law, amounts from the Fund could be used to pay direct and indirect costs that were attributable to consultants or a third-party administrator and that were necessary to administer the Fund's operation.  The act instead provides that amounts from the Fund may be used to pay direct and indirect costs that are attributable to consultants or third-party administrators and that are necessary to administer the Fund's operation.  (R.C. 124.87(B).)

Group insurance and voluntary supplemental benefit plans.  Former law authorized an employee of the state or of a political subdivision or district of the state to authorize in writing the deduction from the employee's salary or wages of the premium or portion of a premium the employee agreed to pay to an insurer authorized to do business in Ohio for life, endowment, health, accident, or health and accident insurance, annuities, or hospitalization insurance, or a salary savings plan, provided that, in the case of the types of insurance mentioned above, they were offered as group insurance and at least 10% of the employees of a political subdivision or of any department, agency, bureau, district, commission, or board voluntarily elected to participate in that group insurance (R.C. 3917.04(A)).

The act continues these provisions as they apply to employees of political subdivisions or districts of the state, but provides that they no longer apply to employees paid by warrant of the Director of Budget and Management (R.C. 3917.04(A)).

The act also specifies that the Department of Administrative Services only may offer employees paid by warrant of the Director of Budget and Management voluntary supplemental benefit plans that are selected through a state-administered request for proposals process.  If an employee authorizes the Director of Administrative Services, in writing, to deduct the premium or a portion of the premium agreed to be paid by the employee to a voluntary supplemental benefit plan provider from the employee's salary or wages, the Director may deduct this amount from the employee's salary or wages and pay it to the provider.  Only those employees enrolled in a voluntary supplemental benefit plan on or before the act's effective date for these provisions may continue to participate in a plan that was not selected through a state-administered request for proposals process.  (R.C. 3917.04(B)(1).)

Finally, under the act, the Director of Budget and Management may issue warrants covering salary or wage deductions that have been authorized by employees paid by warrant of the Director in favor of a voluntary supplemental benefit plan provider in the amount authorized by those employees (R.C. 3917.04(B)(2)).

Military pay differential

(R.C. 5923.05)

Under continuing law, permanent public employees who are employed by a state agency and who are members of the Ohio organized militia or members of other reserve components of the United States Armed Forces (including the Ohio National Guard) are entitled to a leave of absence without loss of pay for up to one month each calendar year while serving in the uniformed services.  In addition, under continuing law, permanent public employees who are employed by a state agency, who are entitled to the latter leave of absence, and who are called or ordered to the uniformed services for longer than a month pursuant to an executive order of the President of the United States, an act of Congress, or an order of the Governor to the Ohio National Guard to perform training or specified duty (R.C. 5919.29) are entitled to a leave of absence for the designated period and to be paid during each monthly period of that leave of absence the difference between their permanent public employee gross monthly wage or salary and the sum of their military pay and allowances.

The act extends the pay differential provision for permanent public employees who are employed by state agencies to such employees who are ordered to duty for longer than a month by a proclamation of the Governor to aid civil authorities in executing Ohio laws, suppressing insurrection, repelling invasion, acting in a disaster situation, or promoting the health, safety, and welfare of Ohio citizens (R.C. 5923.21).

Governor's Residence Advisory Commission

(R.C. 107.40)

Continuing law creates the Governor's Residence Advisory Commission.  The Commission must provide for the preservation, restoration, acquisition, and conservation of all decorations, objects of art, chandeliers, china, silver, statues, paintings, furnishings, accouterments, and other aesthetic materials that have been acquired, donated, loaned, or otherwise obtained by the state for the Governor's residence.  The act adds that the Commission must provide for the maintenance of plants that have been acquired, donated, loaned, or otherwise obtained by the state for the Governor's residence.  In addition, the act requires that all of the aesthetic materials and plants that have been acquired, donated, loaned, or otherwise obtained by the state for the Governor's residence be approved by the Commission.

Law retained by the act requires the Commission to be responsible for the care, provision, repair, and placement of furnishings and other objects and accessories of the grounds and public areas of the first story of the Governor's residence.  The act adds that the Commission is also responsible for the care and placement of plants on the grounds.  In exercising that responsibility, the Commission must preserve and seek to further establish the grounds as a representation of Ohio's natural ecosystem.

Law unchanged by the act authorizes the Commission to accept any donation, gift, bequest, or devise in furtherance of its duties.  The act expands that authority to allow the Commission to accept any donation, gift, bequest, or devise as an endowment for the maintenance and care of the garden on the grounds of the Governor's residence.

Continuing law states that nothing in the statute governing the Commission limits the ability of a person or other entity to purchase decorations, objects of art, chandeliers, china, silver, statues, paintings, accouterments, or other aesthetic materials for placement in the Governor's residence or donation to the Commission.  No such object, however, must be placed on the grounds or public areas of the first story of the Governor's residence without the consent of the Commission.  The act expands those provisions by including plants in both of the following: (1) the list of objects that may be purchased for placement in the Governor's residence or donation to the Commission, and (2) the prohibition against placement of objects on the grounds or public areas of the first story of the residence without the consent of the Commission.  In addition, the act specifies that the objects on the list, including plants, may be purchased for placement on the grounds of the Governor's residence.

Under law revised in part by the act, the Commission consists of nine members, four of whom represent specific agencies or organizations and five of whom are appointed by the Governor.  The act increases the number of members to 11.  The two new members are the mayor of the city of Bexley, who serves during the mayor's term of office, and the chief executive officer of the Franklin Park Conservatory Joint Recreation District, who serves during the term of employment as chief executive officer.

Continuing law specifies that the five members appointed by the Governor must have knowledge of Ohio history, architecture, decorative arts, or historic preservation.  The act adds that one of those members must have knowledge of landscape architecture, garden design, horticulture, and plants native to Ohio.  The member having this knowledge initially must be appointed upon the first vacancy on the Commission occurring on or after the act's effective date.

Under former law, five members of the Commission constituted a quorum, and the affirmative vote of five members was required for approval of any action of the Commission.  Because the act increases the number of members from nine to eleven, it also increases the quorum and affirmative vote requirements from five to six members.

Membership of the eTech Ohio Commission

(R.C. 3353.02)

The eTech Ohio Commission is an independent agency that assumed the duties of the former SchoolNet Commission and the former Educational Telecommunications Network Commission.  It consists of 13 members, nine of whom are voting members.  Six of the voting members are representatives of the public:  four appointed by the Governor with the advice and consent of the Senate; one appointed by the Speaker of the House; and one appointed by the President of the Senate.  The Superintendent of Public Instruction or a designee of the Superintendent, the Chancellor of the Ohio Board of Regents or a designee of the Chancellor, and the Director of Administrative Services or a designee of the Director are all ex officio voting members.

The act replaces the Director of Administrative Services with the Director of the Office of Information Technology or the Director's designee.

Membership of the Ohio Business Gateway Steering Committee

(R.C. 5703.57)

The Ohio Business Gateway Steering Committee directs the development of the Ohio Business Gateway[5] and oversees its operations.  The Committee consists of the following members:

(1)  Not more than two representatives of the business community, not more than two representatives of municipal tax administrators, and not more than two tax practitioners, all appointed by the Governor with the advice and consent of the Senate;

(2)  The Secretary of State or the Secretary of State's designee;

(3)  The Treasurer of State or the Treasurer of State's designee;

(4)  The Director of Budget and Management or the Director's designee;

(5)  The Tax Commissioner or the Tax Commissioner's designee; and

(6)  The Director of Administrative Services or the Director's designee.

The act replaces the Director of Administrative Services or the Director's designee with the Director of the Office of Information Technology or the Director's designee.

Release of unclaimed public improvement construction funds held in escrow

(Section 506.03)

Under continuing law, if a state or local government entity does not pay the money it owes a contractor under a public improvement contract on the day it is due, the money must be placed in escrow with one or more banks or building and loan associations in Ohio selected by mutual agreement between the contractor and public entity.  The mutual agreement must provide for the deposit of the money into an escrow account or investment of the money by the escrow agent.  Continuing law being modified by the act also requires the agreement to provide for the release of the money to the appropriate party on receipt of notice from the entity and contractor or on receipt of an arbitration or Court of Claims order.

The act provides that if money deposited into such an escrow account by the Department of Administrative Services has not been released due to the failure of the contractor, within three years, to give notice requesting release, the escrow agent must release the money to the Director of Administrative Services if all of the following occur:  (1) the Director notifies the contractor of the existence of the escrowed amount in writing, sent by certified mail to the last known addresses of the contractor and the contractor's statutory agent, if such agent exists, (2) if a mechanics lien has been filed against the contractor for labor performed or materials supplied in connection with the project, the Director notifies the lien claimant of the existence of the escrowed amount in writing, sent by certified mail to the lien claimant's last known address and to the last known address of the lien claimant's statutory agent, if such agent exists, and (3) the contractor or statutory agent and, if applicable, the lien claimant or statutory agent fail to respond to the notice within 60 days after the notice is sent.  The Director is required to deposit the released money into the State Architect's Fund.  The released money must be considered an additional fee related to the administration of the contract for which the escrow deposit was made.

 

·        Requires a criminal records check of persons under final consideration for employment with the Office of the State Long-Term Care Ombudsperson Program in a position that involves providing ombudsperson services to residents of long-term care facilities and recipients of community-based long-term care services.

·        Expands the requirement that persons under final consideration for employment with a PASSPORT agency in a position that involves providing direct care to an older adult undergo a criminal records check to persons under final consideration with any community-based long-term care agency in a position that involves providing direct care to an individual of any age.

·        Expressly adds transportation services as a service that is considered a community-based long-term care service for purposes of state law governing ombudsperson services and certification of community-based long-term care agencies.

 

 

Criminal records checks for ombudspersons

(R.C. 173.27, 109.57, 109.572, and 173.14)

The Department of Aging is required to establish and operate a long-term care ombudsperson program, which is known as the Office of the State Long-Term Care Ombudsperson Program.  The Office consists of the State Long-Term Care Ombudsperson, the Ombudsperson's staff, and regional long-term care ombudsperson programs.  Among the Office's duties are to receive, investigate, and attempt to resolve complaints regarding the health, safety, welfare, or civil rights of residents of long-term care facilities, such as nursing homes, or recipients of community-based long-term care services.[6]

The act requires the State Long-Term Care Ombudsperson or the Ombudsperson's designee to request that the Superintendent of the Bureau of Criminal Identification and Investigation (BCII) conduct a criminal records check with respect to each job applicant who is under final consideration for employment with the Office, including a regional program, in a full-time, part-time, or temporary position that involves providing ombudsperson services to residents of long-term care facilities or recipients of community-based long-term care services.  The Director of Aging is to request the criminal records check if the applicant is under final consideration for employment as the State Long-Term Care Ombudsperson.  The applicant must be informed when he or she initially applies for the job that a criminal records check is required and that the applicant must provide a set of fingerprint impressions if the applicant comes under final consideration for the job.  A criminal records check is not required for a person who provides ombudsperson services as a volunteer without receiving or expecting to receive any form of remuneration other than reimbursement for actual expenses.

If the job applicant does not present proof of having resided in Ohio for the five-year period immediately before the date the criminal records check is requested or provide evidence that within that period the Superintendent has requested information about the applicant from the Federal Bureau of Investigation (FBI) in a criminal records check, the criminal records check request must ask that the Superintendent obtain information from the FBI as part of the criminal records check.  Even if the applicant presents such residence proof, the criminal records check request may ask for the additional FBI information.

The State Long-Term Care Ombudsperson, Ombudsperson's designee, or Director must provide the job applicant a copy of a form prescribed by the Superintendent to obtain the information necessary to conduct the criminal records check.  The person must also be provided with a standard fingerprint impression sheet prescribed by the Superintendent.  The Ombudsperson, designee, or Director is required to forward the completed form and impression sheet to the Superintendent.  The applicant must be denied the job if he or she fails to complete the form or provide fingerprint impressions.

The Office of the State Long-Term Care Ombudsperson Program is required to pay BCII the fee prescribed by the Superintendent for conducting the criminal records check.  However, the Office is permitted to require that the job applicant reimburse the Office for all or part of the fee if the Office notifies the applicant at the time of initial application of the amount that the applicant must pay to the Office.

The job applicant is not to be hired if the applicant has been convicted of or pleaded guilty to certain offenses unless the applicant meets personal character standards that the Director is required to include in rules.  The following are the disqualifying offenses:  aggravated murder, murder, voluntary manslaughter, involuntary manslaughter, felonious assault, aggravated assault, assault, failing to provide for a functionally impaired person, aggravated menacing, patient abuse or neglect, kidnapping, abduction, extortion, coercion, rape, sexual battery, gross sexual imposition, sexual imposition, importuning, voyeurism, public indecency, felonious sexual penetration, prostitution, disseminating material harmful to juveniles, pandering obscenity, pandering obscenity involving a minor, pandering sexually oriented matter involving a minor, illegal use of a minor in nudity-oriented material or performance, aggravated robbery, robbery, aggravated burglary, burglary, breaking and entering, theft, unauthorized use of a vehicle, unauthorized use of property, passing bad checks, misuse of credit cards, forgery, Medicaid fraud, securing writings by deception, insurance fraud, receiving stolen property, domestic violence, illegal conveyance of certain items onto grounds of detention facility or mental health or mental retardation and developmental disabilities facility, carrying concealed weapons, having weapons while under disability, improperly discharging firearm at or into a habitation or school safety zone, corrupting another with drugs, drug trafficking, drug possession, permitting drug abuse, deception to obtain a dangerous drug, illegal processing of drug documents, adulteration of food, or an existing or former law of this state, any other state, or the United States that is substantially equivalent to any of those offenses.

The job applicant may be hired conditionally pending the results of the criminal records check if the check is requested not later than five business days after the applicant begins the conditional employment.  The conditional employment must be terminated if the results, other than results of a request for information from the FBI, are not obtained within 60 days of the date the criminal records check is requested.  The conditional employment must also be terminated if the results indicate that the applicant has been convicted of or pleaded guilty to any of the disqualifying offenses unless the applicant meets the personal character standards set in rules.[7]  Such termination of the conditional employment is considered just cause for discharge for the purpose of denying unemployment compensation if the applicant made any attempt to deceive the Ombudsperson about his or her criminal record.

The report of the criminal records check is not a public record and may be made available only to the following:

·        The job applicant or the applicant's representative.

·        The State Long-Term Care Ombudsperson, Ombudsperson's designee, Director of Health, or a representative of those individuals.

·        If the Ombudsperson designates the head or other employee of a regional long-term care ombudsperson program to make the criminal records check request, a representative of the Office of the State Long-Term Care Ombudsperson Program who is responsible for monitoring the regional program's compliance with the act's provisions regarding the criminal records check.

·        A court, hearing officer, or other necessary individual involved in a case dealing with the applicant's denial of employment or the applicant's employment or unemployment benefits.

The act includes provisions regarding civil actions for damages brought as a result of an injury, death, or loss to person or property caused by an individual the Office of the State Long-Term Care Ombudsperson Program employs in a position for which a criminal records check is required.  If an individual is so employed in good faith and reasonable reliance on the report of the criminal records check, the Office may not be found negligent solely because of its reliance on the report, even if the information in the report is determined later to have been incomplete or inaccurate.  If the Office conditionally employed the individual in good faith pending the results of the criminal records check, the Office may not be found negligent solely because it employed the individual before receiving the report of the criminal records check.  If the Office in good faith employed the individual according to the personal character standards set in the Director's rules, the Office may not be found negligent solely because the individual prior to being employed had been convicted of or pleaded guilty to a disqualifying offense.

The Director of Aging is required to adopt rules to implement the act's provisions regarding the criminal records check.  The rules must specify circumstances under which the long-term care ombudsperson program may employ a job applicant who has been convicted of or pleaded guilty to a disqualifying offense but meets personal character standards set by the director.

In addition to requiring a criminal records check for an individual under consideration for employment with the Office of the State Long-Term Care Ombudsperson Program in a full-time, part-time, or temporary position that involves providing ombudsperson services to residents of long-term care facilities or recipients of community-based long-term care services, the act permits the State Long-Term Care Ombudsperson, Ombudsperson's designee, or Director of Health to request that the Superintendent of BCII investigate and determine whether BCII has any information that pertains to an individual who has applied for employment in a position that does not involve providing ombudsperson services.

Criminal records check for community-based long-term care agencies

(R.C. 173.394, 109.57, 109.572, 173.39, and 173.391)

Continuing law requires that a job applicant under final consideration for employment with a PASSPORT agency (a public or private entity that provides home and community-based services to individuals through the Medicaid waiver program known as PASSPORT) in a position that involves providing direct care to such older adults undergo a criminal records check.[8]  The chief administrator of the PASSPORT agency must request that the Superintendent of the Bureau of Criminal Identification and Investigation conduct the criminal records check unless the applicant has been referred by an employment service and the service or the applicant makes the request to the Superintendent.  The PASSPORT agency may not hire the applicant for the position if the applicant has been convicted of or pleaded guilty to a disqualifying offense unless the applicant meets personal character standards set by rule adopted by the Director of Aging.  The applicant may be employed conditionally pending results of the criminal records check.  The law governing these criminal records checks is very similar to the provisions of the act regarding criminal records checks for individuals under final consideration for employment with the Office of the State Long-Term Care Ombudsperson Program, including the list of disqualifying offenses.[9]

The act expands the criminal records check requirements to job applicants under final consideration for employment with any community-based long-term care agency, not just PASSPORT agencies, in a position that involves providing direct care.  The act applies the requirement to positions that involve providing direct care to individuals of any age.  "Community-based long-term care agency" is defined as an individual, private entity, or government entity, including a PASSPORT agency, that provides community-based long-term care services[10] under a program the Department of Aging administers.

The results of a criminal records check for a community-based long-term agency may be made available only to the following:

·        The job applicant or applicant's representative.

·        The chief administrator of the agency that requested the check or the agency's representative.

·        The administrator of any other facility, agency, or program that provides direct care to individuals[11] and is owned or operated by the same entity that owns or operates the agency that requested the check.

·        A court, hearing officer, or other necessary individual involved in a case dealing with the applicant's denial of employment or the applicant's employment or unemployment benefits.

·        The employment service that referred the applicant to the agency.

·        The Director of Aging or a person authorized by the Director to monitor a community-based long-term agency's compliance with the criminal records check requirement.

Definition of "community-based long-term care services"

(R.C. 173.14)

As discussed above, state law governing the Office of the State Long-Term Care Ombudsperson Program provides that one of the Office's duties is to receive, investigate, and attempt to resolve complaints regarding the health, safety, welfare, or civil rights of recipients of community-based long-term care services.  State law also prohibits the Department of Aging from paying a person or government entity for providing community-based long-term care services under a program the Department administers unless the person or government entity is certified by the Department or provides the services under a contract with the Department that includes detailed conditions of participation and service standards.[12]

"Community-based long-term care services" are health and social services provided to persons in their own homes or in community care settings, including case management, home health care, homemaker services, chore services, respite care, adult day care, home-delivered meals, personal care, physical therapy, occupational therapy, speech therapy, and any other health and social services that allow persons to retain their independence in their own homes or in community care settings.  The act expressly adds transportation services as a service that is a community-based long-term care service.

 

·        Changes the composition of the Farmland Preservation Advisory Board by removing the representative of the Natural Resources Conservation Service in the United States Department of Agriculture and replacing that member with a person representing soil and water conservation interests.

·        Requires the Department of Agriculture to refund money collected under the law governing the sale of vegetable and flower seeds to vegetable and flower seed labelers who sold seeds in packages of specified sizes from January 1, 2004, through December 31, 2005.

·        Requires the Department to notify those seed labelers who may be eligible for a refund, and requires a seed labeler who may be eligible for a refund to provide information that the Department requests in order to determine if the seed labeler is eligible for a refund.

·        Requires the Director of Agriculture to use money appropriated to the continuing Commercial Feed, Fertilizer, Seed, and Lime Inspection and Laboratory Fund to pay the refunds.

 

 

Farmland Preservation Advisory Board

(R.C. 901.23; Section 709.03)

Continuing law establishes the Farmland Preservation Advisory Board, which consists of 12 voting members appointed by the Director of Agriculture.  Each member serves a three-year term, and the terms are staggered so that only four members' terms expire in any given calendar year.  Under former law, one of the members of the Board was required to be a representative of the Natural Resources Conservation Service in the United States Department of Agriculture.  The act eliminates the member from the Natural Resources Conservation Service and replaces that member with a person representing soil and water conservation interests.  The act then specifies that the person representing soil and water conservation interests must serve the remainder of the term that would have been served by the member from the Natural Resources Conservation Service.

Fee refunds for certain vegetable and flower seed labelers

(Section 709.06)

Law unchanged by the act requires a person who holds a seed labeler permit to file with the Director of Agriculture a semiannual report on the amount of seed that the person sells in this state.  The seed labeler must include with the report a fee that is based on the amount of seed that the person sold.  Sub. S.B. 189 of the 126th General Assembly, which was enacted in early 2006, revises the requirements governing the calculation of the fee to be paid by vegetable and flower seed labeler permit holders.  The act requires the Department of Agriculture to refund money collected from the fee as it existed prior to the law's amendment by Sub. S.B. 189 of the 126th General Assembly to either or both of the following:

(1)  Vegetable seed labelers who sold vegetable seeds in hermetically sealed containers of eight ounces or less with a seed count of 1,000 seeds or more from January 1, 2004, through December 31, 2005; and

(2)  Flower seed labelers who sold flower seeds in hermetically sealed containers of eight ounces or less containing more than 300 seeds from January 1, 2004, through December 31, 2005.

The act requires the Department to notify those seed labelers who may be eligible for such a refund.  The Department may request, and a seed labeler who may be eligible for a refund must provide, any information that the Department requests in order to determine if the seed labeler is eligible for a refund.  The Department has exclusive discretion in determining eligibility for refunds.  The Director of Agriculture must use money appropriated to the continuing Commercial Feed, Fertilizer, Seed, and Lime Inspection and Laboratory Fund to pay the refunds authorized under the act.

 

·        Specifies when various classes of debts fall due for the purpose of when they have to be certified to the Attorney General for collection.

·        Authorizes the Attorney General to sell through a competitive process to any person claims arising from debts that are not paid within a specified period of time, that are certified to the Attorney General for collection, and that have become "final overdue claims."

·        Provides that if a final overdue claim is sold, conveyed, or transferred to a private entity, federal confidentiality laws applicable to information contained in the claim still apply during and after the sale, conveyance, or transfer.

 

 

Debts owed to the state

Certification of debts to the Attorney General for collection

(R.C. 131.02)

Under continuing law, whenever any amount owed to the state is not paid within 45 days after payment is due, the public official responsible for administering the law under which the debt arose must certify the debt to the Attorney General for collection.  The act retains this provision, but specifies that the provision does not apply to worker's compensation claims and specifies when various classes of debts fall due for the purpose of when they must be certified to the Attorney General under the provision.

Under the act, the Attorney General and the officer, employee, or agent responsible for administering the law under which the amount is payable must agree on the time a payment is due, and the agreed upon times must be one of the following times:

(1)  If a law of Ohio, including an administrative rule, prescribes the time a payment is required to be made or reported, when the payment is required by that law to be paid or reported;

(2)  If the payment is for services rendered, when the rendering of the service is completed;

(3)  If the payment is reimbursement for a loss, when the loss is incurred;

(4)  In the case of a fine or penalty for which a law or administrative rule does not prescribe a time for payment, when the fine or penalty is first assessed;

(5)  If the payment arises from a legal finding, judgment, or adjudication order, when the finding, judgment, or order is rendered or issued;

(6)  If the payment arises from an overpayment of money by the state to another person, when the overpayment is discovered;

(7)  The date on which the amount for which an employee or specified official of a corporation or business trust is personally liable for unpaid tax under the motor fuel tax, sales tax, or personal income tax law is determined;

(8)  Upon proof of a claim being filed in a bankruptcy case;

(9)  Any other appropriate time determined by the Attorney General and the officer, employee, or agent responsible for administering the law under which the amount is payable on the basis of statutory requirements or the business processes of the agency to which the debt is owed.

Sale of final overdue claims to any person

(R.C. 131.022)

The act authorizes the Attorney General, pursuant to a procedure it enacts, to sell to any person certain claims arising from debts that are certified to the Attorney General for collection pursuant to the provision described above in "Certification of debts to the Attorney General for collection."  Under the act, the Attorney General, subject to the approval of the chief officer of the agency reporting the claim and of the Controlling Board, may sell such a claim to any person through a competitive process at any time after it has become a "final overdue claim."  However, if federal funds comprise all or part of a claim, the Attorney General cannot sell it until the chief officer determines that the sale will not adversely impact the state due to any federal repayment requirements.  The Attorney General may consolidate any number of final overdue claims for sale under the provisions.

Not less than 60 days before first offering a final overdue claim for sale, the Attorney General is required to provide written notice, by ordinary mail, to the person owing the claim (the debtor) at that person's last known mailing address.  The notice must state the nature and amount of the claim and the manner in which the debtor may contact the Attorney General to arrange terms to pay the claim.  The notice also must state that, if the debtor does not contact the Attorney General within 60 days after the date the notice is issued and arrange terms to pay the claim, then the claim will be offered for sale to a private party for collection by that party by any legal means, the debtor is deemed to be denied any right to seek and obtain a refund of any amount from which the claim arises if the applicable law otherwise allowed for such a refund; and, generally, the debtor is deemed to waive any right the debtor may have to confidentiality of information regarding the claim to the extent it is provided under any other Revised Code section.  (If information contained in a claim that is sold, conveyed, or transferred to a private entity is confidential pursuant to federal law or a Revised Code section that implements a federal law governing confidentiality, the information remains subject to that law during and following the sale, conveyance, or transfer.  Additionally, the private entity is bound by all state and federal confidentiality requirements regarding the information.)

Upon the sale of a final overdue claim under the provisions, the claim becomes the property of the purchaser, and may be sold or otherwise transferred to any other person or otherwise disposed of.  The owner of the claim is entitled to all proceeds from the collection of the claim, except that the owner must reimburse the state for any costs it incurs assisting and facilitating the claim's collection after the sale.  Those costs can include costs of time expended by state employees.  Purchasers or transferees of a final overdue claim are subject to applicable laws governing collection of debts of the kind represented by the claim.  Upon the sale or transfer of a final overdue claim, no refund may be issued or paid to the debtor for any part of the amount from which the claim arose.

The act specifies that, notwithstanding any other Revised Code provision, the Attorney General, solely for the purpose of selling or transferring a final overdue claim under the provisions, may disclose information about the debtor that otherwise would be confidential under a Revised Code section, and the debtor has no right of action against such disclosure to the extent that such a right was available under that section.

The act specifies that the authority granted under the sale provisions are supplemental to the authority granted under the provision described above in "Certification of debts to the Attorney General for collection."  The act also provides that the sale or transfer of a final overdue claim, or of an uncollectible claim under current law, does not compromise any criminal, civil, or administrative action of the state against any person owing the claim.

The act specifies that, as used in the sale provisions:

(1)  A "final overdue claim" is a claim that has been certified to the Attorney General under the provision described above in "Certification of debts to the Attorney General for collection," that has been "final" for at least one year, and for which no arrangements have been made for the payment thereof or, if such arrangements have been made, the debtor has failed to comply with the terms of the arrangement for more than 30 days.  "Final overdue claim" includes collection costs incurred with respect to the claim that is the basis of the final overdue claim and assessed by the Attorney General, interest accreting to the claim, and fees.

(2)  "Final" means a claim has been finalized under the law providing for the imposition or determination of the amount due, and any time provided for appeal of the amount, legality, or validity of the claim has expired without an appeal having been filed in the manner provided by law.  "Final" includes, but is not limited to, a final determination of the Tax Commissioner for which the time for appeal has expired without notice of appeal having been filed.

 

·        Transfers to the Director of Budget and Management the functions of the Auditor of State related to the drawing of warrants for the payment or transfer of money from the state treasury.

 

Payment function transferred to the Director of Budget and Management

(R.C. 9.41, 113.09, 113.11, 113.12, 124.09, 124.11, 124.137, 124.138, 124.139, 124.14, 124.151, 124.152, 124.18, 124.181, 124.182, 124.321, 124.327, 124.382, 124.384, 124.387, 124.389, 124.391, 124.82, 124.821, 124.822, 124.823, 124.84, 125.21, 126.07, 126.21, 126.22, 126.35, 126.36, 126.37, 126.38, 131.01, 131.33, 141.08, 141.10, 145.70, 742.57, 1523.02, 2503.20, 3307.32, 3309.68, 3701.041, 5115.04, 5505.27, and 5747.11; Sections 515.03 and 812.09)

Money cannot be paid or transferred out of the state treasury except on the warrant of the Auditor of State.  When such warrants are presented to the Treasurer of State, the Treasurer of State is required to pay them.

Under the act, the Director of Budget and Management is to replace the Auditor of State--effective December 1, 2006--in all matters relating to the drawing of warrants for the payment or transfer of money from the state treasury.  The Auditor of State and the Director of Budget and Management are required to identify the employees of the Auditor's office assigned to this payment function who will be transferred to the Office of Budget and Management.  That transfer is to occur on July 1, 2007, or as soon as possible after that date.

Additionally, the act expressly authorizes the Director of Budget and Management to enter into any contract necessary for and incidental to the performance of the Director's duties or the duties of the Office of Budget and Management.

 

·        Raises from $100 to $250 the per-sale, statutory cap on a documentary service charge payable under certain retail installment contracts.

·        Exempts from the Small Loans Law any entity who is licensed under Ohio insurance laws that makes advances or loans to other persons also licensed to sell insurance under those laws and authorized by the first entity to sell insurance.

·        Exempts minors who are at least 16 years of age and who are employed by a seasonal amusement or recreational establishment from having to present a work permit in order to work at the establishment, modifies specific hour restrictions for employment of those minors, and exempts those establishments from having to obtain or provide proof of a minor's age.

Retail installment contract charges

(R.C. 1317.07)

Continuing retail installment sales law permits a retail installment contract to include agreements for payment of delinquent charges, taxes, and filing, recording, or release fees, as well as payment of a capped "documentary service charge customarily and presently being paid on May 9, 1949, in a particular business and area."  The act raises to $250 the $100 cap on a documentary service charge.  The cap most recently was increased from $50 to $100 in Am. Sub. H.B. 95 of the 125th General Assembly.

Persons licensed under Ohio insurance laws exempt from Small Loans Law

(R.C. 1321.02)

Continuing law requires any person to obtain a license from the Division of Financial Institutions before (1) engaging in the business of lending money, credit, or "choses in actions," such as a debt, claims for damages, or shares or stock, in amounts of $5,000 or less, or (2) exact, contract for, or receive, directly or indirectly, on or in connection with any such loan, any interest and charges that in the aggregate are greater than the interest and charges that the lender would be permitted to charge for a loan of money if the lender were not a licensee.

Under continuing law, certain persons are exempt from this license requirement.  The act adds an exemption for any entity who is licensed under Ohio insurance laws (R.C. Title 39) that makes advances or loans to any person who also is licensed to sell insurance under those laws and that is authorized in writing by that first entity to sell insurance.

Work permits and proof of age for minors at seasonal amusement or recreational establishments

(R.C. 4109.01, 4109.02, and 4109.06)

Under continuing law, unless otherwise exempted, no employer may employ a minor of compulsory school age unless the minor presents to the employer a proper age and schooling certificate, also known as a work permit.  The act completely exempts minors who are at least 16 years of age and who are employed by a seasonal amusement or recreational establishment from presenting a work permit in order to work at the establishment.  Under former law, a minor who was 16 or 17 years of age and who was to be employed not more than two months before the last day of the school term in the spring and not more than two months after the first day of the school term in the fall by a seasonal amusement or recreational establishment, as defined under continuing law, did not have to present a work permit, on the condition that all of the following were satisfied:

(1)  The superintendent of schools of the school district where the minor resides or the chief administrative officer of the nonpublic or community school the child attends did not require the minor to present a work permit;

(2)  For the period prior to Memorial Day and after Labor Day while school was in session, the minor was to be employed only for hours that occurred between the end of the school day on Friday and 11 p.m. on Sunday;

(3)  For the period from Memorial Day until the last day of the school term in the spring and from the first day of the school term in the fall until Labor Day, the minor was to be employed only for hours that occurred between the end of the school day and 9 p.m. on Monday through Thursday and only for hours that occurred between the end of the school day on Friday and 11 p.m. on Sunday.

The act also eliminates the hour restrictions described under (2) and (3) above.  Thus, under the act, those minors are subject to the same general hour restrictions as other minors who are 16 or 17 years of age.

Additionally, the act specifies that the following prohibitions no longer apply to seasonal amusement and recreational establishments with respect to employing minors who are age 16 or 17:  (1) employing a minor before thoroughly reviewing the minor's work permit, (2) failing to give notice to the superintendent of schools or chief administrative officer who issued the permit of the nonuse of the permit within five working days from such minor's withdrawal or dismissal from the employer's service, (3) continuing to employ a minor after the minor's permit is void, or (4) refusing to permit an enforcement official to observe the conditions under which minors are employed or to make reasonable inquiry of minors or persons supposed by such official to be under 18 in regard to matters pertaining to their age, employment, or schooling.  Also, with respect to minors who are at least 16 years of age, the act specifically exempts seasonal amusement and recreational establishments from having to (1) produce satisfactory evidence that an employee who is apparently under 18 years of age and who does not have a work permit on file with the Director of Commerce is in fact 18 years of age or older, (2) obtain proof of a minor's age, and (3) obtain a signed statement from a minor's parent or guardian consenting to the proposed employment.

 

·        Removes the Minority Development Financing Advisory Board's authority to assist the Director of Development in guaranteeing bonds for minority or EDGE businesses or to make recommendations or give advice to the Director regarding the bond guarantee program.

·        Authorizes the Director, with Controlling Board approval, to approve applications for surety bond guarantees in an amount requested to support one fiscal year of each surety bond company's activity.

·        Eliminates a financial gain prohibition imposed on members of the Third Frontier Commission and Third Frontier Advisory Board regarding research and development support awards.

·        Authorizes the Director of Development to appoint as the Director's designee to serve on the Ohio Water Development Authority a person in the unclassified civil service rather than an assistant or deputy director as authorized under general provisions of continuing law.

 

 

Minority Development Financing Advisory Board and the Surety Bonding Program

(R.C. 122.72, 122.73, 122.74, and 122.90)

Prior law required the Minority Development Financing Advisory Board must assist the Director of Development in carrying out various programs related to minority business development.  One such program authorizes the Director of Development to guarantee bonds executed by sureties for minority or EDGE businesses (businesses whose owners can demonstrate economic or social disadvantage), who are principals in a contract with the state, a political subdivision, or instrumentality of the state.  The act eliminates the Board's authority to assist the Director of Development with respect to the Director's responsibilities in guaranteeing bonds for minority or EDGE businesses.

The act further authorizes the Director, with Controlling Board approval, to approve one application per fiscal year from each surety bond company for bond guarantees in an amount to support one fiscal year of that company's activity.  The act reaffirms that this new option does not prevent a company from also applying for individual bond guarantees for individual contracts as is otherwise authorized in law.

Elimination of a financial gain prohibition regarding research and development support awards

(R.C. 184.20)

Under continuing law, one of the duties of the Third Frontier Commission is to award support to individuals, public agencies and institutions, private companies or organizations, research organizations, or consortiums of any of the foregoing for the purpose of supporting research and development projects (R & D).  One of the duties of the Third Frontier Advisory Board is to provide the Commission advice on making those R & D support awards.  With respect to the awards, prior law also provided that Commission and Board members were not permitted to receive any financial gain from an entity that was awarded R & D support if that gain was directly related to, or was the direct result of, the awarding of the support.  The act eliminates that prohibition.

Director of Development's designee on Ohio Water Development Authority

(R.C. 121.05 (not in the act) and 6121.02)

Under continuing law, the Director of Development is required to serve as an ex officio member of the Ohio Water Development Authority.  Continuing law also establishes a general provision stating that if a director of a department is required to serve on any board, committee, authority, or commission, the director may designate a deputy director or assistant director of the department to serve in the director's stead.[13]  With respect to the Ohio Water Development Authority, the act establishes an exception to the general provision by authorizing the Director of Development to designate a person in the unclassified civil service to serve in the Director's place as a member of the Authority.

 

School Employees Health Care Board

·        Extends deadlines regarding the work of the School Employees Health Care Board.

School district debt limits

·        Excludes certain business property from the determination of a school district's net indebtedness compared to its tax valuation.

·        Permits school districts to issue debt in excess of the statutory debt limits to cover "required locally funded initiatives" and site acquisition associated with a state-funded classroom facilities project.

·        Specifies that unvoted securities issued to pay a school district's portion of a state-assisted classroom facilities project do not count toward the statutory limit on other unvoted school district debt.

·        Changes the deadline for school districts to request consent from the state Superintendent of Public Instruction and Tax Commissioner to issue debt to 105 days (from 30 days) prior to the election, and requires the state Superintendent to notify a school district of the decisions within 30 days after receiving the request.

·        If a school district's voters reject the issuance of debt, permits the district to re-submit the question at the next election without again seeking consent.

Educational Choice scholarships

·        Expands eligibility for Educational Choice scholarships to include students whose district school has been in a state of academic watch or academic emergency (instead of academic emergency only) for three consecutive years.

·        Qualifies for an Educational Choice scholarship a student entering kindergarten or enrolled in a community school whose resident district has been in academic emergency for three consecutive years if the resident district does not automatically assign the student's grade level to any particular school building.

·        Permits the Department of Education to have access to student data verification codes for administering the Educational Choice Scholarship Pilot Program, and requires the Department to assign the data verification code for an entering kindergartener awarded a scholarship if the resident district does not assign one by the Department's deadline.

·        Specifies that the Department's documents relative to the Educational Choice Scholarship Pilot Program are generally public records, except for documents that contain both a student's data verification code and personally identifiable student data.

·        Clarifies that the Department must restore to a scholarship student's resident district a portion of the amount previously deducted for a student who withdraws from the chartered nonpublic school and enrolls in a community school.

·        Indicates that chartered nonpublic schools participating in the Educational Choice Scholarship program must comply with rules adopted by the State Board of Education for the program's administration.

Twice-annual reporting of formula ADM

·        Delays until FY 2007 implementation of a second certification of formula ADM in each fiscal year.

·        Changes the week for the second reporting of formula ADM to the first (instead of the third) full week of February.

·        Specifies that, when twice-annual reporting of formula ADM begins in FY 2007, operating payments to school districts for the entire fiscal year continue to be based on one annualized formula ADM figure.

·        Requires the Department of Education to propose to the General Assembly a penalty for school districts and community schools that intentionally report inaccurate attendance data.

·        Prohibits a school district from requiring a student to attend school for a specified number of terms in order to receive a diploma, provided the student has completed the district's curriculum requirements.

·        Prohibits including in a school district's formula ADM any student who has graduated from a nonpublic high school.

School district tuition law changes

·        Specifies that tuition owed by one school district to another, in the case of a disabled child placed by a juvenile court and receiving special education, be calculated and paid in accordance with the state Special Education Law, which generally requires the "district of residence" of the child's parent to bear the cost of educating the child.

·        Establishes a mechanism for a juvenile court, upon recommendation from the Department of Education, to change the school district ordered to bear the cost of educating a child placed by the court.

·        Sets conditions that must be satisfied for a school district educating a disabled child to seek payment of tuition and excess costs from the district of residence.

·        Specifies that if a disabled child's custodial parent makes a unilateral placement of the child, the parent is responsible for payment of tuition.

Federal school food programs

·        Expands the requirement for school districts to participate in federal breakfast and lunch programs to cover schools where at least one-fifth (instead of one-third, as under former law) of the students are eligible under federal guidelines for free breakfasts and lunches.

·        Requires school districts to offer a federal food program for all state-mandated summer intervention programs.

·        Requires community schools (except e-schools) to participate in federal breakfast and lunch programs if at least one-fifth of the students are eligible under federal guidelines for free breakfasts and lunches, and to offer a federal food program for state-mandated summer intervention programs.

·        Allows school districts and community schools to opt out of the new food service requirements if they cannot afford to implement the programs and they provide notice of the decision.

Community schools

·        Clarifies that the requirement that entities approved to sponsor community schools on or after June 30, 2005, have a record of financial responsibility and successful implementation of educational programs applies to private federally tax-exempt entities.

·        Prohibits a community school from sponsoring another community school.

·        Requires the contract between the sponsor and governing authority of a new community school to be signed by May 15 prior to the school year in which the school will open.

·        Prohibits including in the enrollment of a community school any student who (1) is a high school graduate, (2) is not an Ohio resident, (3) was enrolled in the school during the previous school year when achievement tests were administered but did not take a required test and did not have a statutory exemption or waiver from the test, or (4) is over 21 years old and is not a qualifying veteran.

·        Allows the Superintendent of Public Instruction to grant community school students waivers from the achievement tests only for good cause in accordance with State Board of Education rules.

·        Specifies that if the Superintendent of Public Instruction grants a waiver from an achievement test to a student enrolled in an Internet- or computer-based community school (e-school) or a similar school district-operated school, the waiver does not exempt the student from a provision requiring the school to withdraw any student who fails to take all applicable achievement tests for two consecutive years, unless the student's parent pays tuition.

·        Clarifies that a student for whom tuition is owed for failure to take achievement tests is not included in an e-school's enrollment count or a school district's ADM for state funding purposes.

·        Delays until the 2007-2008 school year the mandate for certain community schools to administer fall and spring reading and math assessments and the sanctions for community schools failing to show expected gains on those assessments.

·        Eliminates explicit authority for a member of a community school governing authority (1) to be an employee of the school or (2) to have an interest in a contract entered into by the governing authority.

School district funding

·        Clarifies that a school district's funding for the previous fiscal year, for purposes of calculating transitional aid payments, is determined based on the final reconciliation of data by the Department of Education.

·        To facilitate "gap aid" phase-out payments, requires the Department of Education each year to send the Tax Commissioner a list of school districts receiving gap aid payments and requires the Tax Commissioner to certify to the Department, for each district on the list, the amount of new property taxes and new school district income taxes collected for current expenses.

·        Specifies that school districts receiving payment for all-day kindergarten also may allocate other poverty-based assistance components, including academic intervention payments, for all-day kindergarten.

Other education provisions

·        Requires the school district, community school, or nonpublic high school in which the student is enrolled, instead of the state Superintendent of Public Instruction, to seek reimbursement of state payments if a high school student does not receive a passing grade in a college course under the Post-Secondary Enrollment Options Program.

·        Stipulates that "pervasive developmental disorder--not otherwise specified" (PDD-NOS) is considered autism for purposes of the Autism Scholarship Program.

·        Accelerates the effective date of the following provisions from July 1, 2006, to March 30, 2006:  (1) authorization for the State Board of Education to require the use of student data verification codes to protect student confidentiality, (2) the requirement to include student data verification codes on achievement tests, and (3) the provision prohibiting entities hired to score the achievement tests from releasing test scores, except to students' school districts.

·        Requires state institutions that serve special education students to use a student's data verification code when applying for tuition reimbursement from the student's resident school district.

·        Requires the Department of Education to disaggregate the number of disabled preschool children served in the previous fiscal year by developmental deficiency when reporting that number to the General Assembly.

·        Requires contracting entities to complete value-added analyses of student data commissioned by the Department of Education in accordance with timelines established by the Superintendent of Public Instruction.

·        Eliminates the July 1, 2003, cut-off date for merging educational service centers to determine for themselves the size and method of election of the new service center's governing board.

·        Removes obsolete references to education subsidies for which the General Assembly has not appropriated funds for several years.

·        Removes references in two statutes to the Legislative Office of Education Oversight.

 

 

School Employees Health Care Board

(R.C. 9.901; Section 803.03)

Am. Sub. H.B. 66 of the 126th General Assembly (the main operating budget for the 2005-2007 biennium) created the School Employees Health Care Board to design medical insurance plans for all public school employees.  Although the requirement for public school employees to begin using the Board's plans does not take effect until the General Assembly enacts future legislation ordering the plans' implementation, the Board still has several responsibilities in preparing for use of the plans.  The act extends various deadlines regarding the Board's work as shown in the table below.  It also explicitly states that the act's changes are not to be construed to be the further legislative action necessary to implement the Board's medical plans.

Responsibility

Prior deadline

New deadline

An independent consultant hired by the Board must make recommendations for legislation needed to establish and maintain medical plans for public school employees

December 31, 2005

December 31, 2006

The Governor, the Speaker of the House of Representatives, and the President of the Senate must make initial appointments to the Public Schools Health Care Advisory Committee, which advises the Board on its duties

July 31, 2005

July 31, 2007

The Board must submit a governance and operational plan to the Governor and General Assembly

January 15, 2006

January 31, 2007

The Department of Administrative Services must issue a report on the feasibility of designing medical plans for employees of public institutions of higher education

March 29, 2007

April 30, 2007

 

School district debt limits

Background

All political subdivisions, including school districts, are subject to some debt limit that is based on a percentage of their property tax valuations.  The percentage and the types of debt that are included in those limits vary among types of subdivisions.  Generally, a school district may not incur debt in a net amount greater than 9% of its tax valuation.  In addition, a school district usually may not submit to its voters the question of incurring debt in an amount that would make the district's net indebtedness exceed 4% of its tax valuation, unless both the state Superintendent of Public Instruction and the Tax Commissioner consent.  However, continuing law permits school districts to issue debt exceeding both of these limits when undertaking state-assisted classroom facilities projects.

Tax valuation

(R.C. 133.01(PP))

For calculating the net indebtedness of all political subdivisions, "tax valuation" is defined by continuing law as the aggregate of the valuations of property in the jurisdiction that is subject to taxation according to its value.  The act, however, also specifies that "tax valuation" for a school district does not include the valuation of tangible personal property used in business, telephone or telegraph property, interexchange telecommunications company property, or personal property used by a railroad company in its operations.  The applicable taxes of all political subdivisions on these types of business property are being phased out over four years under continuing law.

Net indebtedness above the limits

(R.C. 133.06(I))

As noted above, a school district may incur net indebtedness in excess of the 9% limit, and may ask its voters to approve debt that will bring its indebtedness above 4% without state consent, when necessary to raise the school district's share of a state-assisted building project.  Generally, the programs administered by the Ohio School Facilities Commission provide state assistance on a cost-sharing basis, where district priority for assistance and the state and district shares are determined by the district's relative wealth.

The act specifies that a school district may issue debt above the limits not only for the district's portion of its state-approved project, but also for the cost of any "required locally funded initiatives" and the cost of site acquisition associated with the project, neither of which are paid for with state funds.  (The School Facilities Commission may require districts to pay the entire amount for certain items that do not meet the Commission's specifications but are closely associated with the state-assisted portion of the entire project.  The Commission also refers to these so-called "required locally funded initiatives" as "project agreement locally funded initiatives," since a stipulation regarding their scope and cost to be paid entirely by the district is included in the project agreement between the Commission and district.)

Unvoted debt for state-assisted classroom facilities projects

(R.C. 133.06(G), 3313.372, and 3318.052)

Generally, a school district's unvoted net indebtedness (that is, debt that may be incurred without approval of the district's voters) is limited to not more than 1/10 of 1% of the district's tax valuation.[14]  Nevertheless, continuing law also permits a district to incur unvoted debt of up to an additional 9/10 of 1% of its tax valuation for the installation of energy conservation measures approved by the School Facilities Commission.  The district is required to use the certified savings in energy costs to pay off that debt.[15]

Another provision of continuing law permits a school district to use the proceeds of an existing property tax or school district income tax that properly can be used for school construction to leverage securities to pay all or part of the district's share of a state-assisted construction project.[16]  This is an alternative to the usual method of financing a district's share of its project by requesting a voter-approved bond issue and tax levy.  Under that particular statute, there is no limit to the amount of unvoted debt that can be incurred for a school facilities project, and the unvoted debt does not count toward the overall 9% debt limit.  However, prior law on unvoted debt for energy conservation measures stated that total net unvoted indebtedness issued under that section and "all other sections of the Revised Code" could not exceed 1% of the district's tax valuation.[17]  Thus, under prior law, it appeared that a district's debt under the alternative school facilities finance method was limited to an amount of not more than the difference of the total amount of energy conservation and other unvoted debt incurred and 1% of the district's tax valuation.

The act specifies that unvoted debt issued to pay a district's share of its school facilities project under the alternative finance method does not count toward the 1% limit.[18]  The act does not change application of that limit to other unvoted debt.

Consent procedure

(R.C. 133.06(C))

If a school district proposed to issue debt that required the consent of the state Superintendent and the Tax Commissioner, under prior law, the district had to request their consent at least 30 days prior to the election at which the question was to be submitted.  The state Superintendent and the Tax Commissioner, could waive that deadline or grant their consent after the election was held, if the district could show good cause for the waiver or retroactive consent.

The act requires a district to submit its request for consent at least 105 days prior to the election and eliminates the waiver and retroactive consent provisions.  At the same time, the act requires the state Superintendent to notify a school district of both the Superintendent's and the Tax Commissioner's decision on consent within 30 days after receipt of the requests.  Thus, a district will know before the 75-day deadline for filing the ballot question whether or not the consents are granted.  If a district's voters reject the issuance of debt, the act permits the district to re-submit that question to the voters at the next election without again having to seek state consent.  But it also specifies that if the school district seeks to submit the same question at any other subsequent election, the district must first submit a new request for consent.

Educational Choice scholarships

Background

Beginning in the 2006-2007 school year, the Educational Choice Scholarship Pilot Program provides scholarships to pay tuition at chartered nonpublic schools for students assigned to public schools that have been declared to be in "academic emergency" for three consecutive school years.  It does not apply to the Cleveland Municipal School District, where a scholarship pilot program has been operating since 1995.  The act makes some changes regarding student eligibility and administration of the program.

Under prior and continuing law, a student is eligible for an Educational Choice scholarship, if the student meets one of the following conditions:

(1)  The student is enrolled in the student's resident district, in a building that has been declared to be in a state of academic emergency for three consecutive school years;

(2)  The student is eligible to enroll in kindergarten in the school year for which a scholarship is sought and would be assigned to an academic emergency school building described in (1) above; or

(3)  The student is enrolled in a community school (public charter school) but otherwise would be assigned to an academic emergency school building described in (1) above.

A student who receives a scholarship may continue to receive scholarships through grade 12, even after the school is no longer in academic emergency, so long as the student's resident district stays the same, the student takes the state achievement tests, and the student is not absent from school for more than 20 days per year (not including illness or injury confirmed by a physician).

The General Assembly has authorized 14,000 scholarships for the 2006-2007 school year.

Expansion to students of "academic watch" schools

(R.C. 3310.03(A)(1)(a) and 3310.06)

The act expands the conditions in (1) to (3), above, to include students whose district schools have been in a state of either academic emergency or academic watch for three consecutive years.  It retains the limit of 14,000 scholarships for 2006-2007.

Eligibility in open enrollment districts

(R.C. 3310.03(A)(1)(d))

Some districts, under open enrollment policies, do not automatically assign certain grade levels of students to any particular building.  Consequently, under prior law, it was not clear in those cases whether students entering kindergarten or attending community schools would be assigned to qualifying buildings.  For that reason, it was not clear whether they were eligible for a scholarship.

The act specifies that a student can qualify for a scholarship if the student is eligible to enroll in kindergarten in the school year for which a scholarship is sought, or is enrolled in a community school, and the student's resident district both (1) has been in academic emergency for three consecutive years[19] and (2) does not assign students in kindergarten or the community school student's grade level to any particular building.

Student data codes

(R.C. 3301.0714(D)(2), 3310.11, and 3310.12)

The act permits the Department of Education to request the data verification codes of students applying for scholarships from (1) those students' resident school districts, (2) a community school in which a student is enrolled, or (3) the independent contractor hired by the Department to create and maintain the codes (for background, see "Use of student data verification codes," below).  This authority, which is an exception to the general prohibition against the Department's having access to data verification codes when they could be matched with personally identifiable student data, is limited solely to administering the Educational Choice Scholarship Pilot Program.  School districts and community schools must provide a student's data verification code to the Department or the student's parent, upon request, in a manner specified by the Department.  If a student will be entering kindergarten and has not yet been assigned a data verification code, the resident school district must assign a code to the student prior to submission.  If the district does not assign the code by a date specified by the Department, the Department must assign the code.  Each year, the Department must provide school districts with the name and data verification code of each scholarship student living in the district who has been assigned a code by the Department.

The act also requires the Department to provide each scholarship student's data verification code to the chartered nonpublic school in which the student enrolls.  Under continuing law, when a scholarship student takes the statewide achievement tests, which is a requirement for maintaining eligibility for the scholarship program, the chartered nonpublic school must administer the tests in the same manner as public schools, including placing the student's data verification code on each test (see "Confidentiality of achievement test scores," below).[20]

Neither the Department nor a chartered nonpublic school may release a student's data verification code to any person, unless such release is otherwise authorized by law.  The act specifies that, except for materials that contain both a student's name or other personally identifiable data and the student's data verification code, documents relative to the scholarship program that are held by the Department are public records and may be released only in accordance with state and federal privacy laws.[21]

Credit to resident district when student re-enrolls in community school

(R.C. 3310.08)

To finance Educational Choice scholarships, continuing law includes scholarship students in school districts' base-cost calculations.  This will credit the districts with state base-cost funding.  The law then requires the Department of Education to deduct $5,200 from a district's state funding account for each of the district's students awarded a scholarship.  This deduction is to fund scholarships under both the Educational Choice and the Cleveland pilot programs.

Continuing law requires restoration of a portion previously deducted from a district's account for a student who withdraws from the chartered nonpublic school (attended under the scholarship) and re-enrolls in the student's resident district during the course of a school year.  The act clarifies that the Department also must restore to a scholarship student's resident district a proportion of the amount previously deducted for a student who withdraws from the chartered nonpublic school and enrolls in a community school.  That restored amount, under continuing law, will be again deducted and paid to the community school for the balance of the school year.[22]

Chartered nonpublic school rule compliance

(R.C. 3310.16)

The State Board of Education adopts rules in accordance with Chapter 119. of the Revised Code to administer the Educational Choice Scholarship Pilot Program.  Continuing law states that the State Board and Department of Education cannot require chartered nonpublic schools participating in the program to comply with any rules or requirements that are not specified in the statutes pertaining to the program if they otherwise would not apply to chartered nonpublic schools.  The act, on the other hand, also stipulates that chartered nonpublic schools must comply with the rules adopted by the State Board to administer the program.

Twice-annual reporting of formula ADM

(R.C. 3317.01, 3317.02, and 3317.03)

Background

"Formula ADM" (average daily membership) is the figure that represents for school funding purposes each school district's full-time-equivalent enrollment.  Prior to fiscal year 2006, the law required each district to certify its formula ADM once annually, for the first full week of October.  However, Am. Sub. H.B. 66 of the 126th General Assembly (the operating budget for the 2005-2007 biennium) required each school district, beginning in fiscal year 2006, to certify its formula ADM twice each fiscal year.  The first count was to be the traditional October count and the second count was to be for the third full week of February.  The October certification was to be used to calculate a district's state payments for the first half of the school year (July through December) and the average of the February and October certifications was to be used to calculate payments for the second half of the school year (January through June).

Delay in implementation; change to first week in February

The act delays implementation of the second annual formula ADM certification for one year, until fiscal year 2007.  It also moves the second formula ADM count to the first full week in February, rather than the third full week as under prior law.  Therefore, in fiscal year 2006, payments to school districts will continue to be calculated based solely on the October count.  A corresponding provision that allows for adjustments in payments to districts that experience enrollment growth also will continue through fiscal year 2006.  Under that provision, if a district's formula ADM for the first full week of February is at least 3% more than the formula ADM certified for October, the higher formula ADM must be used to calculate the remaining payments to the district.

Annualized payments

The act specifies that, when twice-annual reporting of formula ADM begins in fiscal year 2007, operating payments to school districts for the entire fiscal year will continue to be based on one annualized formula ADM figure.  Instead of using the October count for payments in July through December and the average of the October and February counts for payments in January through June, the act requires the use of a single annualized formula ADM number that may be adjusted throughout the entire fiscal year.  Under the act, a district's formula ADM for the fiscal year is the sum of half of the district's October count and half of the average of its October and February counts.

Penalty for reporting inaccurate attendance data

(Section 733.03)

Within nine months after the act's effective date, the Department of Education must develop a proposal for an appropriate penalty for school districts and community schools that intentionally report inaccurate data regarding formula ADM (see above) or community school ADM and other attendance figures.  The proposal also must include legislative recommendations regarding existing penalties for reporting inaccurate data.  Copies of the proposal must be submitted to the House and Senate Education Committees, the President and Minority Leader of the Senate, and the Speaker and Minority Leader of the House.  The Department must provide public testimony on the proposal before the education committees.

Early graduation

(R.C. 3313.61)

Under prior law, a school district may require that a student attend high school for a specified number of terms prior to granting the student a diploma.  The act prohibits a school district from requiring a student to remain in school for any specific number of semesters or other terms if the student completes the required curriculum.  (Students still must complete the required Ohio Graduation Tests to receive their diplomas.)[23]

School district tuition law changes

Background

Every child is entitled to attend school free of tuition in at least one school district in the state.  Generally, any child may attend school free of charge in the school district in which the child's parent lives.  A child is entitled to attend school in the district in which the child resides if:

(1)  The child is in the legal custody of a government agency or some person other than the child's parent;

(2)  The child resides in an institution, group home, foster home, or other licensed residential child care facility;

(3)  The child requires special education services that are provided by that district; or

(4)  The child's parent is institutionalized.

In these cases, however, another school district or other entity usually must pay tuition on behalf of the child to the school district that is educating the child.[24]   The amount of tuition that must be paid is generally the per pupil amount of the taxes charged and payable in the district educating the child.[25]

Moreover, under both state and federal law, school districts must identify each enrolled disabled student and provide a "free appropriate public education" for that student.[26]  The special education and related services for each disabled child are described in an "individualized education program" (or "IEP") that the district develops for the child in consultation with the child's parent.  When a district that is obligated to provide services to a disabled student (the child's "school district of residence") cannot do so, it must arrange for those services to be provided by another district, school, or other entity.  In that case, the entity providing the services may charge the district of residence the statutory tuition amount and any actual costs of educating the child in excess of the calculated tuition amount.[27]

Tuition for a child placed by a juvenile court

(R.C. 2151.357 and 3313.64(C))

When a juvenile court removes a child from the parent's custody and places that child in the custody of some other person or a government agency, the court is required to determine which school district is responsible for paying the cost of educating that child while in the custody of that person or agency.  Under law retained in part by the act, the juvenile court must make this determination under R.C. 3313.64(C)(2), which generally designates the district in which the child's parent resided at the time the court makes that determination to pay tuition.  This may or may not be the district in which the child resided.

Change for special education students.  The act retains the requirement that the court's determination be made in accordance with R.C. 3313.64(C)(2) for nondisabled students.  But for disabled students, it specifies that tuition be paid in accordance with R.C. 3313.64(C)(1), which in turn refers to the state Special Education Law (R.C. Chapter 3323.).  This change essentially clarifies that the "district of residence" of the child's parent, which may not be the same as the district where the parent resided when the court made its determination, is responsible for tuition and excess costs for the child's special education and related services.

Changes to the order.  Under former law, the district named in the court's order remained responsible for paying the cost of educating the child for as long as the child was in the custody of the person or government agency also named in the order.  The act, however, provides a mechanism for the juvenile court, upon recommendation from the Department of Education, to change the responsible school district when the residency of the child's parent changes.  Under the act, if the Department receives, from the school district initially ordered to bear the cost of educating the child, satisfactory evidence that the place of residence of the child's parent has changed, the Department may notify the court of this change.  The court may then modify its order to name a different school district to bear that cost.

In its notice to the court, the Department must recommend a district to assume that cost, which must be the district in which the child's parent currently resides or, if the parent's residence is not known, the district in which the parent's last known residence is located.  If the Department cannot determine any Ohio district in which the parent currently resides or has resided, the school district designated in the initial court order must continue to bear the cost of educating the child.  The act specifies that the court may consider the content of the Department's notice as conclusive evidence as to which school district should bear the cost of educating the child.

Conditions for seeking payment for educating a disabled child

(R.C. 3323.13)

The act prescribes conditions that must be satisfied by the school district educating a disabled child in order for it to seek payment of tuition and excess costs from the district of residence.  Under the act, the district educating the child must do at least one of the following:

(1)  Invite the district of residence to send representatives to attend the meetings of the child's IEP team;

(2)  Receive from the district of residence a copy of the IEP or a "multi-factored evaluation"[28] developed for the child by the district of residence; or

(3)  Inform the district of residence in writing that the district is providing the education for the child.

Parent's responsibility in unilateral placement of a disabled child

(R.C. 3323.143)

The parent of a disabled child may elect to enroll the child in a program other than the one provided by the district of residence.  In that case, however, the parent is generally responsible for tuition and all other costs associated with educating the child.  The act clarifies that in the case of this "unilateral placement," the parent is responsible for payment of tuition as long as the district of residence has offered a free appropriate public education to the child.  The act specifically defines "unilateral placement" as withdrawing the child from a program or facility operated by or, under special arrangement for, the district of residence and, instead, enrolling the child in another program or facility.  The act further specifies that unilateral placement does not apply to placing the child in a licensed residential care facility or in the program of another school district under that district's open enrollment policy.

Federal school food programs

School districts

(R.C. 3313.813)

Under prior law, school districts had to participate in the federal school breakfast and lunch programs in each school where at least one-third of the students were eligible under federal guidelines for free breakfasts and lunches, respectively.  The act makes two changes.  First, it lowers the threshold to one-fifth of the students.  Second, it requires districts to offer a federal food service program during summer intervention programs that school districts are required by law to provide.  This second new requirement applies to all district schools, regardless of how many students are federally eligible for free or reduced-price meals, and appears to apply to (1) summer remediation provided to students who scored lower than "proficient" on the third grade reading achievement test and (2) summer intervention services provided to students who took practice versions of the Ohio Graduation Tests in ninth grade.[29]  The requirement for federal summer food programs also applies to any future summer intervention programs mandated by law.

However, if a school district cannot, for financial reasons, comply with the new requirements, the district can choose not to comply with either or both if it communicates that fact publicly, in a manner its board of education determines appropriate, to residents of the district.  If a district does not comply, it nevertheless must continue to offer federal breakfast and lunch programs in schools where at least one-third of the students are federally eligible for free meals.

Community schools

(R.C. 3314.18)

Formerly, community schools could, but were not required to, participate in the federal school breakfast or lunch program.  The act creates two requirements for all community schools, except Internet- or computer-based community schools ("e-schools").  First, it requires community schools to participate in the federal breakfast and lunch programs where at least one-fifth of the students are eligible under federal guidelines for free breakfasts and lunches, respectively.  Second, it requires community schools to offer a federal food service program during summer intervention services that community schools are required by law to provide.  This second requirement applies regardless of how many students are federally eligible for free or reduced-price meals.[30]  Community schools must apply for available state and federal funding and comply with the State Board of Education's standards for food programs.

However, the act allows community schools to choose not to comply with the new requirements if the community school (1) determines that it cannot, for financial reasons, implement the services and (2) communicates this fact, in the manner its governing board determines appropriate, to parents of students enrolled in the school.

Changes to community school law

Background

Community schools (often called "charter schools") are public schools that operate independently from any school district under a contract with a sponsoring entity.  Community schools are funded with state funds that are deducted from the state aid accounts of the school districts in which the enrolled students are entitled to attend school.  Community schools generally may not charge tuition.

A conversion community school, created by converting an existing school district school, may be located in and sponsored by any school district in the state.  On the other hand, a "start-up" community school may be located only in a "challenged school district."  A challenged school district is any of the following:  (1) a "Big-Eight" school district, (2) a school district in academic watch or academic emergency, or (3) a school district in the original community school pilot project area (Lucas County).[31]

The sponsor of a start-up community school, which generally must be approved by the Department of Education, may be any of the following:

(1)  The school district in which the school is located;

(2)  A school district located in the same county as the district in which the school is located has a major portion of its territory;

(3)  A joint vocational school district serving the same county as the district in which the school is located has a major portion of its territory;

(4)  An educational service center;

(5)  The board of trustees of a state university (or the board's designee) under certain specified conditions; or

(6)  A federally tax-exempt entity under certain specified conditions.[32]

Qualifications of sponsors

(R.C. 3314.02(C)(1)(f))

Continuing law requires the Department of Education to adopt rules containing criteria for the approval of community school sponsors.[33]  These rules must require an entity seeking approval for sponsorship to provide evidence of its ability and willingness to provide proper oversight.  In addition, an entity seeking approval for sponsorship on or after June 30, 2005, must have a record of financial responsibility and successful implementation of educational programs.  The act clarifies that the latter requirement applies to all entities seeking approval to sponsor community schools on or after June 30, 2005, including private federally tax-exempt entities.

Prohibition on community school sponsoring another community school

(R.C. 3314.02(C)(1)(f))

The act specifies that a federally tax-exempt entity that sponsors community schools cannot be a community school itself.  That is, a community school cannot sponsor another community school.

Background.  Continuing law requires all community schools to be established as nonprofit corporations or public benefit corporations under state law.[34]  Therefore, due to its corporate organization under state law, a community school has federal tax-exempt status or it may be eligible to apply for that status.  Previously, it would have been possible for a federally tax-exempt community school that meets the sponsorship qualifications applicable to federally tax-exempt entities to seek approval to sponsor other community schools.

Deadline for signing contract

(R.C. 3314.02(D))

Continuing law requires the contract between a new community school and its sponsor to be adopted by a majority vote of the governing board of each party by March 15 prior to the school year in which the school will open.  The act further requires the contract to be signed by both parties by May 15, and requires the school's governing authority to notify the Department of Education when the contract has been signed.

Exclusion of certain students from community school enrollment count

(R.C. 3314.08(P) and 3317.03(E))

Background.  Each community school receives a payment from the state for each student enrolled in the school.  In most cases, these payments are deducted from the state aid accounts of the school districts in which the community school's students are entitled to attend school and paid to the community school by the Department of Education.  To ensure that school districts are credited for those students prior to the deduction, each district must include in its average daily membership (ADM) students who are entitled to attend school in the district but are instead enrolled in a community school.

Under continuing law, a school district's ADM does not include any student who (1) has graduated from a public high school, (2) is not an Ohio resident, (3) was enrolled in the district during the previous school year when the achievement tests were administered but did not take one or more of the required tests and did not have a statutory exemption from the tests, or (4) is 22 years of age or older and is not a veteran who left high school prior to graduation to serve in the armed forces and enrolled in the district within four years after the end of war or an honorable discharge.[35]  A student described in (3) may be included in a district's ADM if the Superintendent of Public Instruction grants the student a waiver from the requirement to take the missed achievement test.  A waiver may be granted only for good cause in accordance with State Board of Education rules.[36]

The act.  The act excludes these same categories of students from a community school's enrollment count.  It also requires students who have graduated from a nonpublic high school to be excluded from both a community school's enrollment count and a school district's ADM.  Therefore, under the act, a community school cannot receive state payments for students in any of these categories.  Consequently, a school district will not have funds deducted from its state aid account for those students.  Excluding the students from a community school's enrollment count avoids a scenario in which funding is deducted from a school district's state aid account and paid to a community school for students for whom the district was never eligible to receive state funding in the first place, resulting in a net loss of state funds to the district.

Finally, the act specifies that the Superintendent of Public Instruction may grant waivers from the achievement tests to community school students, thereby allowing the students to be included in a school's enrollment count, only for good cause in accordance with State Board of Education rules.  This is the same statutory standard for granting waivers for students enrolled in school districts.

Withdrawal of e-school students for failure to take achievement tests

(R.C. 3313.6410, 3314.08(P), 3314.26, and 3317.03(E))

Background.  Under continuing law, whenever a student enrolled in an Internet- or computer-based community school ("e-school") fails to participate in the spring administration of a grade-level achievement test for two consecutive school years, the school must withdraw that student from enrollment.  School district-operated schools in which students work primarily on assignments in a nonclassroom-based setting using an Internet- or other computer-based instructional method likewise are subject to this requirement.  An e-school or similar type of district-operated school may not receive state funding for any student who has been withdrawn from such a school for not taking the achievement tests.  A student who is subject to withdrawal may continue to enroll in an e-school or similar district-operated school, but the student's parent must pay tuition in an amount equal to the state funds the Department determines the school would otherwise receive for that student.  A school is not required to withdraw any special education or limited English proficient student who did not take an achievement test because the student had a statutory exemption from that test.

The act.  The act clarifies that a student for whom tuition is owed for failure to take all required achievement tests is not included in an e-school's enrollment count or a school district's ADM for state funding purposes.  Furthermore, the act states that if the Superintendent of Public Instruction grants a student enrolled in an e‑school or similar district-operated school a waiver from the requirement to take an achievement test, the waiver does not exempt the student from withdrawal from the school or exempt the school from losing state funding for that student (see discussion of waivers in "Exclusion of certain students from community school enrollment count" above).  In other words, an e-school student who does not take required achievement tests for two consecutive years must be withdrawn or pay tuition, regardless of whether the student receives a waiver from those tests.  As under former law, a school is not required to withdraw any student for failure to take a test from which the student is statutorily exempt.

Delay of additional assessments and sanctions

(R.C. 3314.35 and 3314.36)

Continuing law requires certain community schools to administer fall and spring reading and math assessments to students (in addition to the state achievement tests) to measure their academic progress during the school year, and establishes sanctions in some cases for schools in which student progress is not sufficient.  Previously scheduled to begin in the 2006-2007 school year, the act delays the additional assessments and sanctions until the 2007-2008 school year.

Background.  Under continuing law, a community school must administer reading and math assessments to students in grades 1 to 12 each fall and spring if the school either:

(1)  Has a performance rating of continuous improvement, academic watch, or academic emergency;

(2)  Has not been in operation for at least two years; or

(3)  Does not have a performance rating based on achievement test data because it either does not offer a grade level for which an achievement test is given or the Department of Education has determined that the number of students enrolled in grades that take achievement tests is too small to yield statistically reliable data about those students' test performance.

Continuing law also requires the State Board of Education to adopt rules establishing "reasonable" standards for expected gains in student achievement from the fall to the spring assessment periods and for expected gains in the graduation rate.  Community schools that have been open at least two school years and are in academic watch or academic emergency, or that do not have a performance rating based on achievement test data, face sanctions if (1) the school offers a high school diploma but is not showing the expected gains in its graduation rate established by the State Board or (2) the percentage of the school's population showing the State Board's expected gains on the reading or math assessments is less than 55%.  For the first two years, sanctions apply only to e‑schools.  After the third year of failure to make expected gains, both traditional ("brick and mortar") community schools and e-schools must close permanently.

Conflicts of interest

(R.C. 3314.03(A)(11)(e))

Community schools generally must comply with Ohio's Ethics Law, which, among other things, requires public officials to disclose conflicts of interest and prohibits them from having an interest in a contract awarded by their public office.[37]  Formerly, however, there were two exceptions to the Ethics Law for community schools.  First, a member of a community school governing authority could be an employee of the school.  Second, a governing authority member could have an interest in contracts entered into by the governing authority, except for contracts with for-profit firms for management of the school's operations.  The act eliminates these two exceptions, but it retains the general requirement for community schools to comply with the Ethics Law.  Therefore, it appears that, under the act, members of a community school's governing authority could not be employed by the school or, except in specified circumstances, have an interest in any contract awarded by the governing authority.[38]

School district transitional aid

(Sections 206.09.39 and 206.09.42 of Am. Sub. H.B. 66 of the 126th General Assembly)

The budget bill for the 2005-2007 biennium provides for a "transitional aid" payment in FY 2006 and FY 2007 to school districts that otherwise would receive less state funding than they did for the previous year.  Accordingly, the Department of Education must pay a district additional state funds, as necessary, to eliminate any decrease in either fiscal year.  The act clarifies that, in calculating transitional aid payments, the prior year's funding must be determined based on the final reconciliation of data by the Department of Education.

Tax information to calculate "gap aid" phase-out payments

(R.C. 3317.021(A)(8) and 3317.0216)

Because of relatively low tax valuations, certain school districts are not able to achieve 23 effective mills to cover their assumed local share ("charge-off") of the base-cost funding calculated for the district.  In other cases, districts' effective tax rates do not cover their assumed shares of special education, vocational education, and transportation funding.  To help these districts, the state provides a subsidy, called the charge-off supplement (or "gap aid"), to make up the difference between the districts' tax rates and their assumed shares.  However, a district that receives this subsidy faces losing it if the voters approve new property or income taxes.  Recently, the law was changed to permit a district that passes a new property tax or new school district income tax dedicated to current expenses, effective in 2005 and thereafter, to receive a graduated phase-out of gap aid payments over three years, rather than lose the subsidy in the first year the tax is counted in the funding formula.  Rather than losing its entire gap aid subsidy, the district receives over three years 75%, 50%, and 25%, respectively, of its last full gap aid payment.[39]

To enable the Department of Education to calculate these phase-out payments, the act requires the Tax Commissioner to certify to the Department by June 1 of each year for each school district currently receiving gap aid both (1) the portion of property taxes charged and payable for current expenses that is attributable to each new levy approved and charged in the preceding tax year, and (2) the portion of school district income taxes collected for current expenses that is attributable to each new school district income tax first effective in the current or preceding tax year.  To accommodate the Tax Commissioner's report, the act also requires the Department to provide a list by March 1 of school districts receiving gap aid payments.

Poverty-based assistance payments for all-day kindergarten

(R.C. 3317.029)

To clarify continuing policy, the act specifies that any school district receiving a state payment for all-day kindergarten also may allocate other poverty-based assistance subsidies it receives, including academic intervention payments, to providing all-day kindergarten.

Background

Payments to school districts for all-day kindergarten represent one component of "poverty-based assistance."  Most school districts are eligible to receive some amount for poverty-based assistance.  The subsidy consists of seven separately calculated payments for all-day kindergarten, academic intervention, class-size reduction, services to limited English proficient students, professional development, dropout prevention, and community outreach.  Each district also is guaranteed to receive as much total poverty-based assistance as it received in Disadvantaged Pupil Impact Aid in fiscal year 2005.  Eligibility for and the amount of the separate payments generally are based on a district's "poverty index," which is the ratio of the district's percentage, compared to the statewide percentage, of students living in low-income families.  Many of the payments must be used only for paying for certain services.

The all-day kindergarten payment may be made to (1) a district with a poverty index of 1.0 or greater or (2) a district with an index less than 1.0 if the district has a three-year average formula ADM of at least 17,500 students or if it had received an all-day kindergarten payment for the previous fiscal year.  Any district that receives the payment, however, must use it to provide all-day service to the number of kindergarten students it certified as requesting that service (the district's "all-day kindergarten percentage").  In addition, continuing law requires a district to spend all of its poverty-based assistance payments (along with other district funds if necessary) first to provide all-day service to the students included in its all-day kindergarten percentage.

Post-Secondary Enrollment Options Program

(R.C. 3365.02 and repealed and re-enacted R.C. 3365.11)

The Post-Secondary Enrollment Options Program (PSEO) allows high school students to enroll in nonsectarian college courses for both high school and college credit.  Students in public high schools (school districts and community schools) and nonpublic high schools (chartered and nonchartered) are eligible for the program.  Under Option A, the student is responsible for payments of all tuition but, under Option B, the state makes a payment to the institution of higher education on the student's behalf.  State payments for public high school students are deducted from the state aid accounts of the students' resident school districts or their community schools.  State payments for nonpublic high school students are paid out of a state set-aside, since nonpublic schools do not receive operations funding from the state.

Former law required the state Superintendent of Public Instruction to seek reimbursement from the student or student's parent of any state funds paid for a college course that the student failed.  The act repeals this requirement and replaces it with a requirement that the superintendent of the student's resident school district or the chief administrator of the student's community school or nonpublic school seek that reimbursement.  In the case of a school district or community school, the reimbursed funds would be deposited to a fund controlled by the district or community school.  In the case of a nonpublic school, on the other hand, the reimbursed funds must be sent to the Superintendent of Public Instruction, who in turn must credit that amount to the state's General Revenue Fund.  The act also specifically authorizes a school district board or community school governing authority to withhold high school grades and credits until the student or student's parent provides the reimbursement.

Autism Scholarship Program

(Section 206.09.84 of Am. Sub. H.B. 66 of the 126th General Assembly)

The act stipulates that "pervasive developmental disorder--not otherwise specified" (also known as "PDD-NOS") is considered autism for purposes of eligibility for a scholarship under the Autism Scholarship Program.  According to the Yale Developmental Disabilities Clinic, "Pervasive Developmental Disorder, Not Otherwise Specified (PDD-NOS)" is a 'subthreshold' condition in which some--but not all--features of autism or another explicitly identified Pervasive Developmental Disorder are identified.  A child with PDD-NOS may have a "marked impairment of social interaction, communication, and/or stereotyped behavior patterns or interest, but . . . full features for autism or another explicitly defined PDD are not met."[40]

Background

The budget bill for the 2005-2007 biennium reauthorized this pilot program for FY 2006 and FY 2007.  It pays scholarships of up to $20,000 to the parents of autistic children for services at public and nonpublic special education programs in lieu of enrolling them in the programs of their resident school districts.  The amount of each scholarship is deducted from the state aid account of the child's resident school district.

Use of student data verification codes

Background

When a student initially enrolls in a school district or community school, the district or school must assign a unique data verification code to that student.  The data verification code, commonly known as the Statewide Student Identifier (SSID), allows districts and community schools to confidentially report student-level data to the Department of Education through the Education Management Information System (EMIS).  Generally, the Department is not permitted to have access to information that would enable a data verification code to be matched with personally identifiable student data.[41]

Confidentiality of achievement test scores

(Section 612.36.03 of Am. Sub. H.B. 66 of the 126th General Assembly; Section 827.03)

The act accelerates, to March 30, 2006, instead of July 1, 2006, the following provisions enacted in Am. Sub. H.B. 66 of the 126th General Assembly (the 2005-2007 biennial operating budget) to protect the confidentiality of student scores on the statewide achievement tests:

(1)  Authorizing the State Board of Education to require the use of data verification codes to protect student confidentiality;

(2)  Requiring that each achievement test include the data verification code of the student to whom it is administered;

(3) Specifying that the prohibition against the Department of Education releasing achievement test scores to any entity other than the students' school districts also applies to any company with which the Department contracts for the scoring of the tests.[42]

Applying for tuition reimbursement for special education students

(R.C. 3323.091)

Continuing law requires the Department of Mental Health, Department of Mental Retardation and Developmental Disabilities, Department of Youth Services, and Department of Rehabilitation and Correction to establish special education programs for disabled students served by institutions under their control.  The superintendents of those institutions may apply to the Department of Education for special education and related services weighted funding (for school-age children) or unit funding (for preschool children).  In addition, each institution is entitled to tuition deducted from the state aid account of each student's resident school district.  To claim the tuition under current law, an institution's superintendent must annually submit to the Department of Education a statement that includes the disabled student's name and resident school district.

The act requires superintendents to use each special education student's data verification code, rather than the student's name, to identify the student for the purpose of receiving tuition reimbursements.

Reporting of disabled preschool children to General Assembly

(R.C. 3323.20)

Beginning July 1, 2006, the Department of Education must make annual electronic reports to the General Assembly on the number of disabled preschool children for whom the Department paid a provider for services during the previous fiscal year.  Former law required this number to be disaggregated by the six categories of disabilities for which special education weighted funding is calculated.[43]  However, under current State Board of Education rules, disabled preschool children are identified as disabled based on documented deficits in one or more areas of development, such as cognitive ability or motor skills, instead of using the categories applicable to K through 12 students.  Therefore, the act requires the Department to report the number of disabled preschool children disaggregated according to these developmental deficiencies.

Timelines for completing value-added analyses

(R.C. 3302.021)

Continuing law requires the Department of Education, by July 1, 2007, to incorporate a "value-added progress dimension" into the annual performance ratings issued for school district and buildings.  Commonly referred to as the value-added effect, this measure uses achievement test data to assess the academic gains made by individual students over the course of a school year.  In implementing the value-added progress dimension, the Department must use a system previously used by a nonprofit organization led by the Ohio business community and may presumably contract with the organization for that purpose.[44]  The act specifies that any value-added data analysis conducted by an entity under contract with the Department must be completed in accordance with timelines established by the Superintendent of Public Instruction.

Governing boards of merged ESCs

(R.C. 3311.057)

Continuing law generally requires the governing board of an educational service center (ESC) to consist of five members who reside in the ESC's territory and are elected at large from that area.[45]  However, if two or more ESCs merged after July 1, 1995, but before July 1, 2003, the merging ESCs had the option of determining the number of members on the new ESC's governing board (as long as the total membership was an odd number) and whether the members would be elected at large, by subdistrict, or some combination of both methods.

The act eliminates the July 1, 2003, cut-off date for the creation of these custom-designed governing boards.  In other words, two or more existing ESCs that merge after the effective date of this change (June 30, 2006) may opt to design the governing board of the newly formed ESC.  As under former law, to take advantage of the option, the boards of the merging ESCs must adopt identical resolutions describing how the new ESC board will be formed.  The number of board members and their method of election cannot be changed at any time after the adoption of the resolutions.  The act does not appear to permit an ESC that was formed by merger prior to June 30, 2006 to change the composition or method of election of its board.

Removal of obsolete references to education subsidies

(R.C. 3317.024; conforming changes in R.C. 3313.29, 3314.08, 3315.01, 3317.02, 3317.022, 3317.051, 3317.053, 3317.06, 3317.07, 3317.082, 3317.11, 3317.19, and 3319.17; Section 3 of Sub. H.B. 11 of the 126th General Assembly and Sections 206.09.21, 206.09.27, 206.09.36, 206.09.39, and 206.09.42 of Am. Sub. H.B. 66 of the 126th General Assembly)

The act strikes from law references to the following subsidies for school districts, for which the General Assembly has not appropriated funds in several years:

(1)  A per pupil subsidy for summer school remediation program (remediation subsidies have been financed differently over the past several years);

(2)  Supplemental teacher salary allowances for summer school, not appropriated since fiscal year 2000;

(3)  Driver's education courses, not appropriated since fiscal year 1999; and

(4)  MR/DD supportive home services for preschool children.

Removal of LOEO references

(R.C. 3317.029(L)(2); Section 206.09.66 of Am. Sub. H.B. 66 of the 126th General Assembly)

Am. Sub. H.B. 66 of the 126th General Assembly, the 2005-2007 biennial budget bill, eliminated the Legislative Office of Education Oversight (LOEO), effective December 31, 2005.  This act removes references to LOEO from two statutes governing the Department of Education:

(1)  A codified provision requiring the Department to consult with LOEO before determining whether school districts are complying with the requirements of the state poverty-based assistance subsidy; and

(2)  An uncodified provision of H.B. 66 requiring the Department to send to LOEO a copy of any report it issues to the Office of Budget and Management and the Legislative Service Commission concerning changes in distribution of state and federal funds to school districts.

 

·        Removes statutory provision that excludes public employees who must be licensed to practice law in this state to perform their duties from the definition of "public employee" under the Public Employees' Collective Bargaining Law ("PECB").

·        Specifies that all categories of employees who are exempt from the definition of "public employee" under the PECB cannot be members of the Ohio Elections Commission.

 

 

Attorneys governed by the Public Employees' Collective Bargaining Law

(R.C. 4117.01)

Under the Public Employees' Collective Bargaining Law (hereafter "PECB," R.C. Chapter 4117.), a public employee has the right to collectively bargain with the public employee's public employer.  Continuing law defines "public employee" for the purpose of the PECB generally as any person who works for a public employer, whether by employment or appointment.  The definition also lists specific exceptions, making those employees not "public employees" for purposes of the PECB.  Statutory law formerly stated that employees who had to be licensed to practice law in this state to perform their duties as employees were exempt from the PECB's definition of "public employee."  This exemption was held to violate the one-subject rule of the Ohio Constitution, Article II, Section 15(D) in State ex rel. Ohio AFL-CIO, et al. v. Taft (July 13, 2005), Franklin C.P. 04CVH02-1455, unreported.  The act repeals this exemption from the law.

Change in membership restrictions of the Ohio Elections Commission

(R.C. 3517.152)

Continuing law places restrictions on members of the Ohio Elections Commission.  For example, a Commission member is not permitted to run for or hold a public office or work on a committee for a candidate or an issue.  In addition, in what may be a technical update to R.C. 3517.152, under the act a Commission member cannot be a person or employee who is excluded from the definition of a "public employee" under the PECB.  Under former law, a Commission member could not be a person or employee who was included in the first 15 out of the existing 18 categories of exempt employees.  Thus, under the act, employees in all categories of these exempted employees (i.e. all employees listed in division (C) of R.C. 4117.01, not just those listed in R.C. 4117.01(C)(1) through (15)) cannot be members of the Commission.  Therefore, under the act, the added categories of employees (those listed in divisions (C)(16) and (C)(17) of R.C. 4117.01) who cannot be members of the Commission are:  (1) employees in the "career professional service" under the Department of Transportation, and (2) participants in programs under the Ohio Works First Program, under specified conditions.  The attorneys described above were listed in division (C)(18) of R.C. 4117.01, so the act's revision concerning which categories of public employees cannot be Commission members has no affect relative to those types of attorneys.  Technically, they could have been members of the Commission under former law, and the act also allows them to be Commission members.

 

·        Clarifies that a solid waste transfer facility is required to collect fees on solid wastes taken to the facility prior to being transported for disposal at a solid waste disposal facility located in Ohio or outside of Ohio.

·        Clarifies that a political subdivision must pay solid waste disposal fees to the owner or operator of a solid waste transfer or disposal facility and that the requirement that a customer or a political subdivision pay the fees is notwithstanding any applicable contract with the owner or operator of the facility or with the transporter of waste to the facility.

·        Specifies that application fees and review fees for the issuance of section 401 water quality certifications by the Environmental Protection Agency do not apply to the United States Army Corps of Engineers.

·        Extends, from June 30, 2006, to one year after the act's effective date, the exemption granted to coal mining and reclamation operations from the payment of section 401 water quality certification fees.

 

 

Collection of solid waste disposal fees

(R.C. 3734.57)

Continuing law establishes fees on the disposal of solid wastes and requires the fees to be collected by a transfer facility if solid wastes are taken to a solid waste transfer facility located in this state prior to being transported to a solid waste disposal facility for disposal.  The act clarifies that the disposal fees are levied on the transfer or disposal of solid wastes and that they must be collected by a solid waste transfer facility if solid wastes are taken to a transfer facility located in this state prior to being transported for disposal at a solid waste disposal facility located in Ohio or outside of Ohio.  Thus, the act clarifies that even if solid wastes are transferred from a transfer facility to a solid waste disposal facility located outside of Ohio, the fees must be collected by the transfer facility.

Responsibility to pay solid waste disposal fees

(R.C. 3734.57)

Continuing law states that solid waste disposal fees must be paid by the customer to the owner or operator of a solid waste transfer or disposal facility notwithstanding the existence of any provision in a contract that the customer may have with the owner or operator that would not require or allow such payment.  The act clarifies that solid waste disposal fees must be paid by a customer or a political subdivision to the owner or operator of a solid waste transfer or disposal facility notwithstanding the existence of any provision in a contract that the customer or political subdivision may have with the owner or operator or with a transporter of waste to the facility that would not require or allow such payment.

Section 401 water quality certification fees

(R.C. 3745.114)

Continuing law establishes application fees and review fees for section 401 water quality certifications.  Such certifications are required to be obtained from the Environmental Protection Agency whenever a person intends to conduct dredging or filling operations in any of the waters of the state.  The application fee for a certification is $200, and the review fee is determined by the scope of the project that is the subject of the application and the classification of the body of water to be impacted (e.g., stream, lake, or wetland).  The act specifies that the fees do not apply to projects conducted by the United States Army Corps of Engineers.

Additionally, under continuing law, coal mining and reclamation operations are exempt from section 401 water quality certification fees.  However, under prior law, that exemption was scheduled to end on June 30, 2006.  The act extends this period of exemption until one year after the act's effective date.

 

·        Permits the Department of Health to reimburse free clinics at a lower percentage (than the former 80%) of the amount the clinic spent on medical liability insurance premiums.

·        Allows Choose Life license plate contributions to be distributed by the Director of Health to certain eligible organizations located in a county contiguous to the county where the funds otherwise would be allocated if no eligible organization within the county applies for funding.

·        Requires physicians who perform abortions to complete and submit to the Department of Health an individual abortion report for each abortion performed.

·        Requires hospitals to submit monthly and annual reports regarding the number of certain types of abortions performed.

·        Requires the Department of Health to issue an annual report on abortions performed in Ohio.

·        Requires the State Medical Board to inform physicians of the act's reporting requirement.

·        Authorizes the Medical Board to take disciplinary actions against physicians who fail to comply with the reporting requirement established by the act.

·        Would have required the rules governing sewage treatment systems that the Public Health Council must adopt to be adopted not sooner than July 1, 2007, rather than not later than May 6, 2006, as in continuing law (VETOED).

·        Authorizes the Director of Health to make grants for women's health services programs.

·        Requires the Department, for fiscal year 2007 only, to pay a pharmacy provider for a copayment assessed by a Bureau for Children with Medical Handicaps (BCMH) participant's Medicare Part D plan on a drug that is approved by the Department, a "covered Part D drug" under federal law, and on the formulary of the participant's plan.

 

 

Reimbursement to free clinics for medical liability insurance premiums

(R.C. 2305.2341)

Former law required the Department of Health, under the Professional Liability Insurance Reimbursement Program, to reimburse free clinics for 80% of the premiums the clinic paid for medical liability insurance.  The act requires the Department to reimburse free clinics for up to 80% of those medical liability insurance premiums.  Continuing law defines "free clinic" to mean a nonprofit organization or component of a nonprofit organization that is exempt from federal income taxation and whose primary mission is to provide health care services for free or for a minimal administrative fee to individuals with limited resources.

Choose Life Fund distribution

(R.C. 3701.65)

Under continuing law, the Director of Health at least annually must distribute the money in the Choose Life Fund to any eligible private, nonprofit organization that applies for funding.  The distribution generally is required to be based on the county in which the organization is located and in proportion to the number of "Choose Life" license plates issued during the preceding year for vehicles registered in that county.  The act allows the Director to distribute Choose Life funds to eligible organizations located in a contiguous county if no eligible organization located within a county applies for the funding allocated to that county.  An eligible organization may apply for funding in a contiguous county if it provides services for pregnant women residing in that contiguous county.

Abortion reporting requirements

(R.C. 3701.79)

The act establishes several reporting requirements for abortions performed in the state.  Physicians performing abortions must prepare reports for each abortion performed and postabortion complication reports if necessary; hospitals must file monthly and annual reports regarding certain types of abortions performed; and the Department of Health must issue an annual report of abortion data reported to the Department and make available the number of abortions performed by ZIP code of residence.

Physician reporting requirements

(R.C. 3701.79(C) to (F) and (H))

Under the act, for each abortion performed, the attending physician is required to complete an individual abortion report.  The report is confidential and must not contain the name of the woman who received the abortion.  The report must include the information including the name and address of the facility in which the abortion was performed, the date of the abortion and certain information regarding the woman on whom the abortion was performed, such as age, race, marital status, and number of children.

The physician who completed the abortion report must submit the report to the Department of Health not later than 15 days after the woman is discharged.  The report must be made part of the woman's medical record at the facility.

The act also requires that the attending physician complete the appropriate vital records report or certificate following an abortion performed after the 20th week of gestation.

The act requires a physician to report on a form prescribed by the Department each time the physician treats a postabortion complication.  The report must be signed by the physician and must be treated as confidential.

Hospital reporting requirements

(R.C. 3701.79(G))

Under the act, each hospital must file monthly and annual reports[46] listing the total number of women who have undergone an abortion past the 12th week of pregnancy and received postabortion care.[47]

Department of Health reporting requirements

(R.C. 3701.79(B) and (I))

Under the act, the Department of Health must collect and collate the abortion data reported by physicians and hospitals.  The act requires the Department, not later than October 1 of each year, to issue a report of the abortion data reported to the Department for the previous calendar year.  The report must include the following, at a minimum:

(1)  The total number of induced abortions;

(2)  The number of abortions performed on Ohio and out-of-state residents;

(3)  The number of abortions performed, sorted by each of the following:

(a)  The age of the woman on whom the abortion was performed;[48]

(b)  The race and Hispanic ethnicity of the woman on whom the abortion was performed;

(c)  The education level of the woman on whom the abortion was performed;[49]

(d)  The marital status of the woman on whom the abortion was performed;

(e)  The number of living children of the woman on whom the abortion was performed;[50]

 

(f)  The number of weeks of gestation of the woman at the time the abortion was performed;[51]

(g)  The county in which the abortion was performed;

(h)  The type of abortion procedure performed;

(i)  The number of abortions previously performed on the woman on whom the abortion was performed;

(j)  The type of facility in which the abortion was performed;

(k)  For Ohio residents, the county of residence of the woman on whom the abortion was performed.

(4)  The number and type of the abortion complications reported to the Department either on the abortion report or the postabortion complication report.

The Department must make the report available on request. The Department must also make available, on request, the number of abortions performed by ZIP code of residence.

Rulemaking

(R.C. 3701.341)

Under law modified by the act, the Department is authorized to adopt rules relating to abortions, including rules regarding abortion reporting forms.  The act repeals the Department's authority to adopt rules regarding reporting forms.

Medical Board to notify physicians of reporting requirement

(R.C. 4731.281)

Under law retained by the act, the Medical Board is required to mail to each person who holds a certificate of registration issued by the Board an application for registration renewal in accordance with a schedule established in statute.  The act requires each mailing to inform an applicant for registration renewal of the reporting requirement established by the act (see "Physician reporting requirements" above).  The information may be included on the application or on an accompanying page, at the discretion of the Board.

Enforcement

(R.C. 3701.79(J) and 4731.22)

The act authorizes the Department of Health to apply to the court of common pleas for a temporary or permanent injunction restraining a violation or threatened violation of the act's reporting requirements.  Also, the act authorizes the Medical Board to take disciplinary action against any physician who violates the reporting requirements (see "Physician reporting requirements" above).

Sewage treatment system rules

(R.C. 3718.02; Section 737.03)

Continuing law requires the Public Health Council to adopt rules governing sewage treatment systems not later than May 6, 2006.  The Governor vetoed a provision that would have required those rules to be adopted not sooner than July 1, 2007, rather than not later than May 6, 2006.

Women's Health Services grants

(R.C. 3701.046)

The act codifies a provision of the most recent general operations budget bill, Am. Sub. H.B. 66, that authorizes the Director of Health to make grants for women's health services programs with certain restrictions.  For example, grant money may not be used to provide abortion services and grants may be made only to programs that are physically and financially separate from abortion-providing and abortion-promoting activities.  The act provides that women's health services include and are limited to the following:  pelvic examinations and laboratory testing; breast examinations and patient education on breast cancer; screening for cervical cancer; screening and treatment for sexually transmitted diseases and HIV screening; voluntary choice of contraception, including abstinence and natural family planning; patient education and pre-pregnancy counseling on the dangers of smoking, alcohol, and drug use during pregnancy; education on sexual coercion and violence in relationships; and prenatal care or referral for prenatal care.  The act provides that the health care services are to be provided in a clinical medical setting and requires the Director to issue a single request for proposals for all women's health services grants.

Bureau for children with medical handicaps--Medicare Part D copayments

(Section 606.18.09)

Background--BCMH

The Program for Medically Handicapped Children and the Program for Adults with Cystic Fibrosis are state-administered programs operated by the Department of Health.  The Programs are collectively known as the "Bureau for Children with Medical Handicaps" (BCMH).  They provide medical assistance for qualifying handicapped children and for certain adults with cystic fibrosis.  BCMH receives funding for the services it provides from the federal Maternal and Child Health Block Grant, the state's general revenue fund, county tax funds, third party reimbursements, and donations.[52]

Background--Medicare Part D

Medicare Part D is a prescription drug benefit for every Medicare beneficiary regardless of income, health status, or prescription drug usage.[53]  The benefit is not part of the traditional Medicare program; rather, it is offered through private insurance plans.[54]

The Medicare Prescription Drug, Improvement, and Modernization Act of 2003,[55] which enacted the Medicare Part D drug benefit established a standard benefit that Part D plans can offer.  The standard benefit is defined in terms of the benefit structure and not in terms of the drugs that must be covered.  In 2006, this standard benefit requires a beneficiary to pay a $250 deductible.  The beneficiary then pays 25% of the cost of the covered Part D prescription drug up to an initial coverage limit of $2,250.  Once the initial coverage limit is reached, the beneficiary is subject to another deductible commonly referred to as the "doughnut hole" in which the beneficiary must pay the full cost of the medicine.  When total out-of-pocket expenses on formulary drugs for the year, including the deductible and initial co-insurance, reach $3,600, the beneficiary pays a copayment of $2 for generic or preferred drugs and $5 for other drugs, or 5% coinsurance, whichever is greater.[56]

Medicare Part D plans are not required to offer the standard benefit.  Alternative coverage, however, must be "actuarially equivalent" to the standard benefit.  In an actuarially equivalent plan, the cost sharing varies through the use of mechanisms such as tiered copayments.  For example, a beneficiary's share of the cost may be less for a generic or preferred brand name drug than for a non-preferred brand name drug.[57]

In addition, Medicare Part D plans are not required to pay for all covered Part D drugs.  They may establish their own formularies as long as the formularies and benefit structure are not found by the Centers for Medicare & Medicaid Services (CMS) to discourage enrollment by Medicare beneficiaries.  Plans can change the drugs on their formularies during the course of year if they give 60 days notice to affected parties.[58]

While enrollment in a Medicare Part D plan is optional for the majority of Medicare beneficiaries, enrollment in a Part D plan is mandatory for low-income Medicare beneficiaries who are dually eligible for Medicaid ("dual eligibles") because as of January 1, 2006, dual eligibles must receive most prescription drugs through Medicare Part D rather than Medicaid.[59]  According to CMS, dual eligibles could choose a Medicare Part D plan beginning in the Fall of 2005.  If a dual eligible did not choose a plan by January 1, 2006, Medicare automatically enrolled the dual eligible in a plan.[60]  Unlike other Medicare beneficiaries who have the ability to change Part D plans only once a year, dual eligibles can change plans once a month if they find that a plan does not meet their needs.[61]

Because all dual eligibles qualify for Medicare Part D subsidies that are available for low-income Medicare beneficiaries, they do not have to pay premiums or deductibles for their prescription drug coverage.[62]  Most dual eligibles, like other Medicare Part D beneficiaries are still, nonetheless, responsible for copayments charged by their Part D plans.[63]

Payment for Medicare Part D copayments--fiscal year 2007 only

Some of the adults with cystic fibrosis who participate in BCMH are Medicare Part D beneficiaries.  They are typically eligible for Medicare because they have qualified for Social Security Disability Income (SSDI) for at least 24 months or they have worked long enough in a federal, state, or local government job and meet the requirements of the SSDI Program.[64]  They may also be dual eligibles if they also qualify for Medicaid.  Because they are Medicare Part D beneficiaries, they are responsible for paying copayments assessed by their Part D plans.

The act requires the Department of Health, for fiscal year 2007 only, to pay a pharmacy provider for a copayment charged by a BCMH participant's Medicare Part D plan.  The act defines "pharmacy provider" as a pharmacist licensed by the State Pharmacy Board to engage in the practice of pharmacy or a pharmacy that has entered into a BCMH provider agreement with the Department of Health.[65]  "Copayment" is defined as a dollar amount charged for, or a percentage of the total price of, an approved drug[66] prescribed for a BCMH participant that meets all of the following criteria:  (1) is assessed by the participant's plan either at the time the prescription for the drug is presented or the drug is dispensed, (2) is not otherwise covered by the participant's plan or any other third party benefits, including any benefits provided by a government entity, and (3) is not a premium or deductible.

The act permits the Public Health Council to adopt rules as necessary to implement these requirements.  The act specifies that the rules may be initially adopted as emergency rules.

 

·        Authorizes the clerks of the Senate and House of Representatives to print the daily journals or "publish" them in an electronic format.

·        Eliminates the requirement that legislative journals be printed in pamphlet form daily during each session of the General Assembly.

Printing or publishing of daily legislative journals

(R.C. 101.543)

Background law

Under continuing law, the clerks of the Senate and House of Representatives are custodians of the documents in their possession and are responsible for the printing of a document when its printing becomes necessary in the course of the proceedings or operations of the clerk's respective house (R.C. 101.52--not in the act).  The daily and final journals are among the legislative documents for which the clerks have that responsibility (R.C. 101.51(B)--not in the act).

Article II, Section 9 of the Ohio Constitution requires each house to "keep a correct journal of its proceedings, which shall be published."  By statute, the clerks have specified discretion in choosing the "method of printing" of the journals or other documents, whether "to paper or to electronic memory," provided that they must not select a method unless it reasonably appears under the circumstances that it will enable them to successfully and efficiently discharge the responsibility for printing the document or class of documents (R.C. 101.51(C) and 101.52--not in the act).

Continuing statutory law requires each clerk to keep a daily journal of the proceedings of their respective house, which must be read and corrected in the clerk's presence.  After the reading, correction, and approval of the daily journal, it must be attested by the clerk and recorded.  The recorded daily journals must be deposited with the Ohio Historical Society and are the "true journals."  The original daily journals, as kept, corrected, approved, and attested, must be used by the clerk to print the journals.  (R.C. 101.54--not in the act.)

Former law, modified by the act (see below), required the daily journals to be printed daily during each session of the General Assembly in pamphlet form without covers.  And, under former law, the composition used in printing the daily journals had to be retained for use in printing the final journals; "composition" includes, for example, paper, typeface, binding, and other matters relating to the makeup of a document.  (R.C. 101.51(A)--not in the act; R.C. 101.543.)

Finally, under continuing law, after adjournment sine die, the final journals and their appendices must be printed and bound in one or more volumes (R.C. 101.543).

Changes made by the act

The act confers upon the clerks the option of either printing or "publishing" the daily journals of their respective house.  For purposes of the act, "publish" means to produce an electronic record that is accessible to the public.  The act corresponding eliminates the requirements for the journals' daily printing in pamphlet form and for the Senate Journal to precede the House of Representatives Journal in the pamphlet.  The act does not appear to require the original daily journal, as kept, corrected, approved, and attested under R.C. 101.54 (not in the act) to be used to publish the daily journals in electronic format, although this requirement seems to be retained for printed daily journals.  Finally, the composition (see definition above) of published daily journals must be retained for use in printing the final journals.  (R.C. 101.543.)

 

·        Prohibits health care providers and third-party payers, including Medicaid-participating health insuring corporations, from entering into contractual arrangements under which time periods shorter than those provided for in federal Medicaid regulations are applicable to payment claims for health care services.

·        Eliminates the requirement that any person or entity soliciting insurance business obtain a certificate of compliance from the Superintendent of Insurance before advertising.

·        Specifies how insurance company tax overpayments are to be refunded, how long the state has to assess for unpaid insurance company taxes, how interest on underpaid or overpaid insurance company taxes is to be computed, and the order in which insurance company tax credits are to be claimed.

 

 

Prompt payment of claims for health care services

(R.C. 3908.383)

In general, continuing law requires third-party payers to pay or deny a claim for payment for services rendered by a health care provider not later than 30 days after receipt of the claim.[67]  If supporting documentation is needed to process the claim, the claim must be paid or denied within 45 days.  A third-party payer and provider may enter into a contractual agreement in which payment is to be made within shorter time periods.

The act prohibits a provider and third-party payer, including a third-party payer that provides coverage under the Medicaid program, from entering into a contractual agreement under which time periods longer than those provided for in federal Medicaid regulations are applicable to the third-party payer in paying a claim for any amount due for health care services rendered by the provider.  The prohibition applies regardless of whether the third-party payer is exempt from Ohio's prompt pay laws because the third-party payer is providing coverage under the Medicaid program (see DEPARTMENT OF JOB AND FAMILY SERVICES:  "Prompt payment by Medicaid-participating health insuring corporations").

Certificate of compliance

(R.C. 3905.43)

The act eliminates the requirement that, before a person, firm, association, partnership, company, or corporation may publish or distribute or receive and print for publication or distribution any advertisement soliciting insurance business, that person or entity must obtain a certificate of compliance from the Superintendent of Insurance.

Insurance company tax--continuing law

Continuing law imposes annual taxes on insurance companies writing policies covering risks in Ohio.  Generally, the taxes are charged on the basis of companies' adjusted gross premiums for policies covering risks in Ohio.  Taxes apply to "domestic" insurance companies (those formed or organized under Ohio law) and to "foreign" insurance companies (those formed under the laws of some other jurisdiction).  The tax rate is 1.4% of adjusted gross premiums (excluding premiums of health insuring corporations); on health insuring corporations, the rate is 1% of adjusted gross premiums.  The minimum annual tax is $250.  All revenue from the taxes is credited to the General Revenue Fund.

A tax also is levied at the rate of 0.75% of adjusted gross premiums on fire insurance policies written by domestic and foreign insurance companies.  Revenue from the tax is credited to the State Fire Marshal's Fund.  (R.C. 3737.71.)

Refunds

(R.C. 5725.222(A), 5729.05, and 5729.102(A); Sections 757.15 and 757.18)

The act prescribes specific procedures for refunding overpaid insurance company taxes (including the fire insurance tax).  The refund provisions are modeled on similar refund provisions governing other major state taxes such as the corporation franchise tax.  Refunds are available for tax that an insurance company overpaid, paid illegally or erroneously, or paid under an assessment that was illegal, erroneous, or excessive.  To obtain a refund, an insurance company must file an application with the Superintendent of Insurance on a form prescribed for that purpose by the Superintendent.  The application must be filed within three years after the tax was paid, but this period may be extended by mutual agreement.

Prior law required refunds of overpaid insurance company taxes, but did not provide procedures for a company to claim a refund and did not impose a time limit within which companies must initiate a refund claim.

The act's refund provisions take effect immediately.  They apply to refunds of taxes paid before, on, or after the immediate effective date.  But if a refund application were to fall due under the act's three-year filing deadline before 30 days after the immediate effective date, the application may be filed within 30 days after the immediate effective date.

Assessments for deficiencies

(R.C. 5725.222(B) and 5729.102(B); Sections 757.15 and 757.18)

The act prescribes procedures and a time limit for issuing assessments for allegedly unpaid or underpaid insurance company taxes (including the fire insurance tax).  Generally, an assessment is a formal notice to a taxpayer of an alleged tax deficiency; its issuance marks the beginning of the time within which certain procedural rights or actions must be exercised.  The act expressly authorizes the Superintendent of Insurance to issue an assessment for unpaid or underpaid taxes "based on any information in the Superintendent's possession."  The assessment must be issued within three years after the final deadline for filing the tax report or return or for paying the tax, or when the report or return was actually filed, whichever is later.  However, the three-year time limit does not apply if the insurance company failed to file a report or return or if the tax deficiency results from fraud or a felonious act.  The insurance company and the Superintendent may extend the three-year time limit by mutual written agreement.

Under prior law, insurance companies could have been billed for tax deficiencies, which, if left unpaid, were required to be certified to the Attorney General for collection.  But, there was no formal assessment procedure such as that prescribed by the act and no corresponding time limit on initiating formal tax deficiency notice and collection procedures.

The act's assessment provisions take effect immediately.  They apply to taxes due or paid before, on, or after the immediate effective date.  But if the act's three-year limit on issuing an assessment were to expire before 30 days after the act's immediate effective date, the deadline for issuing the assessment is extended to the 30th day after the immediate effective date.

Interest

(R.C. 5725.221 and 5729.101)

The act prescribes how interest is to be computed on underpaid foreign insurance company taxes (including the tax on gross premiums of fire insurance policies) and on refunds of those taxes when they are overpaid.  The act's interest provisions are similar to those applicable to domestic insurance company taxes under ongoing law.  When a tax return is not filed on time, interest accrues on the unpaid tax on a monthly basis beginning with the first month that begins after the tax due date through the month that ends before the date the tax is paid.  When an amended or final assessment is certified, and a deficiency of tax is found to be due, interest accrues on the deficiency from the first day of the month following the date the previous assessment was payable through the month that ends before the date the amended or final assessment is certified.  When an amended or final assessment is certified, and an overpayment is found to be refundable to the company, interest accrues on the refund from the first day of the month following the date the previous assessment was certified through the month that ends before the date the amended or final assessment is certified.

In all cases, interest accrues on a monthly basis at 1/12 the statutory interest rate charged for most kinds of late tax payments--i.e., at 3% above the average yield on outstanding marketable United States Government securities having a remaining maturity of three years or less.  The interest rate for every month in 2006 is 0.5% per month based on the per annum rate of 6%.

The act also expressly provides for interest charges on late payments of the tax on adjusted gross premiums of fire insurance policies written by domestic insurance companies.  Prior law did not specify that interest accrues on late payments of the tax on fire insurance premiums.

Under prior law, no interest was specifically provided for delinquent foreign insurance company taxes until they were certified for collection to the Attorney General.  And no interest was specifically provided for refunded tax overpayments.

The act's interest provisions take effect immediately.

Credit ordering

(R.C. 5725.98 and 5729.28)

The act prescribes a specific order in which the six credits available against the several insurance company taxes must be claimed.  The order is intended to ensure the maximum amount of total credit for companies claiming more than one of the credits by making the credits with the more generous carry-forward or refund potential deducted after the less generous credits are deducted.  The order is as follows, from first to last:

(1)  The nonrefundable credit for "small" insurance companies or commonly owned insurance company groups having less than $75 million in nationwide premiums.

(2)  The nonrefundable credit for employee training costs.

(3)  The nonrefundable credit for losses on venture capital loans.

(4)  The tax offset for assessments against member insurers for the Ohio Life and Health Insurance Guaranty Association.

(5)  The refundable job creation tax credit.

(6)  The refundable credit for losses on venture capital loans.

The credit ordering provision takes effect immediately.

 

·        Updates state law governing Medicaid ineligibility for disposition of assets for less than fair market value in accordance with changes to federal law made by the Deficit Reduction Act of 2005.

·        Updates state law governing the maximum amount that an individual's home may be worth for the individual to qualify for Medicaid in accordance with federal law enacted as part of the Deficit Reduction Act of 2005.

·        Provides that the determination of whether real property is to be considered an aged, blind, or disabled individual's homestead or principal place of residence is for the purpose of determining whether the individual is eligible for nursing facility services, intermediate care facility for the mentally retarded services, or other Medicaid-funded long-term care services rather than for Medicaid in general.

·        Creates the Medicaid Revenue and Collections Fund into which the non-federal share of Medicaid-related revenues, collections, and recoveries that are not credited to another fund are to be credited.

·        Renames the Hospital Care Assurance Match Fund (to which federal matching funds that are received under the Hospital Care Assurance Program are credited) the Health Care – Federal Fund and requires that the federal share of Medicaid-related revenues, collections, and recoveries (including drug rebates) that are not credited to another fund also be credited to the fund.

·        Expressly requires that the non-federal share of all supplemental rebates paid by drug manufacturers under the Supplemental Drug Rebate Program be credited to the Prescription Drug Rebates Fund.

·        Allows a hospital to take action to collect Medicaid copayments by providing, at the time services are rendered, notice that a copayment may be owed, and exempts the hospital from the prohibition against waiving Medicaid copayments if the hospital provides the notice and chooses not to take further action for collection.

·        Eliminates the restriction that limits the Department of Job and Family Services to recovering a Medicaid overpayment to the five-year period immediately following the end of the state fiscal year in which the overpayment is made, but provides that the Department may make such a recovery only if it notifies the provider of the overpayment during that five-year period.

·        Requires persons and government entities that receive or make annual Medicaid payments of at least $5 million to provide their employees, contractors, and agents with information about federal and state laws on prevention and detection of fraud, waste, and abuse.

·        Requires a Medicaid-participating health care provider that renders emergency services to a Medicaid managed care participant on or after January 1, 2007, without being under contract with the participant's Medicaid managed care organization, to accept, as payment in full, not more than the amounts (less any payments for medical education costs) that could have been collected if the Medicaid recipient were not enrolled in a managed care organization.

·        Clarifies that federal requirements for making prompt Medicaid payments are not applicable to Medicaid-participating health insuring corporations if Ohio's prompt payment requirements are implemented instead.

·        Requires the Director of Job and Family Services to establish a qualified state long-term care insurance partnership program not later than September 1, 2007.

·        Requires the Director of Job and Family Services to adopt rules providing for a reduction of an adjustment or recovery under the Medicaid estate recovery program for estates of participants in the long-term care insurance program.

·        Provides that a nursing facility's costs for habilitation supervisors, qualified mental health professionals, and program directors are to be part of the facility's ancillary and support costs rather than direct care costs.

·        Provides that a nursing facility is to be excluded when the Department of Job and Family Services identifies which nursing facility in a peer group is at the 25th percentile of the nursing facilities' cost per case-mix unit if the nursing facility's cost per case-mix unit is more than one standard deviation from the mean cost per case-mix unit for all nursing facilities in the peer group.

·        Eliminates the requirement that the Department of Job and Family Services place nursing facilities in quality tier groups for the purpose of paying the facilities a quality incentive payment.

·        Requires that the mean quality incentive payment for fiscal year 2007 be $3 per Medicaid day and that the Department adjust the mean payment for subsequent fiscal years by the same adjustment factors the Department uses to adjust other parts of nursing facilities' reimbursement rate.

·        Limits the awarding of quality points for resident or family satisfaction to fiscal years immediately following calendar years for which a survey of resident or family satisfaction has been conducted.

·        Removes franchise permit fees and quality incentive payments from the components of a nursing facility's Medicaid reimbursement rate that are to be adjusted as directed by the General Assembly through the enactment of law governing Medicaid payments to nursing facilities.

·        Eliminates the requirement that the Department of Job and Family Services adjust a nursing facility's Medicaid reimbursement rate to account for reasonable additional costs the nursing facility must incur to comply with (1) requirements of federal or state statutes, rules, or policies or (2) orders issued by state or local fire authorities.

·        Corrects a provision of the fiscal year 2006 Medicaid reimbursement formula for new nursing facility beds by replacing a reference to fiscal year 2007 with a reference to fiscal year 2006.

·        Requires that the Department of Job and Family Services, as part of the process of determining a nursing facility's reimbursement rate for fiscal year 2007, calculate the rate under the new reimbursement formula, increase the amount so calculated by 2%, and then increase that amount by another 2%.

·        Requires that the Director of Job and Family Services make payments to qualifying nursing facilities and intermediate care facilities for the mentally retarded (ICFs/MR) for quarterly periods starting no sooner than January 1, 2006.

·        Provides that facilities that qualify for the payments are (1) certain nursing facilities and ICFs/MR that are new as of fiscal year 2006 or 2007, (2) certain nursing facilities and ICFs/MR that complete capital projects, (3) certain nursing facilities that complete an activity for which a certificate of need is not needed, and (4) certain nursing facilities and ICFs/MR that complete a renovation.

·        Creates formulas to be used to determine the amount of the payments.

·        Terminates all nursing facilities and ICFs/MR's eligibility for the payments at the earlier of July 1, 2007, or the date the total amount of the payments equals $10 million.

·        Permits an intermediate care facility for the mentally retarded (ICF/MR) to convert in whole or in part, rather than just in whole, to providing home and community-based services under the ICF/MR Conversion Pilot Program.

·        Requires that an ICF/MR that converts in part to place the beds that convert in a distinct part of the facility that houses the ICF/MR.

·        Exempts an ICF/MR's beds that convert from a requirement that they be included in the ICF/MR's Medicaid provider agreement with the other parts of the facility that meet standards for certification of compliance with federal and state law and rules for participation in the Medicaid program.

·        Permits the operator of an ICF/MR to remove a bed converted to providing home and community-based services under the ICF/MR Conversion Pilot Program (and a bed that is designated for respite care under a Medicaid waiver program administered by the Department of Mental Retardation and Developmental Disabilities) from a Medicaid provider agreement without having to withdraw the rest of the ICF/MR from the Medicaid program.

·        Requires that an ICF/MR that participates in the ICF/MR Conversion Pilot Program to be licensed as a residential facility or certified to provide supported living, consistent with the law governing the licensure of residential facilities.

·        Reduces the licensed capacity of an ICF/MR by each resident who enrolls in the ICF/MR Conversion Pilot Program.

·        Reduces the certified capacity of an ICF/MR by each bed that converts to providing home and community-based services under the ICF/MR Conversion Pilot Program.

·        Requires the Director of Job and Family Services to amend an ICF/MR's Medicaid provider agreement to reflect the ICF/MR's reduced certified capacity or, if the ICF/MR's certified capacity is reduced to zero, terminate the ICF/MR's Medicaid provider agreement.

·        Prohibits an ICF/MR from reconverting beds back to providing ICF/MR services after the ICF/MR Conversion Pilot Program terminates if the facility does not meet licensure requirements.

·        Requires that the Director of Job and Family Services adjust an ICF/MR's franchise permit fee if the ICF/MR's certified capacity is reduced under the ICF/MR Conversion Pilot Program.

·        Permits the Director of Job and Family Services to adjust an ICF/MR's franchise permit fee if the facility's certified capacity is increased after the ICF/MR Conversion Pilot Program terminates.

·        Requires that the Director of Mental Retardation and Developmental Disabilities increase the cap on the number of licensed residential facility beds if necessary to enable the operator of a residential facility to be licensed as required by the ICF/MR Conversion Pilot Program or to reconvert to providing ICF/MR services after the program terminates.

·        Adds to the Medicaid Care Management Working Group one additional member to represent providers of Medicaid services not required by federal law (optional services).

 

 

Disposition of assets for less than fair market value

(R.C. 5111.011, 5111.0116, and 5111.151)

Background

Federal law generally requires that states temporarily deny an institutionalized individual eligibility for certain Medicaid-covered services if the individual or individual's spouse disposes of assets for less than fair market value on or after a date called the look-back date.  The following are considered to be institutionalized individuals:  (1) nursing facility residents, (2) inpatients of medical institutions with respect to which payment is based on a level of care provided in a nursing facility, and (3) individuals who would be eligible for Medicaid under the state's Medicaid plan if they were in a medical institution, would require, if not for home and community-based services, the level of care provided in a hospital, nursing facility, or intermediate care facility for the mentally retarded the cost of which is reimbursable under the state's Medicaid plan, and will receive home and community-based services pursuant to a federal Medicaid waiver.  The services for which eligibility is denied are nursing facility services, equivalent services provided by other institutions, and home and community-based services furnished under a federal Medicaid waiver.

Prior to the enactment of the Deficit Reduction Act of 2005, federal Medicaid law provided that the look-back date was the date that was 60 or 36 months, depending on the type of assets at issue, before the first date as of which an individual was both an institutionalized individual and a Medicaid applicant.  In other words, to avoid ineligibility for the specified services based on a disposition of assets for less than fair market value, the disposition had to occur 60 or 36 months before the date the individual was both an institutionalized individual and a Medicaid applicant.  The look-back date was 60 months for assets consisting of payments from a trust and 36 months for all other assets.  The Deficit Reduction Act provides that the number of months used in determining the look-back date is 60 months for all assets, not just assets consisting of payments from a trust.  The change is applied prospectively only, meaning that dispositions that occurred before the Deficit Reduction Act continue to be governed by the previous law.

Also prior to the Deficit Reduction Act, the temporary ineligibility due to a disposition of assets for less than fair market value began on the first day of the first month during or after which the assets were transferred and that did not occur in another period of ineligibility due to the look-back penalty.  The Deficit Reduction Act amended this too.  The temporary ineligibility for a disposition of assets that occurs on or after the enactment of the Deficit Reduction Act begins on the later of the following that does not occur during another period of ineligibility due to the look-back penalty:  the first day of the month during or after which the disposition of assets occurs or the date on which the institutionalized individual is eligible for Medicaid and would be receiving the specified services if not the look-back penalty.

The Deficit Reduction Act did not change the amount of time ineligibility for the specified services continues.  The number of months of ineligibility is determined by dividing the total, cumulative uncompensated value of all assets disposed of on or after the look-back date by the average monthly cost to a private patient of nursing facility services in the state (or, at the state's option, in the community in which the individual is institutionalized) at the time of application.

Certain dispositions of assets do not cause a look-back penalty.  For example, title to a home may be transferred to the following:  a spouse; a child who is under age 21, blind, or disabled; a sibling who has an equity interest in the home and who resided in the home for at least one year immediately before the date the individual becomes an institutionalized individual; and a son or daughter who resided in the home for at least two years immediately before the date the individual becomes an institutionalized individual if the son or daughter enabled the individual to remain at home by caring for the individual.  Also, no penalty is to be applied if the state determines that denial of eligibility would cause an undue hardship.  The Deficit Reduction Act requires that states provide for a hardship waiver process under which an undue hardship exists when application of the penalty would deprive an individual of (1) medical care without which the individual's health or life would be endangered or (2) food, clothing, shelter, or other necessities of life.

The act

The act repeals current state law governing the look-back period, including state law governing the look-back period as it applies to assets that are part of a trust.  In its place, the act enacts a new law that provides that an institutionalized individual is ineligible for Medicaid-funded nursing facility services, nursing facility equivalent services, and home and community-based services if the individual or individual's spouse disposes of assets[68] for less than fair market value on or after the look-back date.  "Look-back date" is defined as the date that is a certain number of months immediately before either of the following:  the date an individual becomes an institutionalized individual if the individual is eligible for Medicaid on that date or the date an individual applies for Medicaid while being an institutionalized individual.  The Director of Job and Family Services is required to adopt rules specifying the number of months to be used for the purpose of the look-back penalty.  The Director is also to adopt rules establishing a process to be used to determine the date an institutionalized individual's ineligibility is to begin under the look-back penalty and the number of months the ineligibility is to continue.  Additionally, the Director is to adopt rules establishing exceptions to the look-back penalty.

The act retains a provision of current law that permits the Director, for the purpose of securing compliance with the look-back provision, to require an individual, as a condition of initial or continued eligibility for Medicaid, to provide documentation of the individual's assets up to five years before the date the individual becomes an institutionalized individual if the individual is eligible for Medicaid on that date or the date the individual applies for Medicaid while an institutionalized individual.  Documentation may include tax returns, records from financial institutions, and real property records.

Medicaid ineligibility due to substantial home equity

(R.C. 5111.011 and 5111.0118)

The Deficit Reduction Act of 2005 requires that states, beginning January 1, 2006, deny an individual's eligibility for Medicaid-covered nursing facility services and other long-term care services if the individual's equity interest in the individual's home exceeds $500,000 (or at a state's option, $750,000).  This amount is to be increased annually beginning in 2011 based on the percentage increase in the consumer price index for all urban consumers, rounded to the nearest $1,000.  However, an individual is not to be denied eligibility on this basis if either of the following lawfully reside in the home:  (1) a spouse or (2) a child who is under age 21, blind, or disabled.  The United States Secretary of Health and Human Services is required to establish a process for waiving ineligibility in cases of demonstrated hardship.  Also, an individual may use a reverse mortgage or home equity loan to reduce the individual's total equity interest in the home.

The act repeals law that disqualified an aged, blind, or disabled individual for Medicaid if the value of the individual's real property used as a homestead or principal place of residence exceeded the maximum allowed for the Supplemental Security Income program.  In its place, the act implements the new federal mandate from the Deficit Reduction Act.  The initial maximum equity interest is set at $500,000.  The Director of Job and Family Services is required to comply with the United States Secretary of Health and Human Services' process for waiving the ineligibility in cases of demonstrated hardship.

When real property ceases to be considered principal place of residence

(R.C. 5111.011 and 5111.0117)

State law permits the Department of Job and Family Services to consider real property to not be the homestead or principal place of residence of an aged, blind, or disabled applicant for or recipient of Medicaid if the applicant or recipient resides in a nursing facility, intermediate care facility for the mentally retarded (ICF/MR), or other medical institution for 13 months or longer.  This does not apply when any of the following reside in the real property:  a spouse; a son or daughter who is under age 21, blind, disabled, or financially dependent on the applicant or recipient for housing; or a sibling who has a verified equity and ownership interest in the real property and resided in the real property for at least one year immediately before the date the applicant or recipient was admitted to the nursing facility, ICF/MR, or other medical institution.

Under prior law, the consideration was made for the purpose of determining eligibility for the Medicaid program.  The act provides that the purpose of making the consideration is to determine whether the individual is eligible for nursing facility services, ICF/MR services, or other Medicaid-funded long-term care services rather than for Medicaid in general.  The Director is to adopt rules defining the term "other Medicaid-funded long-term care services."

Medicaid funds

(R.C. 5111.941, 5111.081, 5111.082, 5111.083, 5111.084, 5111.942, 5111.943, 5112.08, and 5112.18; Sections 606.17, 606.18, and 815.09)

The act creates the Medicaid Revenue and Collections Fund in the state treasury and requires, except as otherwise provided by statute or as authorized by the Controlling Board, that the non-federal share of all Medicaid-related revenues, collections, and recoveries be credited to the fund.  The Department of Job and Family Services is required to use money credited to the fund to pay for Medicaid services and contracts.

The act renames the Hospital Care Assurance Match Fund the Health Care – Federal Fund.  Under prior law, only federal matching funds received as a result of the Department distributing funds from the Hospital Care Assurance Program (HCAP) Fund (to which payments hospitals make to the Department under the Hospital Care Assurance Program are credited) to hospitals had to be credited to the Hospital Care Assurance Match Fund.[69]  The act provides for such payments to continue to be credited to the renamed fund and requires that all of the following also be credited to the fund:

(1)  The federal share of all rebates paid by drug manufacturers to the Department in accordance with federal Medicaid law governing drug rebates;

(2)  The federal share of all supplemental rebates paid by drug manufacturers to the Department in accordance with state Medicaid law governing supplemental drug rebates.

(3)  Except as otherwise provided by statute or as authorized by the Controlling Board, the federal share of all other Medicaid-related revenues, collections, and recoveries.

Under prior law, money in the Hospital Care Assurance Match Fund had to be used solely for distributing funds to hospitals under HCAP.  The act provides that the portion of the fund (as renamed the Health Care – Federal Fund) that consists of federal matching funds received as a result of the Department distributing funds from the HCAP Fund to hospitals is to continue to be used solely for distributing funds to hospitals under HCAP.  But, the Department is required to use all other money credited to the Health Care – Federal Fund to pay for other Medicaid services and contracts.

The Prescription Drug Rebates Fund is a fund in the state treasury that predates the act.  Prior law required that all rebates paid by drug manufacturers to the Department in accordance with federal Medicaid law governing drug rebates be credited to the fund.  Under the act, only the non-federal share of such rebates are to be credited to the fund.  The act requires that the non-federal share of all supplemental rebates paid by drug manufacturers to the Department in accordance with state Medicaid law governing supplemental drug rebates also be credited to the fund.  As discussed above, the federal share of the rebates and supplemental rebates are to be credited to the Health Care – Federal Fund.

Collection of Medicaid copayments by hospitals

(R.C. 5111.0112)

Continuing law requires the Medicaid program to the extent permitted by federal law, to include copayments for dental services, vision services, nonemergency emergency department services, and prescription drugs.  A Medicaid-participating health care provider is prohibited from waiving a Medicaid recipient's obligation to pay a copayment.

In the case of a provider that is a hospital, the act permits the hospital to take action to collect a copayment by providing, at the time services are rendered to a Medicaid recipient, notice that a copayment may be owed.  Under the act, the prohibition against waiving copayments does not apply if the hospital provides the notice and chooses not to take any further action to collect the copayment.

Recovery of Medicaid overpayments

(R.C. 5111.061)

The Department of Job and Family Services may recover a Medicaid payment or portion of a payment made to a provider to which the provider is not entitled.  Under prior law, the recovery could occur at any time during the five-year period immediately following the end of the state fiscal year in which the overpayment was made.  The act eliminates that restriction and instead provides that the Department may make the recovery only if it notifies the provider of the overpayment during that five-year period.

Fraud, waste, and abuse prevention and detection

(R.C. 5111.101)

The act requires that each individual, private entity, and government entity that receives or makes Medicaid payments in a calendar year that total $5 million or more to provide each of its employees, contractors, and agents detailed, written information about the role of all of the following in preventing and detecting fraud, waste, and abuse in federal heath care programs:[70]

(1)  Federal false claims law;

(2)  Federal administrative remedies for false claims and statements;

(3)  Ohio laws pertaining to state employees reporting violations of state or federal law or misuse of public resources, Medicaid fraud, Medicaid eligibility fraud, falsification, and other Ohio laws pertaining to civil or criminal penalties for false claims and statements;

(4)  Whistleblower protections under the federal and Ohio laws.

The individuals and entities must include with this information detailed information about their policies and procedures for preventing and detecting fraud, waste, and abuse.  They are also required to include in their employee handbooks the information about the laws, whistleblower protections, and their policies and procedures for preventing and detecting fraud, waste, and abuse.

The act provides that the individuals and entities must comply with these requirements as a condition of receiving the Medicaid payments.  The act does not condition an individual or entity's authority to make the payments on the individual or entity complying with the requirements.

Emergency services by non-contracting providers in Medicaid managed care

(R.C. 5111.162 and 5111.163)

Under continuing law, when a Medicaid recipient enrolled in a Medicaid managed care organization is referred by the organization to a Medicaid-participating hospital that is not under contract with the organization, the hospital must provide services to the Medicaid recipient and accept from the organization, as payment in full, the amount derived by using the fee-for-service reimbursement rate that otherwise applies under the Medicaid program.  Certain hospitals that contracted with Medicaid-participating health insuring corporations before January 1, 2006, are not subject to these requirements if they remain under contract.

In accordance with a provision of the federal Deficit Reduction Act of 2005, the act separates "emergency services" from the continuing law dealing with non-contracting hospitals and applies a similar reimbursement system to all providers of emergency services.  "Emergency services," as defined in federal law, are covered inpatient and outpatient services that are furnished by a qualified provider and are needed to evaluate or stabilize an emergency medical condition.

Specifically, the act provides that when a Medicaid recipient is enrolled in a managed care organization and receives emergency services on or after January 1, 2007, from a Medicaid-participating provider that is not under contract with the organization, the provider must accept from the organization, as payment in full, not more than the amounts that the provider could collect if the Medicaid recipient were not enrolled in a managed care organization.  The act provides for the payment to be reduced by any payments for indirect costs of medical education and direct costs of graduate medical education.

Prompt payment by Medicaid-participating health insuring corporations

(R.C. 3901.3814, 5101.93, and 5111.178)

Continuing law requires health insurers and other third-party payers to make prompt payments to health care providers.  In general, the state time limits for making prompt payments do not apply to the Medicaid program, which is governed by prompt payment requirements specified in federal regulations.  In the case of Medicaid-participating health insuring corporations, however, the state prompt payment requirements are to be applied if a federal waiver of federal requirements is granted or the Director of Job and Family Services determines that the state requirements can be implemented without a waiver.

The act clarifies that if the state prompt payment requirements can be implemented with respect to Medicaid-participating health insuring corporations, either with or without a waiver, the state prompt payment requirements apply, instead of the prompt payment requirements specified in federal regulations.[71]  The clarification must be included in the notice that the Department of Insurance is required to give to Medicaid-participating health insuring corporations when a determination is made that the state prompt payment requirements will apply instead of the federal requirements.

Qualified state long-term care insurance partnership program

(R.C. 5111.18, 5111.18 (new), and 5111.01)

H.B. 152 of the 120th General Assembly required ODJFS to establish the Ohio Long-Term Care Insurance program, unless the establishment of the program would violate federal law.  Under the program, if an individual acquired long-term care insurance, certain resources would not be counted when determining whether an individual was eligible for Medicaid.  Also, the resources would not be subject to recovery as part of the Medicaid estate recovery program.  The program was never implemented because of federal law that subjected a Medicaid recipient to estate recovery if the recipient received benefits under a long-term care insurance policy in connection with which resources were disregarded.  Only states that had federal approval for such disregards by May 14, 1993, could exempt such recipients from estate recovery.

Congress, as part of the Deficit Reduction Act of 2005, amended federal Medicaid law to authorize states to establish qualified long-term care insurance partnership programs, defined as an approved state Medicaid plan amendment that provides for the disregard of resources in an amount equal to the insurance benefit payments that are made to or on behalf of an individual who is a beneficiary under a long-term care insurance policy if certain requirements are met.  The requirements include that the policy must (1) be a qualified long-term care insurance policy as defined in the Internal Revenue Code, (2) have been issued no earlier than the effective date of the state Medicaid plan amendment, (3) meet model regulations and requirements of a model act promulgated by the National Association of Insurance Commissioners, and (4) provide compound annual inflation protection if it is sold to an individual under age 61 or some level of inflation protection if it is sold to an individual at least age 61 but under age 76.

The act requires the Director of Job and Family Services to establish a qualified long-term care insurance partnership program consistent with the federal definition of that term.  The program must be established not later than September 1, 2007.  The estate of an individual who participates in the program may be subject to a reduced adjustment or recovery under the Medicaid estate recovery program.  The Director is to adopt rules providing for the reduction and rules to implement the qualified long-term care insurance partnership program.  The rules are to be adopted in accordance with the Administrative Procedure Act (Revised Code Chapter 119.).

Nursing facilities' direct care and ancillary and support costs

(R.C. 5111.20 and 5111.231)

A nursing facility's costs are placed into different categories (also known as cost or price centers) for the purpose of calculating the facility's Medicaid reimbursement rate.  Each cost category has its own reimbursement formula.

One of the categories is called direct care costs.  Direct care costs include such costs as the costs of nurses, medical directors, and quality assurance.

Under prior law, direct care costs also included costs for qualified mental retardation professionals, program directors, and habilitation staff.  The act moves the costs for qualified mental retardation professionals, program directors, and habilitation supervisors to a different cost category:  ancillary and support costs.  Habilitation staff other than supervisors remain in the direct care cost category.

As part of the formula for the direct care cost category, the Department of Job and Family Services is required to determine, at least once every ten years, a cost per case-mix unit for each peer group of nursing facilities.[72]  In determining a peer group's cost per case-mix unit, the Department is required, among other things, to identify which nursing facility in the peer group is at the 25th percentile of the cost per case-mix units determined for each of the nursing facilities in the peer group.  Prior law required that the Department exclude, when identifying which nursing facility was at the 25th percentile, nursing facilities whose direct care costs were more than one standard deviation from the mean desk-reviewed, actual, allowable, per diem direct care cost for all nursing facilities in the nursing facility's peer group.  The act requires instead that the Department exclude the nursing facilities whose cost per case-mix unit is more than one standard deviation from the mean cost per case-mix unit for all nursing facilities in the nursing facility's peer group.

Nursing facilities' quality incentive payments

(R.C. 5111.244 and 5111.222)

The Department of Job and Family Services is required to pay nursing facilities an annual quality incentive payment beginning in fiscal year 2007.[73]  The amount of a payment a nursing facility is to receive is based on the number of points the nursing facility earns for certain accountability measures.  The payment is part of the nursing facility's total Medicaid reimbursement rate.

The act repeals a requirement that the Department annually establish four quality tier groups.  Each group was to consist of one quarter of all nursing facilities participating in the Medicaid program.  The first group had to consist of the quarter of nursing facilities individually awarded the most number of points for the accountability measures.  The second group had to consist of the quarter awarded the second most number of points.  The third and fourth groups had to consist of the two quarters awarded the third and least number of points respectively.  Nursing facilities placed in the fourth group were to receive no payment.

Prior law required that the mean quality incentive payment, weighted by Medicaid days,[74] be 2% of the average Medicaid reimbursement rate for all nursing facilities calculated under the statutory reimbursement system, excluding the part of the rate comprised of the quality incentive payment.  Nursing facilities placed in the fourth quality tier group were required to be included when determining the mean payment, even though they were not to be paid a quality incentive payment.  The act requires instead that the mean quality incentive payment for fiscal year 2007, weighted by Medicaid days, be $3 per Medicaid day and that the Department adjust the mean payment for subsequent fiscal years by the same adjustment factors the Department uses to adjust certain other components of nursing facilities' Medicaid reimbursement rate.[75]

Among the accountability measures for which a nursing facility may be awarded points are that a nursing facility's resident satisfaction is above the statewide average and that a nursing facility's family satisfaction is above the statewide average.  Under the act, points are to be awarded for meeting those accountability measures only for a fiscal year immediately following a calendar year for which a survey of resident or family satisfaction has been conducted under state law governing the Ohio Long-Term Care Consumer Guide.

Adjustment of nursing facilities' Medicaid rates

(R.C. 5111.222)

Generally, a nursing facility's Medicaid reimbursement rate is made up of different components.  Beginning fiscal year 2007, the components are direct care costs, ancillary and support costs, capital costs, tax costs, nursing home franchise permit fees, and a quality incentive payment.  Each component has its own calculation.

Prior law required that the Department of Job and Family Services adjust the payments otherwise determined for each of the components under their individual calculations.  The adjustments were to be made as directed by the General Assembly through the enactment of law governing Medicaid payments to providers of nursing facilities.  Under the act, only the following components of nursing facilities' Medicaid reimbursement rate are to be so adjusted:  direct care costs, ancillary and support costs, tax costs, and capital costs.  As discussed above under the heading "Nursing facilities' quality incentive payments," however, the mean quality incentive payment paid to nursing facilities is to be adjusted, beginning in fiscal year 2008, in the same manner.

Adjustments to nursing facilities' rate due to governmental requirements

(R.C. 5111.27)

The act eliminates a requirement that the Department of Job and Family Services adjust nursing facilities' Medicaid reimbursement rate to account for reasonable additional costs that must be incurred to comply with requirements of federal or state statutes, rules, or policies enacted or amended after January 1, 1992, or with orders issued by state or local fire authorities.[76]

Fiscal year 2006 Medicaid payments for new nursing facility beds

(Sections 606.17 and 606.18)

Under the fiscal year 2006 Medicaid reimbursement formula for nursing facility services, the rate for new beds added to a nursing facility is to be the same as the rate for beds that are in the nursing facility on the day before the new beds are added.  The act fixes an error in this law by replacing a reference to fiscal year 2007 with a reference to fiscal year 2006.

Fiscal year 2007 Medicaid reimbursement formula for nursing facilities

(Sections 606.17 and 606.18)

The budget bill for the 126th General Assembly, Am. Sub. H.B. 66, includes a new Medicaid reimbursement formula for nursing facility services.  The Department of Job and Family Services is to begin using the new formula in fiscal year 2007.  However, if a nursing facility's fiscal year 2007 rate determined under the new formula is more than 2% higher or lower than its fiscal year 2006 rate, the nursing facility's rate is to be adjusted so that its adjusted fiscal year 2007 rate is not more than 102% or less than 98% of its fiscal year 2006 rate.

The act provides that a nursing facility's rate for fiscal year 2007 is to be determined by calculating the rate under the new reimbursement formula, increasing that amount by 2%, and then increasing that amount by another 2%.  If that results with a rate that is 2% more or less than the nursing facility's fiscal year 2006 rate, the rate is to be increased or decreased so that the adjusted fiscal year 2007 rate is not more than 102% or less than 98% of its fiscal year 2006 rate.

Nursing facilities and ICFs/MR's uncompensated capital costs

(Sections 606.17, 606.18, 606.18.03, and 606.18.06)

A nursing facility's Medicaid reimbursement rate for fiscal year 2006 is frozen at its fiscal year 2005 rate.  The act eliminates the Department of Job and Family Services' authority to adjust a nursing facility's fiscal year 2006 rate to reflect a change in the nursing facility's capital costs due to (1) a change of provider agreement that went into effect before July 1, 2005, and for which a rate adjustment was not implemented before June 30, 2005, (2) a reviewable activity for which a certificate of need (CON) application was filed with the Director of Health before July 1, 2005, costs were incurred before June 30, 2005, and a rate adjustment was not implemented before June 30, 2005, and (3) an activity that the Director of Health, before July 1, 2005, ruled was not a reviewable activity requiring a CON and for which costs were incurred before June 30, 2005, and a rate adjustment was not implemented before June 30, 2005.  The Department had not made such adjustments.

In the place of that authority, the act establishes a requirement that the Director of Job and Family Services make payments to qualifying nursing facilities and intermediate care facilities for the mentally retarded (ICFs/MR) for quarterly periods starting no sooner than January 1, 2006, and ending no later than July 1, 2007.  No facility is to receive the payment before it qualifies for the payment and the payments are to end before July 1, 2007, if, before that date, $10 million is spent making the payments.  In other words, all facilities are to cease being eligible for the payments on the earlier of July 1, 2007, or the date that the total amount of the payments equals $10 million.  The Director of Job and Family Services must monitor, on a quarterly basis, the payments to ensure that no more than a total of $10 million is spent.  The payments for the last quarter that payments are made may be reduced proportionately as necessary to avoid spending more than $10 million.

Nursing facilities that are new in fiscal year 2006 or 2007

The first group of facilities that qualify for payments, are nursing facilities to which both of the following apply:

(1)  The nursing facility, during fiscal year 2006 or 2007, obtained Medicaid certification as a nursing facility from the Director of Health and began participating in the Medicaid program.

(2)  An application for a CON for the nursing facility was filed with the Director of Health before June 15, 2005.

The per diem payments to be made to a nursing facility in the first group of eligible facilities are to equal the difference between the capital costs portion of the nursing facility's Medicaid reimbursement per diem rate for fiscal year 2006 or 2007, depending on when the payments are made, and the lesser of the following:

(1)  88.65% of the nursing facility's cost of ownership[77] as reported on a three-month projected capital cost report divided by the greater of the number of inpatient days[78] the nursing facility is expected to have during the period covered by the projected capital cost report or the number of inpatient days  the nursing facility would have had during that period if its occupancy rate was 80%.

(2)  The maximum capital per diem rate in effect for fiscal year 2005 for nursing facilities.

ICFs/MR that are new in fiscal year 2006 or 2007

The second group of facilities that qualify for payments are ICFs/MR to which both of the following apply:

(1)  The ICF/MR, during fiscal year 2006 or 2007, obtained Medicaid certification as an ICF/MR from the Director of Health and began participating in the Medicaid program.

(2)  At least one of the following occurred before June 30, 2005:  any materials or equipment for the ICF/MR were delivered; preparations for the physical site of the ICF/MR, including, if applicable, excavation, began; or actual work on the ICF/MR began.

The per diem payments to be made to an ICF/MR in the second group of eligible facilities are to equal the difference between the capital cost portion of the ICF/MR's Medicaid reimbursement per diem rate for fiscal years 2006 and 2007[79] and the lesser of the following:

(1)  The ICF/MR's cost of ownership as reported on a three-month projected capital cost report divided by the greater of the number of inpatient days the ICF/MR is expected to have during the period covered by the projected capital cost report or the number of inpatient days the ICF/MR would have during that period if the ICF/MR's occupancy rate was 80%.

(2)  The maximum capital per diem rate in effect for fiscal year 2005 for ICFs/MR.

Nursing facilities that complete a capital project

The third eligible group consists of nursing facilities to which all of the following apply:

(1)  The nursing facility does not qualify under the first group.

(2)  The nursing facility, before June 30, 2007, completes a capital project for which a CON was filed with the Director of Health before June 15, 2005, and for which at least one of the following occurred before July 1, 2005, or, if the capital project is undertaken to comply with rules adopted by the Public Health Council regarding resident room size or occupancy, before June 30, 2007:  any materials or equipment for the capital project were delivered; preparations for the physical site of the capital project, including, if applicable, excavation, began; or actual work on the capital project began.

(3)  The costs of the capital project are not fully reflected in the capital costs portion of the nursing facility's Medicaid reimbursement rate on June 30, 2005.

(4)  The nursing facility files a three-month projected capital cost report with the Director of Job and Family Services not later than 60 days after the later of the effective date of this part of the act or the date the capital project is completed.

The per diem payments to be paid to a nursing facility in the third eligible group are to equal the difference between the capital costs portion of the nursing facility's Medicaid reimbursement per diem rate for fiscal year 2006 or 2007, depending on when the payments are made, and the lesser of the following:

(1)  88.65% of the nursing facility's cost of ownership as reported on a three-month projected capital cost report divided by the greater of the number of inpatient days the nursing facility is expected to have during the period covered by the projected capital cost report or the number of inpatient days the nursing facility would have during that period if the nursing facility's occupancy rate was 95%.

(2)  The maximum capital per diem rate in effect for fiscal year 2005 for nursing facilities.

ICFs/MR that complete a capital project

The fourth eligible group consists of ICFs/MR to which all of the following apply:

(1)  The ICF/MR does not qualify under the second group;

(2)  The ICF/MR, before June 30, 2007, completes a capital project for which at least one of the following occurred before July 1, 2005:  any materials or equipment for the capital project were delivered; preparations for the physical site of the capital project, including, if applicable, excavation, began; or actual work on the capital project began.

(3)  The costs of the capital project are not fully reflected in the capital costs portion of the ICF/MR's Medicaid reimbursement rate on June 30, 2005.

(4)  The ICF/MR files a three-month projected capital cost report with the Director of Job and Family Services not later than 60 days after the later of the effective date of this part of the act or the date the capital project is completed.

The per diem payments to be made to an ICF/MR in the fourth group are to equal the difference between the capital costs portion of the ICF/MR's Medicaid reimbursement per diem rate for fiscal year 2006 or 2007 and the lesser of the following:

(1)  The ICF/MR's cost of ownership as reported on a three-month projected capital cost report divided by the greater of the number of inpatient days the ICF/MR is expected to have during the period covered by the projected capital cost report or the number of inpatient days the ICF/MR would have during that period if its occupancy rate was 95%.

(2)  The maximum capital per diem rate in effect for fiscal year 2005 for ICFs/MR.

Nursing facilities that complete an activity

The fifth eligible group consists of nursing facilities that, before June 30, 2007, complete an activity to which all of the following apply:

(1)  A request was filed with the Director of Health before July 1, 2005, for a determination of whether the activity is a reviewable activity and the Director determined that the activity is not a reviewable activity and, therefore, does not need a CON.

(2)  At least one of the following occurred before July 1, 2005, or, if the nursing facility undertakes the activity to comply with rules adopted by the Public Health Council regarding resident room size or occupancy, before June 30, 2007:  any materials or equipment for the activity were delivered; preparations for the physical site of the activity, including, if applicable, excavation, began; or actual work on the activity began.

(3)  The costs of the activity are not fully reflected in the capital costs portion of the nursing facility's Medicaid reimbursement rate on June 30, 2005.

(4)  The nursing facility files a three-month projected capital cost report with the Director of Job and Family Services not later than 60 days after the later of the effective date of this part of the act or the date the activity is completed.

The per diem payments to be made to a nursing facility in the fifth group are to equal the difference between the capital costs portion of the nursing facility's Medicaid reimbursement per diem rate for fiscal year 2006 or 2007, depending on when the payments are made, and the lesser of the following:

(1)  88.65% of the nursing facility's cost of ownership as reported on a three-month projected capital cost report divided by the greater of the number of inpatient days the nursing facility is expected to have during the period covered by the projected capital cost report or the number of inpatient days the nursing facility would have during that period if its occupancy rate was 95%.

(2)  The maximum capital per diem rate in effect for fiscal year 2005 for nursing facilities.

Nursing facility or ICF/MR that completes a renovation

The sixth and last eligible group consists of nursing facilities and ICFs/MR that, before June 30, 2007, complete a renovation[80] to which all of the following apply:

(1)  The Director of Job and Family Services approved the renovation before July 1, 2005.

(2)  At least one of the following occurred before July 1, 2005, or, if the facility undertakes the renovation to comply with rules adopted by the Public Health Council regarding resident room size or occupancy, before June 30, 2007:  any materials or equipment for the renovation were delivered; preparations for the physical site of the renovation, including, if applicable, excavation, began; or actual work on the renovation began.

(3)  The costs of the renovation are not fully reflected in the capital costs portion of the facility's Medicaid reimbursement rate on June 30, 2005.

(4)  The facility files a three-month projected capital cost report with the Director of Job and Family Services not later than 60 days after the later of the effective date of this part of the act or the date the renovation is completed.

The per diem payments to be made to a nursing facility in the sixth group are to equal 85% of the nursing facility's capital costs for the renovation as reported on a three-month projected capital cost report divided by the greater of the number of inpatient days the nursing facility is expected to have during the period covered by the projected capital cost report or the number of inpatient days the nursing facility would have during that period if its occupancy rate was 95%.

The per diem payments to be made to an ICF/MR in the sixth group are to equal the ICF/MR's capital costs for the renovation as reported on a three-month projected capital cost report divided by the greater of the number of inpatient days the ICF/MR is expected to have during the period covered by the projected capital cost report or the number of inpatient days the ICF/MR would have during that period if its occupancy rate was 95%.

When payments are to begin

The act provides that no nursing facility or ICF/MR is to qualify for the payments before the following:

(1)  In the case of a nursing facility or ICF/MR in the first or second group (concerning new facilities), the later of January 1, 2006, or the date the nursing facility or ICF/MR begins to participate in the Medicaid program.

(2)  In the case of a nursing facility or ICF/MR in the third, fourth, fifth, or sixth group (concerning facilities that complete a capital project, activity, or renovation), the later of January 1, 2006, or the date the capital project, activity, or renovation is placed into service.

Quarterly payments

The per diem payments are to be made for quarterly periods to qualifying nursing facilities and ICFs/MR.  Any per diem payments to be made for a quarter ending before July 2006 is to be made not later than September 30, 2006.  Any per diem payments to be made for a quarter beginning after June 2006 is to be made not later than three months after the last day of the quarter for which the payments are made.  No payment is to be made for a quarter that a facility does not have a valid Medicaid provider agreement.  The payments are to be in addition to a facility's fiscal year 2006 or 2007 Medicaid payments calculated under other state law.

A quarterly per diem determined for a nursing facility or ICF/MR under the act is to be multiplied by the number of Medicaid days[81] the facility has for the quarter the payment is made.

Payments to continue after a change of operator

A change of operator is not to cause the payments to a nursing facility or ICF/MR to cease.  Continuing law provides that a change of operator occurs when an entering operator becomes the operator of a nursing facility or ICF/MR in the place of the exiting operator.  Actions that constitute a change of operator include the following:

(1)  A change in an exiting operator's form of legal organization, including the formation of a partnership or corporation from a sole proprietorship;

(2)  A transfer of all the exiting operator's ownership interest in the operation of the nursing facility or ICF/MR to the entering operator, regardless of whether ownership of any or all of the real property or personal property associated with the facility is also transferred;

(3)  A lease of the nursing facility or ICF/MR to the entering operator or the exiting operator's termination of the exiting operator's lease;

(4)  If the exiting operator is a partnership, dissolution of the partnership;

(5)  If the exiting operator is a partnership, a change in composition of the partnership unless the change does not cause the partnership's dissolution under state law or the partners agree that the change does not constitute a change in operator;

(6)  If the operator is a corporation, dissolution of the corporation, a merger of the corporation into another corporation that is the survivor of the merger, or a consolidation of one or more other corporations to form a new corporation.

No appeals

The determinations that the Director of Job and Family Services makes under this part of the act are not subject to appeal under the Administrative Procedure Act (R.C. Chapter 119.).

Rules

The act authorizes the Director of Job and Family Services to adopt rules as necessary to implement this part of the act.  If adopted, the rules are to be adopted in accordance with the Administrative Procedure Act (R.C. Chapter 119.).  The act provides that the Director's failure to adopt the rules does not affect the requirement that the per diem payments be made.

ICF/MR Conversion Pilot Program

(R.C. 5111.88, 5111.31, 5111.882, 5111.889, 5111.8811, 5111.8812, 5111.8813, 5111.8814, 5111.8815, 5111.8816, 5111.8817, 5112.31, 5112.311, and 5123.196)

Background

The budget bill for the 126th General Assembly (Am. Sub. H.B. 66) requires that the Director of Job and Family Services apply for a federal Medicaid waiver under which intermediate care facilities for the mentally retarded (ICFs/MR) may volunteer to convert from providing ICF/MR services to providing home and community-based services.  The waiver program is to be called the ICF/MR Conversion Pilot Program.

Authority to convert in part

The act eliminates a requirement that the Department of Job and Family Services or Department of Mental Retardation and Developmental Disabilities, whichever administers the ICF/MR Conversion Pilot Program, ensure that the ICFs/MR that convert from providing ICF/MR services to providing home and community-based services under the program cease to provide any ICF/MR services for the duration of the program.  Under the act, ICFs/MR that volunteer to participate in the program may convert in whole or in part.  The operator of an ICF/MR that converts only in part is required to place the beds that convert in a distinct part of the facility that houses the ICF/MR.

ICF/MR beds excluded from Medicaid provider agreement

Generally, every Medicaid provider agreement with the provider of a nursing facility or ICF/MR is required to include any part of the facility that meets standards for certification of compliance with federal and state laws and rules for participation in the Medicaid program.  This requirement does not apply, however, to beds added during the period beginning July 1, 1987, and ending July 1, 1993, to a licensed nursing home or beds in an ICF/MR that are designated for respite care under a Medicaid waiver program administered by the Department of Mental Retardation and Developmental Disabilities.  The act adds another exception to this requirement; beds that convert to providing home and community-based services under the ICF/MR Conversion Pilot Program.

If a provider chooses to include an otherwise exempt bed in a Medicaid provider agreement, the bed may not be removed from the provider agreement unless the provider withdraws the facility in which the bed is located from the Medicaid program.  The act creates exceptions to this.  The operator of an ICF/MR may remove a bed converted to providing home and community-based services under the ICF/MR Conversion Pilot Program and a bed that is designated for respite care under a Medicaid waiver program administered by the Department of Mental Retardation and Developmental Disabilities from a Medicaid provider agreement without having to withdraw the rest of the facility from the Medicaid program.  The requirement that the facility be withdrawn continues for an operator who removes a nursing home bed that was added during the period beginning July 1, 1987, and ending July 1, 1993.

Requirement that an ICF/MR  be licensed or certified

The act requires that an ICF/MR that converts in whole either be licensed as a residential facility by the Director of Mental Retardation and Developmental Disabilities or certified to provide supported living services.  If an ICF/MR converts in part, the distinct part of the facility that houses the beds that convert must also be licensed as a residential facility or certified to provide supported living services.  The ICF/MR or distinct part of the facility is to be licensed as a residential facility rather than certified to provide supported living services if it meets the definition of "residential facility" in continuing law governing the licensure of residential facilities.  "Residential facility" is defined as a home or facility in which an individual with mental retardation or a developmental disability resides, unless any of the following apply:  the home is the home of a relative or legal guardian of the individual, the home or facility is a certified respite care home, the home or facility is a county or district home, or the only individuals with mental retardation or a developmental disability who reside in the home or facility are in an independent living arrangement or are receiving supported living services.[82]  Because of state law that restricts the number of individuals with mental retardation or a developmental disability who may live together while receiving supported living services,[83] an ICF/MR that converts in whole or in part will meet the definition of "residential facility," and therefore have to be licensed as a residential facility rather than certified to provide supported living services, if more than four individuals with mental retardation or a developmental disability not related by blood or marriage reside in the ICF/MR or distinct part unless all of the other individuals with mental retardation or a developmental disability are in an independent living arrangement.

Reduction in bed capacity and change to Medicaid provider agreement

The operator of an ICF/MR is required to notify the appropriate licensing authority if a resident of the facility enrolls in the ICF/MR Conversion Pilot Program.[84]  The notice must be given not later than 30 days after the resident enrolls.  The requirement that the notice be provided applies regardless of whether the resident resides in a distinct part of a facility that also houses the ICF/MR.  The licensing authority is required to reduce the ICF/MR's licensed capacity by the number of residents who enroll.  The Director of Job and Family Services must be informed of each reduction in licensed capacity.

The act also requires that the operator of an ICF/MR that converts in whole or in part to notify the Director of Job and Family Services of the number of beds converted.  The notice is due not later than 30 days after the conversion.  The Director of Job and Family Services must notify the Director of Health of the operator's notice.  The Director of Health is required to reduce the ICF/MR's Medicaid-certified capacity by the number of beds converted.[85]  The Director of Health is to notify the Director of Job and Family Services whenever the Director of Health so reduces an ICF/MR's certified capacity.

On receipt of notice from the Director of Health of a reduction in an ICF/MR's certified capacity, the Director of Job and Family Services is required to amend the ICF/MR's Medicaid provider agreement to reflect the facility's reduced certified capacity or, if the ICF/MR's certified capacity is reduced to zero, terminate the ICF/MR's Medicaid provider agreement.

Reconversion at end of program

Continuing law permits an ICF/MR that converts beds under the ICF/MR Conversion Pilot Program to reconvert to providing ICF/MR services after the program terminates unless the General Assembly enacts law to implement the program statewide.  To be able to reconvert, however, the ICF/MR must meet the requirements for certification as an ICF/MR.  The act also conditions reconversion on an ICF/MR meeting the requirements for licensure as a residential facility, or if the facility meets a grandfathering provision, a nursing home.

ICF/MR franchise permit fee

ICFs/MR are required to pay an annual franchise permit fee.  For fiscal years 2006 and 2007, the amount of the franchise permit fee is $9.63 per Medicaid-certified bed (as of the first day of May of the calendar year in which the fee is assessed) and per number of days of the fiscal year.  The act requires that the Director of Job and Family Services adjust the amount of an ICF/MR's franchise permit fee if its certified capacity is reduced under the ICF/MR Conversion Pilot Program.  The Director is permitted to adjust an ICF/MR's franchise permit fee if its certified capacity is increased after the end of the program.

Increase in cap on number of licensed residential facility beds

The Director of Mental Retardation and Developmental Disabilities is generally prohibited from issuing a residential facility license if issuance will result in there being more beds in all residential facilities than is permitted by a cap on such beds that exists in continuing law.

The cap was originally 10,838 beds, but the Director of Mental Retardation and Developmental Disabilities is generally required to reduce the cap by (1) the number of beds that cease to be a residential facility bed on or after July 1, 2003, because a residential facility license is revoked, terminated, or not renewed for any reason or is surrendered and (2) the number of such beds for which a licensee voluntarily converts for use for supported living services on or after July 1, 2003.  The Director has been authorized to not reduce the cap by a bed that ceases to be a residential facility bed if the Director determines that the bed is needed to provide services to an individual with mental retardation or a developmental disability who resided in the residential facility in which the bed was located.  The act removes the Director's authority not to reduce the cap under such circumstances if the bed ceases to be a residential facility bed because it is converted to providing home and community-based services under the ICF/MR Conversion Pilot Program.

The act requires the Director to increase the cap if necessary to enable the operator of an ICF/MR to obtain a residential facility license as required to participate in the ICF/MR Conversion Pilot Program or to reconvert to providing ICF/MR services after the program terminates.

No interruption in Medicaid-covered services

Prior law required that the Department of Job and Family Services or the Department of Mental Retardation and Developmental Disabilities, whichever agency administered the ICF/MR Conversion Pilot Program, to ensure that no individual receiving ICF/MR services on September 29, 2005,[86] suffered an interruption in Medicaid-covered services that the individual was eligible to receive.  The act requires that the department administering the program ensure there is no such interruption for any individual receiving ICF/MR services without regard to the date the individual received the services.

Medicaid Care Management Working Group

(R.C. 5111.161)

H.B. 66 of this General Assembly created the Medicaid Care Management Working Group to examine and make recommendations regarding Medicaid managed care.  The act adds one additional member to the working group.  The new member is to be appointed by the President of the Senate and selected from nominations from the Ohio Optometric Association, Ohio Dental Association, and Ohio Podiatric Medical Association.  The additional member is to represent Medicaid service providers who provide services not required by federal law (optional services).

 

·        Redefines for the Alcoholic Beverages Franchise Law and the Liquor Code the term "sales area or territory."

·        Creates the F-7 liquor permit that allows the sale of beer and intoxicating liquor by the individual drink for a period not to exceed eight consecutive days at a golf event sanctioned by a recognized national golf organization.

·        Authorizes the holders of a D-5j liquor permit to sell intoxicating liquor on Sunday, whether or not such sales have been approved in a local option election on Sunday sales at the permit premises or in the area in which the permit premises is located, but only if the premises is located in a community entertainment district approved by a municipal corporation between October 1 and October 15, 2005.

·        Exempts an application for the issuance of a D liquor permit for the Ohio Judicial Center from population quota restrictions.

·        Eliminates the requirement of providing a surety bond of $1,000 when obtaining or retaining a D-4 liquor permit to sell beer or intoxicating liquor to the members of a club for consumption on club premises.

·        Reduces the number of members that a nonprofit organization owning or operating a fine arts museum must have in order to qualify for the issuance of a D-5h liquor permit.

 

 

Definition of a "sales area or territory" for the Alcoholic Beverages Franchise Law and the Liquor Code

(R.C. 1333.82(G) and 4301.01(B)(22))

Under former law, the Alcoholic Beverages Franchise Law and the Liquor Code generally defined a "sales area or territory" as an exclusive geographic area or territory that is assigned to a particular A (manufacturer) or B (distributor or wholesaler) permit holder and that either (1) has one or more political subdivisions as its boundaries or (2) consists of an area of land with readily identifiable geographic boundaries.  The exception to those definitions under former law was that a "sales area or territory" does not include any particular retail location in an exclusive geographic area or territory that is assigned to another A or B permit holder.

The act retains the aforementioned general definition of a "sales area or territory" for the Alcoholic Beverages Franchise Law and the Liquor Code, but modifies the associated exception.  Under the act, a "sales area or territory" does not include a particular retail location in an exclusive geographic area or territory that had been assigned to another A or B permit holder before April 9, 2001.  That date was the effective date of Sub. S.B. 262 of the 123rd General Assembly, the act that enacted the definitions and their former exception.

The provisions of the Alcoholic Beverages Franchise Law and Liquor Code in which the defined term "sales area or territory" continue to be used and operate are as follows:

(1)  R.C. 1333.84(B) (not in the act):  Notwithstanding the terms of any franchise, a manufacturer or distributor engaged in the sale and distribution of alcoholic beverages, or a manufacturer's subsidiary, is prohibited from awarding an additional franchise for the sale of the same brand within the same sales area or territory.  Further, a franchise does not prohibit a retail permit holder having permits at more than one location from buying from one or more B-2 or B-5 permit holders, even if all permit premises are not located in the same franchise area or territory.

(2)  R.C. 1333.85 (not in the act):  A manufacturer or distributor of alcoholic beverages generally cannot substantially change a sales area or territory without the prior consent of the other party for other than just cause and without at least 60 days' written notice to the other party setting forth the reasons for the substantial change.  Certain listed exceptions to the prohibition (events) would allow a substantial change of a sales area or territory without having to give the other party the described notice and would constitute just cause for substantially changing a sales area or territory without the prior consent of the other party.  Certain other listed events do not constitute just cause for substantially changing a sales area or territory without the prior consent of the other party.

(3)  R.C. 4301.241 (not in the act):  Each manufacturer and supplier of beer must assign to each of the manufacturer's or supplier's B-1 distributors a sales area or territory within which each B-1 permit holder will be the distributor of the brand or brands of the manufacturer or supplier.  However, if the manufacturer or supplier manufactures or supplies more than one brand of beer, the manufacturer or supplier may assign sales areas or territories to additional B-1 distributors for the distribution and sale of the additional brand or brands, as long as not more than one distributor distributes the same brand or brands within the same sales area or territory.  A B-1 distributor is prohibited from distributing a specific brand of beer in any area or territory other than the area or territory assigned to the distributor.

Creation of the F-7 liquor permit

(R.C. 4303.207)

Eligible entities

The act authorizes an F-7 permit to be issued to a "nonprofit organization" (see below) to sell beer, wine, mixed beverages, and spirituous liquor by the individual drink at a "qualified golf event" (see below) being held on premises located in a political subdivision or part of a political subdivision where the sale of beer, wine, mixed beverages, and spirituous liquor is otherwise permitted by law on that day.  The Superintendent of Liquor Control must be satisfied that the organization is, in fact, a nonprofit organization and that the event for which the F‑7 permit is sought to be issued is, in fact, a qualified golf event; for these purposes, the Superintendent may accept as proof a sworn statement by the president or other chief executive officer of the applicant organization.  The nonprofit organization is responsible for any conduct that violates the laws pertaining to the sale of beer, wine, mixed beverages, or spirituous liquor.

Definitions

The act defines the following terms for purposes of determining eligibility for an F-7 permit:

·        "Nonprofit organization" means any unincorporated association or nonprofit corporation that is not formed for the pecuniary gain or profit of, and whose net earnings or any part of whose net earnings is not distributable to, its members, trustees, directors, officers, or other private persons.

·        "Qualified golf event" means a golf tournament or other golf competition event that is hosted by the nonprofit organization to which an F-7 permit is issued, that is sanctioned by a recognized national golf organization (see below), that includes the sale of food for consumption on the premises for which the F-7 permit is issued, and that makes contributions to charity from the proceeds of the event that equal in the aggregate at least $200,000.

·        "Recognized national golf organization" means the United States Golf Association; the Professional Golf Association of America (PGA); the PGA Tour, including the Champions Tour and the Nationwide Tour; the LPGA Tour; or the successors of any of the previously listed organizations.

Premises for an F-7 permit

The premises for which an F-7 permit is issued must meet all of the following requirements:  (1) be owned or leased by the nonprofit organization to which the permit is issued, (2) be limited to areas in which the qualified golf event is conducted and to other areas contiguous to those areas in which the qualified golf event is conducted, which areas are specifically designated for food and beverage consumption and hospitality for the qualified golf event, (3) be clearly defined, and (4) be sufficiently restricted to allow proper supervision of use of the permit by state and local law enforcement personnel.

Other aspects of the F-7 permit

The Division of Liquor Control must prepare and make available an F-7 permit application form and may require applicants for the permit to provide information that, in addition to the required information described above, is necessary for administering the permit provisions.  The Division cannot issue more than two F-7 permits per calendar year to the same nonprofit organization.

An F-7 permit is effective for a period not to exceed eight consecutive days.  The fee for the permit is $450.

Issuance of Sunday sales liquor permit without local option election approval to D-5j liquor permit premises located in certain community entertainment districts

(R.C. 4303.182)

Law unchanged by the act prohibits the sale of intoxicating liquor after 2:30 a.m. on Sunday unless the liquor is sold under the authority of a permit that authorizes Sunday sale (R.C. 4301.22--not in the act).  The D-6 permit authorizes the Sunday sale of intoxicating liquor and generally is issued only to the holder of an existing liquor permit for sales at the permit holder's premises if Sunday liquor sales have been approved in a local option election on sales at that premises or in the area where the premises is located.

Continuing law, however, does authorize the issuance of a D-6 permit under certain conditions to an existing permit holder for the permit holder's premises even though Sunday liquor sales have not been approved in a local option election on sales at that premises or in the area where the premises is located.[87]  The act additionally requires a D-6 permit to be issued to the holder of any D-5j permit for a premises that is located in a community entertainment district approved by the legislative authority of a municipal corporation between October 1 and October 15, 2005, to allow sales under the D-6 permit between the hours of 10 a.m. and midnight on Sunday, whether or not those sales have been approved in a local option election on sales at that premises or in the area where the premises is located.

Continuing law defines a "community entertainment district" as a bounded area that includes or will include a combination of entertainment, retail, educational, sporting, social, cultural, or arts establishments within close proximity to certain specified types of establishments.  A "community entertainment district" must be approved by the legislative authority of a municipal corporation or a board of township trustees.  (R.C. 4301.80--not in the act.)

Population quota restrictions for the issuance of D liquor permits

(R.C. 4303.29)

Background

Continuing law generally limits the number of each type of D liquor permit (various beer and intoxicating liquor retail sales) that may be issued to any one person, firm, or corporation in a county based upon the population of that county.  Likewise, continuing law generally limits the total number of D-1 permits (beer sales for on-premises or off-premises consumption), D-2 permits (wine and mixed beverages sales for on-premises or off-premises consumption), D-3 permits (spirituous liquor sales for on-premises consumption), D-4 permits (beer and intoxicating liquor on-premises consumption--private clubs), and D-5 permits (beer and intoxicating liquor on-premises or off-premises consumption--restaurants and night clubs) that may be issued in each municipal corporation and in the unincorporated area of each township, based upon the population of that municipal corporation or unincorporated area of the township.

But, continuing law also provides that these population quota restrictions as well as any population quota restrictions contained in any rule of the Liquor Control Commission do not restrict the issuance of a D permit to authorized applicants for such a permit for certain municipally owned airports; a municipal corporation, township, or county soldiers' memorial; a municipal corporation-, township-, county-, metropolitan park district-, or state-owned golf course; the State Fairgrounds; Capitol Square; or certain zoological parks.  Thus, an application for a D permit for any of these locations is exempt from those population quota restrictions.

Changes made by the act

The act expands the list of exempt applicants by providing that the statutory population quota restrictions as well as any population quota restrictions contained in any rule of the Liquor Control Commission do not restrict the issuance of a D permit to applicants for all of part of the "Ohio Judicial Center," which is defined as the site of the Ohio Supreme Court and its grounds.  Similar to the exemption provisions applicable to the State Fairgrounds and Capitol Square, the location of a D permit issued to the Ohio Judicial Center cannot be transferred.

Bond requirement for a D-4 permit

(R.C. 4303.17)

A D-4 liquor permit may be issued to a club that has been in existence for three years or more and that is operated in the interest of the membership of a reputable organization that is maintained by a dues paying membership.  The D-4 permit authorizes the sale of beer or intoxicating liquor to members of the club only, in glass or in container, for consumption on the premises where sold.  In order to be granted or to retain a D-4 permit, the elected officers of the organization controlling the club must file a statement with the Division of Liquor Control certifying that the club meets the criteria mentioned above and setting forth the initiation fee and yearly dues of the "dues paying membership."

Under former law, that statement had to be signed under oath and had to be accompanied by a bond that satisfied all of the following:  it was in the sum of $1,000, it was a surety bond, and it had to be declared forfeited in the full amount of the penal sum for any false statement in the applicant's statement.  The act continues to require that the applicant's statement be signed under oath but eliminates the requirement that any type of bond accompany an application for a D-4 permit.

Issuance of D-5h permit for fine arts museums

(R.C. 4303.181)

Under former law, in order for a nonprofit organization that owned or operated a fine arts museum to qualify for issuance of a D-5h liquor permit (retail sale of beer or intoxicating liquor until 1 a.m. by individual glass or in containers for consumption on the premises where sold), the organization had to have no less than 5,000 bona fide members possessing full membership privileges.  The act reduces this number of bona fide members to 1,500.  (R.C. 4303.181(H)(1)(a).)

 

·        Specifies that, despite the local government fund "freeze," distributions of county undivided local government funds to county governments remain subject to reduction if municipal populations pass threshold amounts.

·        Replaces the requirement that a county family and children first council's service coordination mechanism ensure that a family service coordination plan meeting be conducted for every multi-need child placed out-of-home with a requirement that the mechanism ensure such a meeting for each child who receives service coordination under the mechanism and for whom an emergency out-of-home placement has been made or for whom a nonemergency out-of-home placement is being considered.

·        Authorizes boards of county commissioners to maintain and operate facilities to encourage the study of and to promote the sciences and natural history and to contract with or contribute to certain nonprofit corporations to develop, maintain, and operate such a facility.

·        Authorizes boards of county commissioners, with voter approval, to levy a property tax for maintenance and operation of a facility that promotes the sciences and natural history.

·        Permits the board of county commissioners in a county with a community mental health board separate from the alcohol and drug addiction services board to establish a board of alcohol, drug addiction, and mental health services (ADAMH board) in accordance with the following procedures:  (1) adoption of a resolution of intent by January 1, 2007, (2) preparation of a report by the existing boards, and (3) adoption of a final resolution establishing the ADAMH board by July 1, 2007.