To amend sections 102.01, 103.13, 103.132, 103.143, 103.16, 103.17, 103.18, 103.20, 103.21, 103.23, 124.14, 126.02, 126.21, 3333.04, 3333.12, 3333.122, 3333.27, 3769.08, 3769.20, 4743.01, and 5120.51 and to enact sections 103.35 and 103.36 of the Revised Code to establish the Legislative Budget Committee and the Legislative Budget Office of the Legislative Service Commission.

Section 1. That sections 102.01, 103.13, 103.132, 103.143, 103.16, 103.17, 103.18, 103.20, 103.21, 103.23, 124.14, 126.02, 126.21, 3333.04, 3333.12, 3333.122, 3333.27, 3769.08, 3769.20, 4743.01, and 5120.51 be amended and sections 103.35 and 103.36 of the Revised Code be enacted to read as follows:

Sec. 102.01.  As used in this chapter:

(A) "Compensation" means money, thing of value, or financial benefit. "Compensation" does not include reimbursement for actual and necessary expenses incurred in the performance of official duties.

(B) "Public official or employee" means any person who is elected or appointed to an office or is an employee of any public agency. "Public official or employee" does not include a person elected or appointed to the office of precinct, ward, or district committee member under section 3517.03 of the Revised Code, any presidential elector, or any delegate to a national convention. "Public official or employee" does not include a person who is a teacher, instructor, professor, or other kind of educator whose position does not involve the performance of, or authority to perform, administrative or supervisory functions.

(C) "Public agency" means the general assembly, all courts, any department, division, institution, board, commission, authority, bureau or other instrumentality of the state, a county, city, village, or township, the five state retirement systems, or any other governmental entity. "Public agency" does not include a department, division, institution, board, commission, authority, or other instrumentality of the state or a county, municipal corporation, township, or other governmental entity that functions exclusively for cultural, educational, historical, humanitarian, advisory, or research purposes; that does not expend more than ten thousand dollars per calendar year, excluding salaries and wages of employees; and whose members are uncompensated.

(D) "Immediate family" means a spouse residing in the person's household and any dependent child.

(E) "Income" includes gross income as defined and used in the "Internal Revenue Code of 1986," 100 Stat. 2085, 26 U.S.C. 1, as amended, interest and dividends on obligations or securities of any state or of any political subdivision or authority of any state or political subdivision, and interest or dividends on obligations of any authority, commission, or instrumentality of the United States.

(F) Except as otherwise provided in division (A) of section 102.08 of the Revised Code, "appropriate ethics commission" means:

(1) For matters relating to members of the general assembly, employees of the general assembly, employees of the legislative service commission and legislative budget office of the legislative service commission, and candidates for the office of member of the general assembly, the joint legislative ethics committee;

(2) For matters relating to judicial officers and employees, and candidates for judicial office, the board of commissioners on grievances and discipline of the supreme court;

(3) For matters relating to all other persons, the Ohio ethics commission.

(G) "Anything of value" has the same meaning as provided in section 1.03 of the Revised Code and includes, but is not limited to, a contribution as defined in section 3517.01 of the Revised Code.

(H) "Honorarium" means any payment made in consideration for any speech given, article published, or attendance at any public or private conference, convention, meeting, social event, meal, or similar gathering. "Honorarium" does not include ceremonial gifts or awards that have insignificant monetary value; unsolicited gifts of nominal value or trivial items of informational value; or earned income from any person, other than a legislative agent, for personal services that are customarily provided in connection with the practice of a bona fide business, if that business initially began before the public official or employee conducting that business was elected or appointed to the public official's or employee's office or position of employment.

(I) "Employer" means any person who, directly or indirectly, engages an executive agency lobbyist or legislative agent.

(J) "Executive agency decision," "executive agency lobbyist," and "executive agency lobbying activity" have the same meanings as in section 121.60 of the Revised Code.

(K) "Legislation," "legislative agent," "financial transaction," and "actively advocate" have the same meanings as in section 101.70 of the Revised Code.

(L) "Expenditure" has the same meaning as in section 101.70 of the Revised Code when used in relation to activities of a legislative agent, and the same meaning as in section 121.60 of the Revised Code when used in relation to activities of an executive agency lobbyist.

Sec. 103.13.  The Ohio legislative service commission shall:

(A) Conduct research, make investigations, and secure information or data on any subject and make reports thereon to the general assembly;

(B) Ascertain facts and make reports concerning the state budget, the revenues and expenditures of the state, and of the organization and functions of the state, its departments, subdivisions, and agencies;

(C) Make surveys, investigations, and studies, and compile data, information, and records on any question which may be referred to it by either house of the general assembly or any standing committee of the general assembly;

(D)(C) Assist and cooperate with any interim legislative committee or other agency created by the general assembly;

(E)(D) Prepare or advise in the preparation of any bill or resolution, when requested by any member of the general assembly;

(F)(E) Collect, classify, and index the documents of the state which shall include executive and legislative documents and departmental reports and keep on file all bills, resolutions, and official journals printed by order of either house of the general assembly;

(G)(F) Provide members of the general assembly with impartial and accurate information and reports concerning legislative problems in accordance with rules prescribed by the commission;

(H) Annually collect the reports required by section 4743.01 of the Revised Code and prepare a report evaluating the extent to which state boards and commissions which regulate occupations are financially self-supporting. The report shall be presented to the speaker and the minority leader of the house of representatives, the president and the minority leader of the senate, and the chairperson and ranking minority member of the finance committees of both houses, on or before the thirty-first day of December each year.

(I)(G) Codify the rules of administrative agencies of the state in accordance with the provisions of section 103.05 of the Revised Code;

(J)(H) Publish the register of Ohio under section 103.051 of the Revised Code;

(K)(I) Operate the electronic rule-filing system under section 103.0511 of the Revised Code.

Sec. 103.132. The legislative budget office of the legislative service commission, in conjunction with the legislative information systems office, shall establish and maintain an electronic database containing current and historical revenue and expenditure data for each school district in the state that is easy to use and readily accessible through the internet.

Sec. 103.143.  In addition to its duties under section 103.14 of the Revised Code, the legislative budget office of the legislative service commission shall, in accordance with this section, review all bills assigned to a committee of the general assembly, complete the appropriate local impact statements required by this section, and compile and distribute these statements as required by division (D) of this section.

(A) Subject to division (F) of this section, whenever any bill is introduced into either house of the general assembly and receives second consideration pursuant to the rules of that house, the bill shall be reviewed immediately by the legislative budget officer. Upon completing this review, the legislative budget officer shall determine whether the bill could result in a net additional cost to school districts, counties, townships, or municipal corporations from any new or expanded program or service that school districts, counties, townships, or municipal corporations would be required to perform or administer under the bill. If the legislative budget officer determines that it could result in such a cost, the legislative service commission budget office shall prepare a local impact statement in the manner specified in this section. Immediately upon determining the potential for a net additional cost, the legislative budget officer shall notify the sponsor of the bill, the chairperson of the committee to which the bill has been assigned, and the presiding officer and minority leader of the house in which the bill originates of the legislative budget officer's determination by signing and dating a statement to be delivered to them.

If a local impact statement is required, the legislative service commission budget office shall, as soon as possible but no later than thirty days after the date the bill is scheduled for a first hearing in a committee in the house in which the bill was introduced or no later than thirty days after being requested to do so by the chairperson of such a committee, prepare a statement containing the most accurate estimate possible, in dollars, of the net additional costs, if any, that will be required of school districts, counties, townships, or municipal corporations to perform or administer a new or expanded program or service required under the bill. Copies of this statement shall be sent to the governor, the speaker of the house of representatives, the president of the senate, the sponsor of the bill, the minority leader in both houses, and the chairperson of the committee to which the bill has been assigned.

No bill for which a local impact statement is required by this section shall be voted out of committee until after the committee members have received and considered the statement or, if the bill was amended in committee, the revised statement, unless the bill is voted out of committee by a two-thirds vote of the membership of the committee.

(B) In preparing a local impact statement, the legislative service commission budget office may request any department, division, institution, board, commission, authority, bureau, or other instrumentality or officer of the state, a school district, a county, a municipal corporation, or a township to provide any of the following information:

(1) An estimate, in dollars, of the amount by which the bill would increase or decrease the revenues received or expenditures made by the instrumentality, officer, or entity;

(2) Any other information the legislative service commission budget office considers necessary for it to understand or explain the fiscal effect of the bill.

An instrumentality, officer, or entity shall comply with a request as soon as reasonably possible, but not later than fifteen days, after receiving it. The legislative service commission budget office shall specify the manner of compliance in its request, and if necessary may specify a period of time longer than fifteen days for compliance. The legislative service commission budget office may consider any information provided under division (B)(1) or (2) of this section in preparing a local impact statement.

(C) Any time a bill is amended, the legislative service commission budget office shall, as soon as reasonably possible, revise the local impact statement to reflect changes made by amendment.

(D) The legislative service commission budget office shall annually compile the final local impact statements completed for all laws passed by both houses of the general assembly in the preceding year. It shall send a copy of this compilation as a draft report to associations or nonprofit organizations formed for the improvement of school districts or municipal, township, or county government or for their elected officials by the last day of July of each year. Upon receiving the draft report, these associations and organizations may comment about the actual fiscal impact of bills passed during the year covered by the report and forward those comments to the legislative service commission budget office by the last day of August. The legislative service commission budget office shall then prepare a final report consisting of the compiled local impact statements and all forwarded comments. The final report shall be completed by the last day of September and copies of the report shall be sent to the governor, the speaker of the house of representatives, and the president of the senate.

(E) As used in this section, "net additional cost" means any cost incurred or anticipated to be incurred by a school district, county, township, or municipal corporation in performing or administering a new or expanded program or service required by a state law other than any of the following:

(1) A cost arising from the exercise of authority granted by a state law rather than from the performance of a duty or obligation imposed by a state law;

(2) New duties or obligations that create only a minimal cost for affected school districts, counties, townships, or municipal corporations. The legislative service commission budget office shall determine what constitutes such a minimal cost. Before making this determination, the legislative service commission budget office shall notify the state organizations that represent school districts, counties, townships, and municipal corporations regarding the proposed determination and provide a thirty-day period for these organizations and individual school districts, counties, townships, and municipal corporations to comment on it.

(3) A cost arising from a law passed as a result of a federal mandate.

The amounts described in division (E)(2) of this section include only the amounts remaining after subtracting from such costs any revenues received or receivable by the school district, county, township, or municipal corporation on account of the program or service, including the following:

(a) Fees charged to the recipients of the program or service;

(b) State or federal aid paid specifically or categorically in connection with the program or service;

(c) Any offsetting savings resulting from the diminution or elimination of any other program or service directly attributable to the performance or administration of the required program or service.

(F) This section does not apply to any of the following:

(1) The main biennial operating appropriations bill;

(2) The biennial operating appropriations bill for state agencies supported by motor fuel tax revenue;

(3) The biennial operating appropriations bill or bills for the bureau of workers' compensation and the industrial commission;

(4) Any other bill that makes the principal biennial operating appropriations for one or more state agencies;

(5) The bill that primarily contains corrections and supplemental appropriations to the biennial operating appropriations bills;

(6) The main biennial capital appropriations bill;

(7) The bill that primarily contains reappropriations from previous capital appropriations bills.

Sec. 103.16.  The Ohio legislative service commission or any committee thereof of the commission or under its direction when so authorized by the commission is empowered to hold public hearings, at such times and places within the state as may be determined advisable or necessary to accomplish the purposes and intent of sections 103.11 to 103.22 of the Revised Code.

Sec. 103.17.  In the discharge of any duties imposed by law, any member of the Ohio legislative service commission or legislative budget committee shall have the authority throughout the state to administer oaths, issue subpoenas compelling the attendance of witnesses and the production of any papers, books, accounts, and testimony; and to cause the deposition of witnesses either residing in or without the state. In case of disobedience on the part of any person to comply with a subpoena issued on behalf of the commission or committee, or on the refusal of any witness to testify to any matters regarding which he may be lawfully interrogated, it shall be the duty of the county prosecutor in any county, on application of the commission or committee, to bring a proceeding for contempt.

Sec. 103.18.  The Ohio legislative service commission or any committee appointed by or under the direction of the commission may call upon any state department, university, agency, or officer, or agency of any political subdivision for such facilities and data as may be available and state departments, universities, agencies and officers, and agencies of political subdivisions shall cooperate with the commission or any committee appointed by or under the direction of the commission to the fullest possible extent.

Sec. 103.20.  The Ohio legislative service commission and the legislative budget office of the legislative service commission shall be provided with adequate office space in the state house. The director of the Ohio legislative service commission or legislative budget officer, with the approval of the commission, may obtain office space elsewhere in Columbus if the space in the state house is inadequate.

Sec. 103.21.  (A) The compensation of the director, legislative budget officer, and all officers and employees of the Ohio legislative service commission and the legislative budget office of the legislative service commission, the expenses of the commission, and the expenses of the director and the employees of the commission and budget office shall be paid out of appropriations made for that purpose upon vouchers approved by the director, budget officer, and the chairperson of the commission.

(B) The director of budget and management, upon the request of the director of the legislative service commission or the legislative budget officer and with the approval of the chairperson and vice-chairperson of the commission, shall make transfers of all or part of an appropriation within the commission or from one fiscal year to another.

Sec. 103.23.  The legislative service commission shall serve as a legislative budget and program oversight commission and may delegate to any committee it creates or has authority to direct the responsibility to:

(A) Conduct program reviews of state agencies and departments or programs and activities within such agencies and departments, of the state's local assistance programs, and of state laws. As used in this section "program review" means an examination and review of any state agency, department, bureau, commission, or institution, or any activity, program, or law of the state to determine whether or to what extent the intent and goals of the organization, activity, program, or law are being achieved and whether funds appropriated have been efficiently and effectively expended;

(B) Continually review and evaluate federal and state government relationships and the fiscal, economic, and social implications thereof;

(C) Annually prepare and update long-range fiscal plans for the state;

(D) Provide staff to assist the controlling board in performing its duties and exercising its powers.

If in a program review the commission cites the failure of a program to meet intended goals, inadequate operating or administrative procedures or controls, fiscal or program reporting inaccuracies, waste, extravagance, unauthorized or unintended activities or programs, or other deficiencies, the head of the state department, agency, bureau, commission, or institution or the official responsible for the program shall respond to the report and inform the commission, at such times and in such manner and form as the commission determines, of any corrective actions that have been taken. The commission shall report the results of all program reviews to the general assembly.

No official of a state agency, department, bureau, commission, or institution shall refuse to provide or make available to the legislative service commission any information or records under its control or in its possession when requested to provide such information as part of the exercise of the commission's powers in this section and section sections 103.13 and 103.36 of the Revised Code unless the law dealing with the information or records specifically states that the commission is not authorized to review such information or records. No member or employee of the commission shall use any confidential information or record for any purpose except those authorized in this section and section sections 103.13 and 103.36 of the Revised Code.

Sec. 103.35.  (A) There is hereby created the legislative budget committee under the direction of the legislative service commission. The committee shall seek to attain improved state financial and administrative management through the exercise of continuous review and analysis of state revenues, expenditures, and management practices.

(B) The committee shall consist of the following members:

(1) Four members of the legislative service commission, two from each house of the general assembly and two from each political party, appointed by the members of the commission;

(2) The chairperson and one member of the majority political party from the senate committee handling finance and appropriations, appointed by the president pro tempore of the senate;

(3) Two members of the minority political party from the senate committee handling finance and appropriations, appointed by the president pro tempore of the senate;

(4) The chairperson and one member of the majority political party from the house committee handling finance and appropriations, appointed by the speaker of the house of representatives;

(5) Two members of the minority political party from the house committee handling finance and appropriations, appointed by the speaker of the house of representatives.

Appointments shall be made not later than the effective date of this section. The members of the committee shall serve during their term as a member of the general assembly and until their successors are appointed and qualified, notwithstanding the adjournment of the general assembly of which they are members or the expiration of their terms as members of such general assembly. A vacancy in the office of any member of the commission shall be filled for the unexpired term in the same manner as the original appointment. Committee members may be reappointed.

The legislative budget committee shall select from its members a chairperson and vice-chairperson. The offices of chairperson and vice-chairperson shall alternate each session of the general assembly between the members of the senate and the house of representatives and between political parties.

(C) The legislative budget committee shall hold its first meeting not later than thirty days after the effective date of this section and shall meet at least once every sixty days thereafter, or more frequently at the call of the chairperson. A majority of members of the committee constitutes a quorum.

(D) The legislative budget committee shall establish priorities respecting the work of the staff of the legislative budget office created in section 103.36 of the Revised Code and shall review the work of the legislative budget officer and staff.

(E) The members of the committee shall serve without compensation but shall be reimbursed for their actual and necessary expenses incurred in the performance of their official duties.

Sec. 103.36.  (A) There is hereby created the legislative budget office of the legislative service commission under the direction of the legislative budget committee. The legislative budget office shall be administered by the legislative budget officer appointed by the legislative budget committee. The legislative budget officer shall report directly to the legislative budget committee.

(B) The office shall employ professional staff and clerical personnel as are necessary for its operations. The legislative budget officer shall be responsible for recruiting, hiring, dismissing, and supervising the staff of the legislative budget office.

Professional staff shall be expected to develop specialized knowledge in particular areas of governmental services and shall be called on to provide research and other information in that specialty to any member of the general assembly.

(C) The legislative budget office shall provide financial oversight and continuous monitoring of state finances to the general assembly. In addition to any duties specified elsewhere in the Revised Code, the office shall provide the following services to the legislative budget committee:

(1) Analyze and make reports to the legislative budget committee concerning the state budget, revenues and expenditures of the state, and organization and functions of the state, its departments, subdivisions, and agencies;

(2) Review, as appropriate, compliance by state agencies with legislative intent as established through the appropriation process and inform the committee of deviations from legislative intent;

(3) Advise the committee of any potential problems or issues arising with regards to state finance, on the office's own initiative and on request;

(4) Raise any questions regarding fiscal actions taken by the governor or a state agency, on the office's own initiative and on request;

(5) Annually collect the reports required by section 4743.01 of the Revised Code and prepare a report evaluating the extent to which state boards and commissions which regulate occupations are financially self-supporting. The report shall be presented to the speaker and the minority leader of the house of representatives, the president and the minority leader of the senate, and the chairperson and ranking minority member of the finance committees of both houses, on or before the thirty-first day of December each year.

(6) Perform any other tasks related to state finance as requested by a member of the legislative budget committee.

Sec. 124.14.  (A)(1) The director of administrative services shall establish, and may modify or rescind, by rule, a job classification plan for all positions, offices, and employments the salaries of which are paid in whole or in part by the state. The director shall group jobs within a classification so that the positions are similar enough in duties and responsibilities to be described by the same title, to have the same pay assigned with equity, and to have the same qualifications for selection applied. The director shall, by rule, assign a classification title to each classification within the classification plan. However, the director shall consider in establishing classifications, including classifications with parenthetical titles, and assigning pay ranges such factors as duties performed only on one shift, special skills in short supply in the labor market, recruitment problems, separation rates, comparative salary rates, the amount of training required, and other conditions affecting employment. The director shall describe the duties and responsibilities of the class, establish the qualifications for being employed in each position in the class, and file with the secretary of state a copy of specifications for all of the classifications. The director shall file new, additional, or revised specifications with the secretary of state before they are used.

The director shall, by rule, assign each classification, either on a statewide basis or in particular counties or state institutions, to a pay range established under section 124.15 or section 124.152 of the Revised Code. The director may assign a classification to a pay range on a temporary basis for a period of six months. The director may establish, by rule adopted under Chapter 119. of the Revised Code, experimental classification plans for some or all employees paid directly by warrant of the director of budget and management. The rule shall include specifications for each classification within the plan and shall specifically address compensation ranges, and methods for advancing within the ranges, for the classifications, which may be assigned to pay ranges other than the pay ranges established under section 124.15 or 124.152 of the Revised Code.

(2) The director of administrative services may reassign to a proper classification those positions that have been assigned to an improper classification. If the compensation of an employee in such a reassigned position exceeds the maximum rate of pay for the employee's new classification, the employee shall be placed in pay step X and shall not receive an increase in compensation until the maximum rate of pay for that classification exceeds the employee's compensation.

(3) The director may reassign an exempt employee, as defined in section 124.152 of the Revised Code, to a bargaining unit classification if the director determines that the bargaining unit classification is the proper classification for that employee. Notwithstanding Chapter 4117. of the Revised Code or instruments and contracts negotiated under it, these placements are at the director's discretion.

(4) The director shall, by rule, assign related classifications, which form a career progression, to a classification series. The director shall, by rule, assign each classification in the classification plan a five-digit number, the first four digits of which shall denote the classification series to which the classification is assigned. When a career progression encompasses more than ten classifications, the director shall, by rule, identify the additional classifications belonging to a classification series. The additional classifications shall be part of the classification series, notwithstanding the fact that the first four digits of the number assigned to the additional classifications do not correspond to the first four digits of the numbers assigned to other classifications in the classification series.

(5) The director, in accordance with rules adopted under Chapter 119. of the Revised Code, shall establish, and may modify or rescind, a classification plan for county agencies that elect not to use the services and facilities of a county personnel department. The rules shall include a methodology for the establishment of titles unique to county agencies, the use of state classification titles and classification specifications for common positions, the criteria for a county to meet in establishing its own classification plan, and the establishment of what constitutes a classification series for county agencies.

(B) Division (A) of this section and sections 124.15 and 124.152 of the Revised Code do not apply to the following persons, positions, offices, and employments:

(1) Elected officials;

(2) Legislative employees, employees of the legislative service commission, employees of the legislative budget office of the legislative service commission, employees in the office of the governor, employees who are in the unclassified civil service and exempt from collective bargaining coverage in the office of the secretary of state, auditor of state, treasurer of state, and attorney general, and employees of the supreme court;

(3) Employees of a county children services board that establishes compensation rates under section 5153.12 of the Revised Code;

(4) Any position for which the authority to determine compensation is given by law to another individual or entity;

(5) Employees of the bureau of workers' compensation whose compensation the administrator of workers' compensation establishes under division (B) of section 4121.121 of the Revised Code.

(C) The director may employ a consulting agency to aid and assist the director in carrying out this section.

(D)(1) When the director proposes to modify a classification or the assignment of classes to appropriate pay ranges, the director shall send written notice of the proposed rule to the appointing authorities of the affected employees thirty days before a hearing on the proposed rule. The appointing authorities shall notify the affected employees regarding the proposed rule. The director also shall send those appointing authorities notice of any final rule that is adopted within ten days after adoption.

(2) When the director proposes to reclassify any employee so that the employee is adversely affected, the director shall give to the employee affected and to the employee's appointing authority a written notice setting forth the proposed new classification, pay range, and salary. Upon the request of any classified employee who is not serving in a probationary period, the director shall perform a job audit to review the classification of the employee's position to determine whether the position is properly classified. The director shall give to the employee affected and to the employee's appointing authority a written notice of the director's determination whether or not to reclassify the position or to reassign the employee to another classification. An employee or appointing authority desiring a hearing shall file a written request for the hearing with the state personnel board of review within thirty days after receiving the notice. The board shall set the matter for a hearing and notify the employee and appointing authority of the time and place of the hearing. The employee, the appointing authority, or any authorized representative of the employee who wishes to submit facts for the consideration of the board shall be afforded reasonable opportunity to do so. After the hearing, the board shall consider anew the reclassification and may order the reclassification of the employee and require the director to assign the employee to such appropriate classification as the facts and evidence warrant. As provided in division (A)(1) of section 124.03 of the Revised Code, the board may determine the most appropriate classification for the position of any employee coming before the board, with or without a job audit. The board shall disallow any reclassification or reassignment classification of any employee when it finds that changes have been made in the duties and responsibilities of any particular employee for political, religious, or other unjust reasons.

(E)(1) Employees of each county department of job and family services shall be paid a salary or wage established by the board of county commissioners. The provisions of section 124.18 of the Revised Code concerning the standard work week apply to employees of county departments of job and family services. A board of county commissioners may do either of the following:

(a) Notwithstanding any other section of the Revised Code, supplement the sick leave, vacation leave, personal leave, and other benefits of any employee of the county department of job and family services of that county, if the employee is eligible for the supplement under a written policy providing for the supplement;

(b) Notwithstanding any other section of the Revised Code, establish alternative schedules of sick leave, vacation leave, personal leave, or other benefits for employees not inconsistent with the provisions of a collective bargaining agreement covering the affected employees.

(2) Division (E)(1) of this section does not apply to employees for whom the state employment relations board establishes appropriate bargaining units pursuant to section 4117.06 of the Revised Code, except in either of the following situations:

(a) The employees for whom the state employment relations board establishes appropriate bargaining units elect no representative in a board-conducted representation election.

(b) After the state employment relations board establishes appropriate bargaining units for such employees, all employee organizations withdraw from a representation election.

(F)(1) Notwithstanding any contrary provision of sections 124.01 to 124.64 of the Revised Code, the board of trustees of each state university or college, as defined in section 3345.12 of the Revised Code, shall carry out all matters of governance involving the officers and employees of the university or college, including, but not limited to, the powers, duties, and functions of the department of administrative services and the director of administrative services specified in this chapter. Officers and employees of a state university or college shall have the right of appeal to the state personnel board of review as provided in this chapter.

(2) Each board of trustees shall adopt rules under section 111.15 of the Revised Code to carry out the matters of governance described in division (F)(1) of this section. Until the board of trustees adopts those rules, a state university or college shall continue to operate pursuant to the applicable rules adopted by the director of administrative services under this chapter.

(G)(1) Each board of county commissioners may, by a resolution adopted by a majority of its members, establish a county personnel department to exercise the powers, duties, and functions specified in division (G) of this section. As used in division (G) of this section, "county personnel department" means a county personnel department established by a board of county commissioners under division (G)(1) of this section.

(2)(a) Each board of county commissioners, by a resolution adopted by a majority of its members, may designate the county personnel department of the county to exercise the powers, duties, and functions of the department of administrative services and the director of administrative services specified in sections 124.01 to 124.64 and Chapter 325. of the Revised Code, except for the powers and duties of the state personnel board of review, which powers and duties shall not be construed as having been modified or diminished in any manner by division (G)(2) of this section, with respect to the employees for whom the board of county commissioners is the appointing authority or co-appointing authority. The board of county commissioners shall deliver a certified copy of the resolution to the director of administrative services not later than ten working days after the resolution is adopted, and the director shall inform the board in a writing sent by certified mail of the date of receipt of the copy of the resolution.

(b) Upon the director's receipt of the copy of the resolution, the powers, duties, and functions referred to in division (G)(2)(a) of this section that may be exercised shall be vested in and assigned to the county personnel department with respect to the employees for whom the board of county commissioners is the appointing authority or co-appointing authority.

(c) Nothing in division (G)(2) of this section shall be construed to limit the right of any employee who possesses the right of appeal to the state personnel board of review to continue to possess that right of appeal.

(d) Any board of county commissioners that has established a county personnel department may contract with the department of administrative services, another political subdivision, or an appropriate public or private entity to provide competitive testing services or other appropriate services.

(3) After the county personnel department of a county has assumed the powers, duties, and functions of the department of administrative services and the director of administrative services as described in division (G)(2) of this section, any elected official, board, agency, or other appointing authority of that county, upon written notification to the director, may elect to use the services and facilities of the county personnel department. Upon the acceptance by the director of that written notification, the county personnel department shall exercise the powers, duties, and functions of the department of administrative services and the director as described in division (G)(2) of this section with respect to the employees of that elected official, board, agency, or other appointing authority. The director shall inform the elected official, board, agency, or other appointing authority in a writing sent by certified mail of the date of acceptance of that written notification. Except for those employees under the jurisdiction of the county personnel department, the director shall continue to exercise these powers, duties, and functions with respect to employees of the county.

(4) When at least two years have passed since the creation of a county personnel department, a board of county commissioners, by a resolution adopted by a majority of its members, may disband the county personnel department and return to the department of administrative services for the administration of sections 124.01 to 124.64 and Chapter 325. of the Revised Code. The board shall deliver a certified copy of the resolution to the director of administrative services not later than ten working days after the resolution is adopted, and the director shall inform the board in a writing sent by certified mail of the date of receipt of the copy of the resolution. Upon the director's receipt of the copy of the resolution, all powers, duties, and functions previously vested in and assigned to the county personnel department shall return to the director.

(5) When at least two years have passed since electing to use the services and facilities of a county personnel department, an elected official, board, agency, or appointing authority of a county may return to the department of administrative services for the administration of sections 124.01 to 124.64 and Chapter 325. of the Revised Code. The elected official, board, agency, or appointing authority shall send the director of administrative services a certified copy of the resolution that states its decision to return to the department of administrative services' jurisdiction, and the director shall inform the elected official, board, agency, or appointing authority in a writing sent by certified mail of the date of receipt of the copy of the resolution. Upon the director's receipt of the copy of the resolution, all powers, duties, and functions previously vested in and assigned to the county personnel department with respect to the employees of that elected official, board, agency, or appointing authority shall return to the director.

(6) The director of administrative services, by rule adopted in accordance with Chapter 119. of the Revised Code, shall prescribe criteria and procedures for granting to each county personnel department the powers, duties, and functions of the department of administrative services and the director as described in division (G)(2) of this section with respect to the employees of an elected official, board, agency, or other appointing authority or co-appointing authority. The rules shall cover the following criteria and procedures:

(a) The notification to the department of administrative services that an elected official, board, agency, or other appointing authority of a county has elected to use the services and facilities of the county personnel department;

(b) A requirement that each county personnel department, in carrying out its duties, adhere to merit system principles with regard to employees of county departments of job and family services, child support enforcement agencies, and public child welfare agencies so that there is no threatened loss of federal funding for these agencies, and a requirement that the county be financially liable to the state for any loss of federal funds due to the action or inaction of the county personnel department. The costs associated with audits conducted to monitor compliance with division (G)(6)(b) of this section shall be borne equally by the department of administrative services and the county.

(c) The termination of services and facilities rendered by the department of administrative services, to include rate adjustments, time periods for termination, and other related matters;

(d) Authorization for the director of administrative services to conduct periodic audits and reviews of county personnel departments to guarantee the uniform application of this granting of the director's powers, duties, and functions. The costs of the audits and reviews shall be borne equally by the department of administrative services and the county for which the services are performed.

(e) The dissemination of audit findings under division (G)(6)(d) of this section, any appeals process relating to adverse findings by the department, and the methods whereby the county personnel program will revert to the authority of the director of administrative services due to misuse or nonuniform application of the authority granted to the county under division (G)(2) or (3) of this section.

(H) The director of administrative services shall establish the rate and method of compensation for all employees who are paid directly by warrant of the director of budget and management and who are serving in positions that the director of administrative services has determined impracticable to include in the state job classification plan. This division does not apply to elected officials, legislative employees, employees of the legislative service commission, employees who are in the unclassified civil service and exempt from collective bargaining coverage in the office of the secretary of state, auditor of state, treasurer of state, and attorney general, employees of the courts, employees of the bureau of workers' compensation whose compensation the administrator of workers' compensation establishes under division (B) of section 4121.121 of the Revised Code, or employees of an appointing authority authorized by law to fix the compensation of those employees.

(I) The director shall set the rate of compensation for all intermittent, seasonal, temporary, emergency, and casual employees in the service of the state who are not considered public employees under section 4117.01 of the Revised Code. Those employees are not entitled to receive employee benefits. This rate of compensation shall be equitable in terms of the rate of employees serving in the same or similar classifications. This division does not apply to elected officials, legislative employees, employees of the legislative service commission, employees of the legislative budget office of the legislative service commission, employees who are in the unclassified civil service and exempt from collective bargaining coverage in the office of the secretary of state, auditor of state, treasurer of state, and attorney general, employees of the courts, employees of the bureau of workers' compensation whose compensation the administrator establishes under division (B) of section 4121.121 of the Revised Code, or employees of an appointing authority authorized by law to fix the compensation of those employees.

Sec. 126.02.  The director of budget and management shall prepare and submit to the governor, biennially, not later than the first day of January preceding the convening of the general assembly, state budget estimates of revenues and expenditures for each state fund and budget estimates for each state agency, except such estimates as are required under section 126.022 of the Revised Code. The budget estimates for each state agency for which direct appropriations are proposed shall include the following details:

(A) Estimates of the operating budget;

(B) Estimates of the subsidy appropriations necessary, delineated by a distinct subsidy program;

(C) Estimates for special purposes, delineated by a distinct special purpose program;

(D) Estimates of appropriations necessary from each fund in reasonable detail to allow for adequate planning and oversight of programs and activities.

In the preparation of state revenue and expenditure estimates, the director of budget and management shall, not later than the fifteenth day of September in the year preceding the first regular session of the general assembly, distribute to all affected state agencies the forms necessary for the preparation of budget requests, which shall be in the form prescribed by the director in consultation with legislative budget office of the legislative service commission to procure information concerning the revenues and expenditures for the preceding and current bienniums, an estimate of the revenues and expenditures of the current fiscal year, and an estimate of the revenues and proposed expenditures for the respective agencies for the two succeeding fiscal years for which appropriations have to be made. Each such agency shall, not later than the first day of November, file with the director its estimate of revenues and proposed expenditures for the succeeding biennium.

Each such agency shall, not later than the first day of December, file with the chairperson of the finance committees of the senate and house of representatives and the legislative service commission budget office a duplicate copy of such budget request.

The budget request shall be accompanied by a statement in writing giving facts and explanation of reasons for the items requested. The director and the legislative service commission budget office may make further inquiry and investigation as to any item desired. The director may approve, disapprove, or alter the requests, excepting those for the legislative and judicial branches of the state. The requests as revised by the director constitute the state budget estimates of revenues and expenditures which the director is required to submit to the governor.

The director shall determine a method to incorporate the principles of zero-based budgeting into the forms prescribed in this section.

Sec. 126.21.  (A) The director of budget and management shall do all of the following:

(1) Keep all necessary accounting records;

(2) Prescribe and maintain the accounting system of the state and establish appropriate accounting procedures and charts of accounts;

(3) Establish procedures for the use of written, electronic, optical, or other communications media for approving and reviewing payment vouchers;

(4) Reconcile, in the case of any variation between the amount of any appropriation and the aggregate amount of items of the appropriation, with the advice and assistance of the state agency affected by it and the legislative budget office of the legislative service commission, totals so as to correspond in the aggregate with the total appropriation. In the case of a conflict between the item and the total of which it is a part, the item shall be considered the intended appropriation.

(5) Evaluate on an ongoing basis and, if necessary, recommend improvements to the internal controls used in state agencies;

(6) Authorize the establishment of petty cash accounts. The director may withdraw approval for any petty cash account and require the officer in charge to return to the state treasury any unexpended balance shown by the officer's accounts to be on hand. Any officer who is issued a warrant for petty cash shall render a detailed account of the expenditures of the petty cash and shall report when requested the balance of petty cash on hand at any time.

(7) Process orders, invoices, vouchers, claims, and payrolls and prepare financial reports and statements;

(8) Perform extensions, reviews, and compliance checks prior to or after approving a payment as the director considers necessary;

(9) Issue the official comprehensive annual financial report of the state. The report shall cover all funds of the state reporting entity and shall include basic financial statements and required supplementary information prepared in accordance with generally accepted accounting principles and other information as the director provides. All state agencies, authorities, institutions, offices, retirement systems, and other component units of the state reporting entity as determined by the director shall furnish the director whatever financial statements and other information the director requests for the report, in the form, at the times, covering the periods, and with the attestation the director prescribes. The information for state institutions of higher education, as defined in section 3345.011 of the Revised Code, shall be submitted to the chancellor by the Ohio board of regents. The board shall establish a due date by which each such institution shall submit the information to the board, but no such date shall be later than one hundred twenty days after the end of the state fiscal year unless a later date is approved by the director.

(B) In addition to the director's duties under division (A) of this section, the director may establish and administer one or more state payment card programs that permit or require state agencies to use a payment card to purchase equipment, materials, supplies, or services in accordance with guidelines issued by the director. The chief administrative officer of a state agency that uses a payment card for such purposes shall ensure that purchases made with the card are made in accordance with the guidelines issued by the director and do not exceed the unexpended, unencumbered, unobligated balance in the appropriation to be charged for the purchase. State agencies may participate in only those state payment card programs that the director establishes pursuant to this section.

(C) In addition to the director's duties under divisions (A) and (B) of this section, the director may enter into any contract or agreement necessary for and incidental to the performance of the director's duties or the duties of the office of budget and management.

Sec. 3333.04.  The chancellor of the Ohio board of regents shall:

(A) Make studies of state policy in the field of higher education and formulate a master plan for higher education for the state, considering the needs of the people, the needs of the state, and the role of individual public and private institutions within the state in fulfilling these needs;

(B)(1) Report annually to the governor and the general assembly on the findings from the chancellor's studies and the master plan for higher education for the state;

(2) Report at least semiannually to the general assembly and the governor the enrollment numbers at each state-assisted institution of higher education.

(C) Approve or disapprove the establishment of new branches or academic centers of state colleges and universities;

(D) Approve or disapprove the establishment of state technical colleges or any other state institution of higher education;

(E) Recommend the nature of the programs, undergraduate, graduate, professional, state-financed research, and public services which should be offered by the state colleges, universities, and other state-assisted institutions of higher education in order to utilize to the best advantage their facilities and personnel;

(F) Recommend to the state colleges, universities, and other state-assisted institutions of higher education graduate or professional programs, including, but not limited to, doctor of philosophy, doctor of education, and juris doctor programs, that could be eliminated because they constitute unnecessary duplication, as shall be determined using the process developed pursuant to this division, or for other good and sufficient cause. Prior to recommending a program for elimination, the chancellor shall request the board of regents to hold at least one public hearing on the matter and advise the chancellor on whether the program should be recommended for elimination. The board shall provide notice of each hearing within a reasonable amount of time prior to its scheduled date. Following the hearing, the board shall issue a recommendation to the chancellor. The chancellor shall consider the board's recommendation but shall not be required to accept it.

For purposes of determining the amounts of any state instructional subsidies paid to state colleges, universities, and other state-assisted institutions of higher education, the chancellor may exclude students enrolled in any program that the chancellor has recommended for elimination pursuant to this division except that the chancellor shall not exclude any such student who enrolled in the program prior to the date on which the chancellor initially commences to exclude students under this division.

The chancellor and state colleges, universities, and other state-assisted institutions of higher education shall jointly develop a process for determining which existing graduate or professional programs constitute unnecessary duplication.

(G) Recommend to the state colleges, universities, and other state-assisted institutions of higher education programs which should be added to their present programs;

(H) Conduct studies for the state colleges, universities, and other state-assisted institutions of higher education to assist them in making the best and most efficient use of their existing facilities and personnel;

(I) Make recommendations to the governor and general assembly concerning the development of state-financed capital plans for higher education; the establishment of new state colleges, universities, and other state-assisted institutions of higher education; and the establishment of new programs at the existing state colleges, universities, and other institutions of higher education;

(J) Review the appropriation requests of the public community colleges and the state colleges and universities and submit to the office of budget and management and to the chairpersons of the finance committees of the house of representatives and of the senate the chancellor's recommendations in regard to the biennial higher education appropriation for the state, including appropriations for the individual state colleges and universities and public community colleges. For the purpose of determining the amounts of instructional subsidies to be paid to state-assisted colleges and universities, the chancellor shall define "full-time equivalent student" by program per academic year. The definition may take into account the establishment of minimum enrollment levels in technical education programs below which support allowances will not be paid. Except as otherwise provided in this section, the chancellor shall make no change in the definition of "full-time equivalent student" in effect on November 15, 1981, which would increase or decrease the number of subsidy-eligible full-time equivalent students, without first submitting a fiscal impact statement to the president of the senate, the speaker of the house of representatives, legislative budget office of the legislative service commission, and the director of budget and management. The chancellor shall work in close cooperation with the director of budget and management in this respect and in all other matters concerning the expenditures of appropriated funds by state colleges, universities, and other institutions of higher education.

(K) Seek the cooperation and advice of the officers and trustees of both public and private colleges, universities, and other institutions of higher education in the state in performing the chancellor's duties and making the chancellor's plans, studies, and recommendations;

(L) Appoint advisory committees consisting of persons associated with public or private secondary schools, members of the state board of education, or personnel of the state department of education;

(M) Appoint advisory committees consisting of college and university personnel, or other persons knowledgeable in the field of higher education, or both, in order to obtain their advice and assistance in defining and suggesting solutions for the problems and needs of higher education in this state;

(N) Approve or disapprove all new degrees and new degree programs at all state colleges, universities, and other state-assisted institutions of higher education;

(O) Adopt such rules as are necessary to carry out the chancellor's duties and responsibilities. The rules shall prescribe procedures for the chancellor to follow when taking actions associated with the chancellor's duties and responsibilities and shall indicate which types of actions are subject to those procedures. The procedures adopted under this division shall be in addition to any other procedures prescribed by law for such actions. However, if any other provision of the Revised Code or rule adopted by the chancellor prescribes different procedures for such an action, the procedures adopted under this division shall not apply to that action to the extent they conflict with the procedures otherwise prescribed by law. The procedures adopted under this division shall include at least the following:

(1) Provision for public notice of the proposed action;

(2) An opportunity for public comment on the proposed action, which may include a public hearing on the action by the board of regents;

(3) Methods for parties that may be affected by the proposed action to submit comments during the public comment period;

(4) Submission of recommendations from the board of regents regarding the proposed action, at the request of the chancellor;

(5) Written publication of the final action taken by the chancellor and the chancellor's rationale for the action;

(6) A timeline for the process described in divisions (O)(1) to (5) of this section.

(P) Establish and submit to the governor and the general assembly a clear and measurable set of goals and timetables for their achievement for each program under the chancellor's supervision that is designed to accomplish any of the following:

(1) Increased access to higher education;

(2) Job training;

(3) Adult literacy;

(4) Research;

(5) Excellence in higher education;

(6) Reduction in the number of graduate programs within the same subject area.

In July of each odd-numbered year, the chancellor shall submit to the governor and the general assembly a report on progress made toward these goals.

(Q) Make recommendations to the governor and the general assembly regarding the design and funding of the student financial aid programs specified in sections 3333.12, 3333.122, 3333.21 to 3333.27, and 5910.02 of the Revised Code;

(R) Participate in education-related state or federal programs on behalf of the state and assume responsibility for the administration of such programs in accordance with applicable state or federal law;

(S) Adopt rules for student financial aid programs as required by sections 3333.12, 3333.122, 3333.21 to 3333.27, 3333.28, and 5910.02 of the Revised Code, and perform any other administrative functions assigned to the chancellor by those sections;

(T) Conduct enrollment audits of state-supported institutions of higher education;

(U) Appoint consortia of college and university personnel to advise or participate in the development and operation of statewide collaborative efforts, including the Ohio supercomputer center, the Ohio academic resources network, OhioLink, and the Ohio learning network. For each consortium, the chancellor shall designate a college or university to serve as that consortium's fiscal agent, financial officer, and employer. Any funds appropriated for the consortia shall be distributed to the fiscal agents for the operation of the consortia. A consortium shall follow the rules of the college or university that serves as its fiscal agent. The chancellor may restructure existing consortia, appointed under this division, in accordance with procedures adopted under divisions (D)(1) to (6) of this section.

(V) Adopt rules establishing advisory duties and responsibilities of the board of regents not otherwise prescribed by law;

(W) Respond to requests for information about higher education from members of the general assembly and direct staff to conduct research or analysis as needed for this purpose.

Sec. 3333.12.  (A) As used in this section:

(1) "Eligible student" means an undergraduate student who is:

(a) An Ohio resident enrolled in an undergraduate program before the 2006-2007 academic year;

(b) Enrolled in either of the following:

(i) An accredited institution of higher education in this state that meets the requirements of Title VI of the Civil Rights Act of 1964 and is state-assisted, is nonprofit and has a certificate of authorization pursuant to Chapter 1713. of the Revised Code, has a certificate of registration from the state board of career colleges and schools and program authorization to award an associate or bachelor's degree, or is a private institution exempt from regulation under Chapter 3332. of the Revised Code as prescribed in section 3333.046 of the Revised Code. Students who attend an institution that holds a certificate of registration shall be enrolled in a program leading to an associate or bachelor's degree for which associate or bachelor's degree program the institution has program authorization issued under section 3332.05 of the Revised Code.

(ii) A technical education program of at least two years duration sponsored by a private institution of higher education in this state that meets the requirements of Title VI of the Civil Rights Act of 1964.

(c) Enrolled as a full-time student or enrolled as a less than full-time student for the term expected to be the student's final term of enrollment and is enrolled for the number of credit hours necessary to complete the requirements of the program in which the student is enrolled.

(2) "Gross income" includes all taxable and nontaxable income of the parents, the student, and the student's spouse, except income derived from an Ohio academic scholarship, income earned by the student between the last day of the spring term and the first day of the fall term, and other income exclusions designated by the chancellor of the Ohio board of regents. Gross income may be verified to the chancellor by the institution in which the student is enrolled using the federal financial aid eligibility verification process or by other means satisfactory to the chancellor.

(3) "Resident," "full-time student," "dependent," "financially independent," and "accredited" shall be defined by rules adopted by the chancellor.

(B) The chancellor shall establish and administer an instructional grant program and may adopt rules to carry out this section. The general assembly shall support the instructional grant program by such sums and in such manner as it may provide, but the chancellor may also receive funds from other sources to support the program. If the amounts available for support of the program are inadequate to provide grants to all eligible students, preference in the payment of grants shall be given in terms of income, beginning with the lowest income category of gross income and proceeding upward by category to the highest gross income category.

An instructional grant shall be paid to an eligible student through the institution in which the student is enrolled, except that no instructional grant shall be paid to any person serving a term of imprisonment. Applications for such grants shall be made as prescribed by the chancellor, and such applications may be made in conjunction with and upon the basis of information provided in conjunction with student assistance programs funded by agencies of the United States government or from financial resources of the institution of higher education. The institution shall certify that the student applicant meets the requirements set forth in divisions (A)(1)(b) and (c) of this section. Instructional grants shall be provided to an eligible student only as long as the student is making appropriate progress toward a nursing diploma or an associate or bachelor's degree. No student shall be eligible to receive a grant for more than ten semesters, fifteen quarters, or the equivalent of five academic years. A grant made to an eligible student on the basis of less than full-time enrollment shall be based on the number of credit hours for which the student is enrolled and shall be computed in accordance with a formula adopted by the chancellor. No student shall receive more than one grant on the basis of less than full-time enrollment.

An instructional grant shall not exceed the total instructional and general charges of the institution.

(C) The tables in this division prescribe the maximum grant amounts covering two semesters, three quarters, or a comparable portion of one academic year. Grant amounts for additional terms in the same academic year shall be determined under division (D) of this section.

For a full-time student who is a dependent and enrolled in a nonprofit educational institution that is not a state-assisted institution and that has a certificate of authorization issued pursuant to Chapter 1713. of the Revised Code, the amount of the instructional grant for two semesters, three quarters, or a comparable portion of the academic year shall be determined in accordance with the following table:

For a full-time student who is financially independent and enrolled in a nonprofit educational institution that is not a state-assisted institution and that has a certificate of authorization issued pursuant to Chapter 1713. of the Revised Code, the amount of the instructional grant for two semesters, three quarters, or a comparable portion of the academic year shall be determined in accordance with the following table:

For a full-time student who is a dependent and enrolled in an educational institution that holds a certificate of registration from the state board of career colleges and schools or a private institution exempt from regulation under Chapter 3332. of the Revised Code as prescribed in section 3333.046 of the Revised Code, the amount of the instructional grant for two semesters, three quarters, or a comparable portion of the academic year shall be determined in accordance with the following table:

For a full-time student who is financially independent and enrolled in an educational institution that holds a certificate of registration from the state board of career colleges and schools or a private institution exempt from regulation under Chapter 3332. of the Revised Code as prescribed in section 3333.046 of the Revised Code, the amount of the instructional grant for two semesters, three quarters, or a comparable portion of the academic year shall be determined in accordance with the following table:

For a full-time student who is a dependent and enrolled in a state-assisted educational institution, the amount of the instructional grant for two semesters, three quarters, or a comparable portion of the academic year shall be determined in accordance with the following table:

For a full-time student who is financially independent and enrolled in a state-assisted educational institution, the amount of the instructional grant for two semesters, three quarters, or a comparable portion of the academic year shall be determined in accordance with the following table:

(D) For a full-time student enrolled in an eligible institution for a semester or quarter in addition to the portion of the academic year covered by a grant determined under division (C) of this section, the maximum grant amount shall be a percentage of the maximum prescribed in the applicable table of that division. The maximum grant for a fourth quarter shall be one-third of the maximum amount prescribed under that division. The maximum grant for a third semester shall be one-half of the maximum amount prescribed under that division.

(E) No grant shall be made to any student in a course of study in theology, religion, or other field of preparation for a religious profession unless such course of study leads to an accredited bachelor of arts, bachelor of science, associate of arts, or associate of science degree.

(F)(1) Except as provided in division (F)(2) of this section, no grant shall be made to any student for enrollment during a fiscal year in an institution with a cohort default rate determined by the United States secretary of education pursuant to the "Higher Education Amendments of 1986," 100 Stat. 1278, 1408, 20 U.S.C.A. 1085, as amended, as of the fifteenth day of June preceding the fiscal year, equal to or greater than thirty per cent for each of the preceding two fiscal years.

(2) Division (F)(1) of this section does not apply to the following:

(a) Any student enrolled in an institution that under the federal law appeals its loss of eligibility for federal financial aid and the United States secretary of education determines its cohort default rate after recalculation is lower than the rate specified in division (F)(1) of this section or the secretary determines due to mitigating circumstances the institution may continue to participate in federal financial aid programs. The chancellor shall adopt rules requiring institutions to provide information regarding an appeal to the chancellor.

(b) Any student who has previously received a grant under this section who meets all other requirements of this section.

(3) The chancellor shall adopt rules for the notification of all institutions whose students will be ineligible to participate in the grant program pursuant to division (F)(1) of this section.

(4) A student's attendance at an institution whose students lose eligibility for grants under division (F)(1) of this section shall not affect that student's eligibility to receive a grant when enrolled in another institution.

(G) Institutions of higher education that enroll students receiving instructional grants under this section shall report to the chancellor all students who have received instructional grants but are no longer eligible for all or part of such grants and shall refund any moneys due the state within thirty days after the beginning of the quarter or term immediately following the quarter or term in which the student was no longer eligible to receive all or part of the student's grant. There shall be an interest charge of one per cent per month on all moneys due and payable after such thirty-day period. The chancellor shall immediately notify the office of budget and management and legislative budget office of the legislative service commission of all refunds so received.

Sec. 3333.122.  (A) As used in this section:

(1) "Eligible student" means a student who is:

(a) An Ohio resident who first enrolls in an undergraduate program in the 2006-2007 academic year or thereafter;

(b) If the student first enrolled in an undergraduate program in the 2006-2007 or 2007-2008 academic year, the student is enrolled in one of the following:

(i) An accredited institution of higher education in this state that meets the requirements of Title VI of the Civil Rights Act of 1964 and is state-assisted, is nonprofit and has a certificate of authorization pursuant to Chapter 1713. of the Revised Code, has a certificate of registration from the state board of career colleges and schools and program authorization to award an associate or bachelor's degree, or is a private institution exempt from regulation under Chapter 3332. of the Revised Code as prescribed in section 3333.046 of the Revised Code. Students who attend an institution that holds a certificate of registration shall be enrolled in a program leading to an associate or bachelor's degree for which associate or bachelor's degree program the institution has program authorization issued under section 3332.05 of the Revised Code.

(ii) A technical education program of at least two years duration sponsored by a private institution of higher education in this state that meets the requirements of Title VI of the Civil Rights Act of 1964;

(iii) A nursing diploma program approved by the board of nursing under division (A)(5) of section 4723.06 of the Revised Code and that meets the requirements of Title VI of the Civil Rights Act of 1964.

(c) If the student first enrolled in an undergraduate program after the 2007-2008 academic year, the student is enrolled in one of the following:

(i) An accredited institution of higher education in this state that meets the requirements of Title VI of the Civil Rights Act of 1964 and is state-assisted, is nonprofit and has a certificate of authorization pursuant to Chapter 1713. of the Revised Code, or is a private institution exempt from regulation under Chapter 3332. of the Revised Code as prescribed in section 3333.046 of the Revised Code;

(ii) An education program of at least two years duration sponsored by a private institution of higher education in this state that meets the requirements of Title VI of the Civil Rights Act of 1964 and has a certificate of authorization pursuant to Chapter 1713. of the Revised Code;

(iii) A nursing diploma program approved by the board of nursing under division (A)(5) of section 4723.06 of the Revised Code and that meets the requirements of Title VI of the Civil Rights Act of 1964.

(2) A student who participated in either the early college high school program administered by the department of education or in the post-secondary enrollment options program pursuant to Chapter 3365. of the Revised Code before the 2006-2007 academic year shall not be excluded from eligibility for a needs-based financial aid grant under this section.

(3) "Resident," "expected family contribution" or "EFC," "full-time student," "three-quarters-time student," "half-time student," "one-quarter-time student," and "accredited" shall be defined by rules adopted by the chancellor of the Ohio board of regents.

(B) The chancellor shall establish and administer a needs-based financial aid program based on the United States department of education's method of determining financial need and may adopt rules to carry out this section. The program shall be known as the Ohio college opportunity grant program. The general assembly shall support the needs-based financial aid program by such sums and in such manner as it may provide, but the chancellor may also receive funds from other sources to support the program. If the amounts available for support of the program are inadequate to provide grants to all eligible students, preference in the payment of grants shall be given in terms of expected family contribution, beginning with the lowest expected family contribution category and proceeding upward by category to the highest expected family contribution category.

A needs-based financial aid grant shall be paid to an eligible student through the institution in which the student is enrolled, except that no needs-based financial aid grant shall be paid to any person serving a term of imprisonment. Applications for such grants shall be made as prescribed by the chancellor, and such applications may be made in conjunction with and upon the basis of information provided in conjunction with student assistance programs funded by agencies of the United States government or from financial resources of the institution of higher education. The institution shall certify that the student applicant meets the requirements set forth in divisions (A)(1)(a) and (b) of this section. Needs-based financial aid grants shall be provided to an eligible student only as long as the student is making appropriate progress toward a nursing diploma or an associate or bachelor's degree. No student shall be eligible to receive a grant for more than ten semesters, fifteen quarters, or the equivalent of five academic years. A grant made to an eligible student on the basis of less than full-time enrollment shall be based on the number of credit hours for which the student is enrolled and shall be computed in accordance with a formula adopted by the chancellor. No student shall receive more than one grant on the basis of less than full-time enrollment.

A needs-based financial aid grant shall not exceed the total instructional and general charges of the institution.

(C) The tables in this division prescribe the maximum grant amounts covering two semesters, three quarters, or a comparable portion of one academic year. Grant amounts for additional terms in the same academic year shall be determined under division (D) of this section.

As used in the tables in division (C) of this section:

(1) "Private institution" means an institution that is nonprofit and has a certificate of authorization pursuant to Chapter 1713. of the Revised Code.

(2) "Career college" means either an institution that holds a certificate of registration from the state board of career colleges and schools or a private institution exempt from regulation under Chapter 3332. of the Revised Code as prescribed in section 3333.046 of the Revised Code.

Full-time students shall be eligible to receive awards according to the following table:

Three-quarters-time students shall be eligible to receive awards according to the following table:

Half-time students shall be eligible to receive awards according to the following table:

One-quarter-time students shall be eligible to receive awards according to the following table:

(D) For a full-time student enrolled in an eligible institution for a semester or quarter in addition to the portion of the academic year covered by a grant determined under division (C) of this section, the maximum grant amount shall be a percentage of the maximum prescribed in the applicable table of that division. The maximum grant for a fourth quarter shall be one-third of the maximum amount prescribed under that division. The maximum grant for a third semester shall be one-half of the maximum amount prescribed under that division.

(E) No grant shall be made to any student in a course of study in theology, religion, or other field of preparation for a religious profession unless such course of study leads to an accredited bachelor of arts, bachelor of science, associate of arts, or associate of science degree.

(F)(1) Except as provided in division (F)(2) of this section, no grant shall be made to any student for enrollment during a fiscal year in an institution with a cohort default rate determined by the United States secretary of education pursuant to the "Higher Education Amendments of 1986," 100 Stat. 1278, 1408, 20 U.S.C.A. 1085, as amended, as of the fifteenth day of June preceding the fiscal year, equal to or greater than thirty per cent for each of the preceding two fiscal years.

(2) Division (F)(1) of this section does not apply to the following:

(a) Any student enrolled in an institution that under the federal law appeals its loss of eligibility for federal financial aid and the United States secretary of education determines its cohort default rate after recalculation is lower than the rate specified in division (F)(1) of this section or the secretary determines due to mitigating circumstances the institution may continue to participate in federal financial aid programs. The chancellor shall adopt rules requiring institutions to provide information regarding an appeal to the chancellor.

(b) Any student who has previously received a grant under this section who meets all other requirements of this section.

(3) The chancellor shall adopt rules for the notification of all institutions whose students will be ineligible to participate in the grant program pursuant to division (F)(1) of this section.

(4) A student's attendance at an institution whose students lose eligibility for grants under division (F)(1) of this section shall not affect that student's eligibility to receive a grant when enrolled in another institution.

(G) Institutions of higher education that enroll students receiving needs-based financial aid grants under this section shall report to the chancellor all students who have received needs-based financial aid grants but are no longer eligible for all or part of such grants and shall refund any moneys due the state within thirty days after the beginning of the quarter or term immediately following the quarter or term in which the student was no longer eligible to receive all or part of the student's grant. There shall be an interest charge of one per cent per month on all moneys due and payable after such thirty-day period. The chancellor shall immediately notify the office of budget and management and the legislative budget office of the legislative service commission of all refunds so received.

Sec. 3333.27.  As used in this section:

(A) "Eligible institution" means a nonprofit Ohio institution of higher education that holds a certificate of authorization issued under section 1713.02 of the Revised Code and meets the requirements of Title VI of the Civil Rights Act of 1964.

(B) "Resident" and "full-time student" have the meanings established for purposes of this section by rule of the chancellor of the Ohio board of regents.

The chancellor shall establish and administer a student choice grant program and shall adopt rules for the administration of the program.

The chancellor may make a grant to any resident of this state who is enrolled as a full-time student in a bachelor's degree program at an eligible institution and maintains an academic record that meets or exceeds the standard established pursuant to this section by rule of the chancellor, except that no grant shall be made to any individual who was enrolled as a student in an institution of higher education on or before July 1, 1984, or is serving a term of imprisonment. The grant shall not exceed the lesser of the total instructional and general charges of the institution in which the student is enrolled, or an amount equal to one-fourth of the total of any state instructional subsidy amount distributed by the chancellor in the second fiscal year of the preceding biennium for all full-time students enrolled in bachelor's degree programs at four-year state-assisted institutions of higher education divided by the sum of the actual number of full-time students enrolled in bachelor's degree programs at four-year state-assisted institutions of higher education reported to the chancellor for such year by the institutions to which the subsidy was distributed.

The chancellor shall prescribe the form and manner of application for grants including the manner of certification by eligible institutions that each applicant from such institution is enrolled in a bachelor's degree program as a full-time student and has an academic record that meets or exceeds the standard established by the chancellor.

A grant awarded to an eligible student shall be paid to the institution in which the student is enrolled, and the institution shall reduce the student's instructional and general charges by the amount of the grant. Each grant awarded shall be prorated and paid in equal installments at the time of enrollment for each term of the academic year for which the grant is awarded. No student shall be eligible to receive a grant for more than ten semesters, fifteen quarters, or the equivalent of five academic years.

The receipt of an Ohio student choice grant shall not affect a student's eligibility for assistance, or the amount of such assistance, granted under section 3315.33, 3333.12, 3333.122, 3333.22, 3333.26, 5910.03, 5910.032, or 5919.34 of the Revised Code. If a student receives assistance under one or more of such sections, the student choice grant made to the student shall not exceed the difference between the amount of assistance received under such sections and the total instructional and general charges of the institution in which the student is enrolled.

The general assembly shall support the student choice grant program by such sums and in such manner as it may provide, but the chancellor may also receive funds from other sources to support the program.

No grant shall be made to any student enrolled in a course of study leading to a degree in theology, religion, or other field of preparation for a religious profession unless the course of study leads to an accredited bachelor of arts or bachelor of science degree.

Institutions of higher education that enroll students receiving grants under this section shall report to the chancellor the name of each student who has received such a grant but who is no longer eligible for all or part of such grant and shall refund all moneys due to the state within thirty days after the beginning of the term immediately following the term in which the student was no longer eligible to receive all or part of the grant. There shall be an interest charge of one per cent per month on all moneys due and payable after such thirty-day period. The chancellor shall immediately notify the office of budget and management and the legislative budget office of the legislative service commission of all refunds received.

Sec. 3769.08.  (A) Any person holding a permit to conduct a horse-racing meeting may provide a place in the race meeting grounds or enclosure at which the permit holder may conduct and supervise the pari-mutuel system of wagering by patrons of legal age on the live racing programs and simulcast racing programs conducted by the permit holder.

The pari-mutuel method of wagering upon the live racing programs and simulcast racing programs held at or conducted within such race track, and at the time of such horse-racing meeting, or at other times authorized by the state racing commission, shall not be unlawful. No other place, except that provided and designated by the permit holder and except as provided in section 3769.26 of the Revised Code, nor any other method or system of betting or wagering, except the pari-mutuel system, shall be used or permitted by the permit holder; nor, except as provided in section 3769.089 or 3769.26 of the Revised Code, shall the pari-mutuel system of wagering be conducted by the permit holder on any races except the races at the race track, grounds, or enclosure for which the person holds a permit. Each permit holder may retain as a commission an amount not to exceed eighteen per cent of the total of all moneys wagered.

The pari-mutuel wagering authorized by this section is subject to sections 3769.25 to 3769.28 of the Revised Code.

(B) At the close of each racing day, each permit holder authorized to conduct thoroughbred racing, out of the amount retained on that day by the permit holder, shall pay by check, draft, or money order to the tax commissioner, as a tax, a sum equal to the following percentages of the total of all moneys wagered on live racing programs on that day and shall separately compute and pay by check, draft, or money order to the tax commissioner, as a tax, a sum equal to the following percentages of the total of all money wagered on simulcast racing programs on that day:

(1) One per cent of the first two hundred thousand dollars wagered, or any part of that amount;

(2) Two per cent of the next one hundred thousand dollars wagered, or any part of that amount;

(3) Three per cent of the next one hundred thousand dollars wagered, or any part of that amount;

(4) Four per cent of all sums over four hundred thousand dollars wagered.

Except as otherwise provided in section 3769.089 of the Revised Code, each permit holder authorized to conduct thoroughbred racing shall use for purse money a sum equal to fifty per cent of the pari-mutuel revenues retained by the permit holder as a commission after payment of the state tax. This fifty per cent payment shall be in addition to the purse distribution from breakage specified in this section.

Subject to division (M) of this section, from the moneys paid to the tax commissioner by thoroughbred racing permit holders, one-half of one per cent of the total of all moneys so wagered on a racing day shall be paid into the Ohio fairs fund created by section 3769.082 of the Revised Code, one and one-eighth per cent of the total of all moneys so wagered on a racing day shall be paid into the Ohio thoroughbred race fund created by section 3769.083 of the Revised Code, and one-quarter of one per cent of the total of all moneys wagered on a racing day by each permit holder shall be paid into the state racing commission operating fund created by section 3769.03 of the Revised Code. The required payment to the state racing commission operating fund does not apply to county and independent fairs and agricultural societies. The remaining moneys may be retained by the permit holder, except as provided in this section with respect to the odd cents redistribution. Amounts paid into the PASSPORT fund shall be used solely for the support of the PASSPORT program as determined in appropriations made by the general assembly. If the PASSPORT program is abolished, the amount that would have been paid to the PASSPORT fund under this chapter shall be paid to the general revenue fund of the state. As used in this chapter, "PASSPORT program" means the PASSPORT program created under section 173.40 of the Revised Code.

The total amount paid to the Ohio thoroughbred race fund under this section and division (A) of section 3769.087 of the Revised Code shall not exceed by more than six per cent the total amount paid to this fund under this section and that section during the immediately preceding calendar year.

Each year, the total amount calculated for payment into the Ohio fairs fund under this division, division (C) of this section, and division (A) of section 3769.087 of the Revised Code shall be an amount calculated using the percentages specified in this division, division (C) of this section, and division (A) of section 3769.087 of the Revised Code.

A permit holder may contract with a thoroughbred horsemen's organization for the organization to act as a representative of all thoroughbred owners and trainers participating in a horse-racing meeting conducted by the permit holder. A "thoroughbred horsemen's organization" is any corporation or association that represents, through membership or otherwise, more than one-half of the aggregate of all thoroughbred owners and trainers who were licensed and actively participated in racing within this state during the preceding calendar year. Except as otherwise provided in this paragraph, any moneys received by a thoroughbred horsemen's organization shall be used exclusively for the benefit of thoroughbred owners and trainers racing in this state through the administrative purposes of the organization, benevolent activities on behalf of the horsemen, promotion of the horsemen's rights and interests, and promotion of equine research. A thoroughbred horsemen's organization may expend not more than an aggregate of five per cent of its annual gross receipts, or a larger amount as approved by the organization, for dues, assessments, and other payments to all other local, national, or international organizations having as their primary purposes the promotion of thoroughbred horse racing, thoroughbred horsemen's rights, and equine research.

(C) Except as otherwise provided in division (B) of this section, at the close of each racing day, each permit holder authorized to conduct harness or quarter horse racing, out of the amount retained that day by the permit holder, shall pay by check, draft, or money order to the tax commissioner, as a tax, a sum equal to the following percentages of the total of all moneys wagered on live racing programs and shall separately compute and pay by check, draft, or money order to the tax commissioner, as a tax, a sum equal to the following percentages of the total of all money wagered on simulcast racing programs on that day:

(1) One per cent of the first two hundred thousand dollars wagered, or any part of that amount;

(2) Two per cent of the next one hundred thousand dollars wagered, or any part of that amount;

(3) Three per cent of the next one hundred thousand dollars wagered, or any part of that amount;

(4) Four per cent of all sums over four hundred thousand dollars wagered.

Except as otherwise provided in division (B) and subject to division (M) of this section, from the moneys paid to the tax commissioner by permit holders authorized to conduct harness or quarter horse racing, one-half of one per cent of all moneys wagered on that racing day shall be paid into the Ohio fairs fund; from the moneys paid to the tax commissioner by permit holders authorized to conduct harness racing, five-eighths of one per cent of all moneys wagered on that racing day shall be paid into the Ohio standardbred development fund; and from the moneys paid to the tax commissioner by permit holders authorized to conduct quarter horse racing, five-eighths of one per cent of all moneys wagered on that racing day shall be paid into the Ohio quarter horse development fund.

(D) In addition, subject to division (M) of this section, beginning on January 1, 1996, from the money paid to the tax commissioner as a tax under this section and division (A) of section 3769.087 of the Revised Code by harness horse permit holders, one-half of one per cent of the amount wagered on a racing day shall be paid into the Ohio standardbred development fund. Beginning January 1, 1998, the payment to the Ohio standardbred development fund required under this division does not apply to county agricultural societies or independent agricultural societies.

The total amount paid to the Ohio standardbred development fund under this division, division (C) of this section, and division (A) of section 3769.087 of the Revised Code and the total amount paid to the Ohio quarter horse development fund under this division and division (A) of that section shall not exceed by more than six per cent the total amount paid into the fund under this division, division (C) of this section, and division (A) of section 3769.087 of the Revised Code in the immediately preceding calendar year.

(E) Subject to division (M) of this section, from the money paid as a tax under this chapter by harness and quarter horse permit holders, one-quarter of one per cent of the total of all moneys wagered on a racing day by each permit holder shall be paid into the state racing commission operating fund created by section 3769.03 of the Revised Code. This division does not apply to county and independent fairs and agricultural societies.

(F) Except as otherwise provided in section 3769.089 of the Revised Code, each permit holder authorized to conduct harness racing shall pay to the harness horsemen's purse pool a sum equal to fifty per cent of the pari-mutuel revenues retained by the permit holder as a commission after payment of the state tax. This fifty per cent payment is to be in addition to the purse distribution from breakage specified in this section.

(G) In addition, each permit holder authorized to conduct harness racing shall be allowed to retain the odd cents of all redistribution to be made on all mutual contributions exceeding a sum equal to the next lowest multiple of ten.

Forty per cent of that portion of that total sum of such odd cents shall be used by the permit holder for purse money for Ohio sired, bred, and owned colts, for purse money for Ohio bred horses, and for increased purse money for horse races. Upon the formation of the corporation described in section 3769.21 of the Revised Code to establish a harness horsemen's health and retirement fund, twenty-five per cent of that portion of that total sum of odd cents shall be paid at the close of each racing day by the permit holder to that corporation to establish and fund the health and retirement fund. Until that corporation is formed, that twenty-five per cent shall be paid at the close of each racing day by the permit holder to the tax commissioner or the tax commissioner's agent in the county seat of the county in which the permit holder operates race meetings. The remaining thirty-five per cent of that portion of that total sum of odd cents shall be retained by the permit holder.

(H) In addition, each permit holder authorized to conduct thoroughbred racing shall be allowed to retain the odd cents of all redistribution to be made on all mutuel contributions exceeding a sum equal to the next lowest multiple of ten. Twenty per cent of that portion of that total sum of such odd cents shall be used by the permit holder for increased purse money for horse races. Upon the formation of the corporation described in section 3769.21 of the Revised Code to establish a thoroughbred horsemen's health and retirement fund, forty-five per cent of that portion of that total sum of odd cents shall be paid at the close of each racing day by the permit holder to that corporation to establish and fund the health and retirement fund. Until that corporation is formed, that forty-five per cent shall be paid by the permit holder to the tax commissioner or the tax commissioner's agent in the county seat of the county in which the permit holder operates race meetings, at the close of each racing day. The remaining thirty-five per cent of that portion of that total sum of odd cents shall be retained by the permit holder.

(I) In addition, each permit holder authorized to conduct quarter horse racing shall be allowed to retain the odd cents of all redistribution to be made on all mutuel contributions exceeding a sum equal to the next lowest multiple of ten, subject to a tax of twenty-five per cent on that portion of the total sum of such odd cents that is in excess of two thousand dollars during a calendar year, which tax shall be paid at the close of each racing day by the permit holder to the tax commissioner or the tax commissioner's agent in the county seat of the county within which the permit holder operates race meetings. Forty per cent of that portion of that total sum of such odd cents shall be used by the permit holder for increased purse money for horse races. The remaining thirty-five per cent of that portion of that total sum of odd cents shall be retained by the permit holder.

(J)(1) To encourage the improvement of racing facilities for the benefit of the public, breeders, and horse owners, and to increase the revenue to the state from the increase in pari-mutuel wagering resulting from those improvements, the taxes paid by a permit holder to the state as provided for in this chapter shall be reduced by three-fourths of one per cent of the total amount wagered for those permit holders who make capital improvements to existing race tracks or construct new race tracks. The percentage of the reduction that may be taken each racing day shall equal seventy-five per cent of the taxes levied under divisions (B) and (C) of this section and section 3769.087 of the Revised Code, and division (F)(2) of section 3769.26 of the Revised Code, as applicable, divided by the calculated amount each fund should receive under divisions (B) and (C) of this section and section 3769.087 of the Revised Code, and division (F)(2) of section 3769.26 of the Revised Code and the reduction provided for in this division. If the resulting percentage is less than one, that percentage shall be multiplied by the amount of the reduction provided for in this division. Otherwise, the permit holder shall receive the full reduction provided for in this division. The amount of the allowable reduction not received shall be carried forward and applied against future tax liability. After any reductions expire, any reduction carried forward shall be treated as a reduction as provided for in this division.

If more than one permit holder is authorized to conduct racing at the facility that is being built or improved, the cost of the new race track or capital improvement shall be allocated between or among all the permit holders in the ratio that the permit holders' number of racing days bears to the total number of racing days conducted at the facility.

A reduction for a new race track or a capital improvement shall start from the day racing is first conducted following the date actual construction of the new race track or each capital improvement is completed and the construction cost has been approved by the racing commission, unless otherwise provided in this section. A reduction for a new race track or a capital improvement shall continue for a period of twenty-five years for new race tracks and for fifteen years for capital improvements if the construction of the capital improvement or new race track commenced prior to March 29, 1988, and for a period of ten years for new race tracks or capital improvements if the construction of the capital improvement or new race track commenced on or after March 29, 1988, but before the effective date of this amendment June 6, 2001, or until the total tax reduction reaches seventy per cent of the approved cost of the new race track or capital improvement, as allocated to each permit holder, whichever occurs first. A reduction for a new race track or a capital improvement approved after the effective date of this amendment June 6, 2001, shall continue until the total tax reduction reaches one hundred per cent of the approved cost of the new race track or capital improvement, as allocated to each permit holder.

A reduction granted for a new race track or a capital improvement, the application for which was approved by the racing commission after March 29, 1988, but before the effective date of this amendment June 6, 2001, shall not commence nor shall the ten-year period begin to run until all prior tax reductions with respect to the same race track have ended. The total tax reduction because of capital improvements shall not during any one year exceed for all permit holders using any one track three-fourths of one per cent of the total amount wagered, regardless of the number of capital improvements made. Several capital improvements to a race track may be consolidated in an application if the racing commission approved the application prior to March 29, 1988. No permit holder may receive a tax reduction for a capital improvement approved by the racing commission on or after March 29, 1988, at a race track until all tax reductions have ended for all prior capital improvements approved by the racing commission under this section or section 3769.20 of the Revised Code at that race track. If there are two or more permit holders operating meetings at the same track, they may consolidate their applications. The racing commission shall notify the tax commissioner when the reduction of tax begins and when it ends.

Each fiscal year the racing commission shall submit a report to the tax commissioner, the office of budget and management, and the legislative budget office of the legislative service commission. The report shall identify each capital improvement project undertaken under this division and in progress at each race track, indicate the total cost of each project, state the tax reduction that resulted from each project during the immediately preceding fiscal year, estimate the tax reduction that will result from each project during the current fiscal year, state the total tax reduction that resulted from all such projects at all race tracks during the immediately preceding fiscal year, and estimate the total tax reduction that will result from all such projects at all race tracks during the current fiscal year.

(2) In order to qualify for the reduction in tax, a permit holder shall apply to the racing commission in such form as the commission may require and shall provide full details of the new race track or capital improvement, including a schedule for its construction and completion, and set forth the costs and expenses incurred in connection with it. The racing commission shall not approve an application unless the permit holder shows that a contract for the new race track or capital improvement has been let under an unrestricted competitive bidding procedure, unless the contract is exempted by the controlling board because of its unusual nature. In determining whether to approve an application, the racing commission shall consider whether the new race track or capital improvement will promote the safety, convenience, and comfort of the racing public and horse owners and generally tend towards the improvement of racing in this state.

(3) If a new race track or capital improvement is approved by the racing commission and construction has started, the tax reduction may be authorized by the commission upon presentation of copies of paid bills in excess of one hundred thousand dollars or ten per cent of the approved cost, whichever is greater. After the initial authorization, the permit holder shall present copies of paid bills. If the permit holder is in substantial compliance with the schedule for construction and completion of the new race track or capital improvement, the racing commission may authorize the continuation of the tax reduction upon the presentation of the additional paid bills. The total amount of the tax reduction authorized shall not exceed the percentage of the approved cost of the new race track or capital improvement specified in division (J)(1) of this section. The racing commission may terminate any tax reduction immediately if a permit holder fails to complete the new race track or capital improvement, or to substantially comply with the schedule for construction and completion of the new race track or capital improvement. If a permit holder fails to complete a new race track or capital improvement, the racing commission shall order the permit holder to repay to the state the total amount of tax reduced. The normal tax paid by the permit holder shall be increased by three-fourths of one per cent of the total amount wagered until the total amount of the additional tax collected equals the total amount of tax reduced.

(4) As used in this section:

(a) "Capital improvement" means an addition, replacement, or remodeling of a structural unit of a race track facility costing at least one hundred thousand dollars, including, but not limited to, the construction of barns used exclusively for the race track facility, backstretch facilities for horsemen, paddock facilities, new pari-mutuel and totalizator equipment and appurtenances to that equipment purchased by the track, new access roads, new parking areas, the complete reconstruction, reshaping, and leveling of the racing surface and appurtenances, the installation of permanent new heating or air conditioning, roof replacement or restoration, installations of a permanent nature forming a part of the track structure, and construction of buildings that are located on a permit holder's premises. "Capital improvement" does not include the cost of replacement of equipment that is not permanently installed, ordinary repairs, painting, and maintenance required to keep a race track facility in ordinary operating condition.

(b) "New race track" includes the reconstruction of a race track damaged by fire or other cause that has been declared by the racing commission, as a result of the damage, to be an inadequate facility for the safe operation of horse racing.

(c) "Approved cost" includes all debt service and interest costs that are associated with a capital improvement or new race track and that the racing commission approves for a tax reduction under division (J) of this section.

(5) The racing commission shall not approve an application for a tax reduction under this section if it has reasonable cause to believe that the actions or negligence of the permit holder substantially contributed to the damage suffered by the track due to fire or other cause. The racing commission shall obtain any data or information available from a fire marshal, law enforcement official, or insurance company concerning any fire or other damage suffered by a track, prior to approving an application for a tax reduction.

(6) The approved cost to which a tax reduction applies shall be determined by generally accepted accounting principles and verified by an audit of the permit holder's records upon completion of the project by the racing commission, or by an independent certified public accountant selected by the permit holder and approved by the commission.

(K) No other license or excise tax or fee, except as provided in sections 3769.01 to 3769.14 of the Revised Code, shall be assessed or collected from such licensee by any county, township, district, municipal corporation, or other body having power to assess or collect a tax or fee. That portion of the tax paid under this section by permit holders for racing conducted at and during the course of an agricultural exposition or fair, and that portion of the tax that would have been paid by eligible permit holders into the PASSPORT fund as a result of racing conducted at and during the course of an agricultural exposition or fair, shall be deposited into the state treasury to the credit of the horse racing tax fund, which is hereby created for the use of the agricultural societies of the several counties in which the taxes originate. The state racing commission shall determine eligible permit holders for purposes of the preceding sentence, taking into account the breed of horse, the racing dates, the geographic proximity to the fair, and the best interests of Ohio racing. On the first day of any month on which there is money in the fund, the tax commissioner shall provide for payment to the treasurer of each agricultural society the amount of the taxes collected under this section upon racing conducted at and during the course of any exposition or fair conducted by the society.

(L) From the tax paid under this section by harness track permit holders, the tax commissioner shall pay into the Ohio thoroughbred race fund a sum equal to a percentage of the amount wagered upon which the tax is paid. The percentage shall be determined by the tax commissioner and shall be rounded to the nearest one-hundredth. The percentage shall be such that, when multiplied by the amount wagered upon which tax was paid by the harness track permit holders in the most recent year for which final figures are available, it results in a sum that substantially equals the same amount of tax paid by the tax commissioner during that year into the Ohio fairs fund from taxes paid by thoroughbred permit holders. This division does not apply to county and independent fairs and agricultural societies.

(M) Twenty-five per cent of the taxes levied on thoroughbred racing permit holders, harness racing permit holders, and quarter horse racing permit holders under this section, division (A) of section 3769.087 of the Revised Code, and division (F)(2) of section 3769.26 of the Revised Code shall be paid into the PASSPORT fund. The tax commissioner shall pay any money remaining, after the payment into the PASSPORT fund and the reductions provided for in division (J) of this section and in section 3769.20 of the Revised Code, into the Ohio fairs fund, Ohio thoroughbred race fund, Ohio standardbred development fund, Ohio quarter horse fund, and state racing commission operating fund as prescribed in this section and division (A) of section 3769.087 of the Revised Code. The tax commissioner shall thereafter use and apply the balance of the money paid as a tax by any permit holder to cover any shortage in the accounts of such funds resulting from an insufficient payment as a tax by any other permit holder. The moneys received by the tax commissioner shall be deposited weekly and paid by the tax commissioner into the funds to cover the total aggregate amount due from all permit holders to the funds, as calculated under this section and division (A) of section 3769.087 of the Revised Code, as applicable. If, after the payment into the PASSPORT fund, sufficient funds are not available from the tax deposited by the tax commissioner to pay the required amounts into the Ohio fairs fund, Ohio standardbred development fund, Ohio thoroughbred race fund, Ohio quarter horse fund, and the state racing commission operating fund, the tax commissioner shall prorate on a proportional basis the amount paid to each of the funds. Any shortage to the funds as a result of a proration shall be applied against future deposits for the same calendar year when funds are available. After this application, the tax commissioner shall pay any remaining money paid as a tax by all permit holders into the PASSPORT fund. This division does not apply to permit holders conducting racing at the course of an agricultural exposition or fair as described in division (K) of this section.

Sec. 3769.20.  (A) To encourage the renovation of existing racing facilities for the benefit of the public, breeders, and horse owners and to increase the revenue to the state from the increase in pari-mutuel wagering resulting from such improvement, the taxes paid by a permit holder to the state, in excess of the amount paid into the PASSPORT fund, shall be reduced by one per cent of the total amount wagered for those permit holders who carry out a major capital improvement project. The percentage of the reduction that may be taken each racing day shall equal seventy-five per cent of the amount of the taxes levied under divisions (B) and (C) of section 3769.08, section 3769.087, and division (F)(2) of section 3769.26 of the Revised Code, as applicable, divided by the calculated amount each fund should receive under divisions (B) and (C) of section 3769.08, section 3769.087, and division (F)(2) of section 3769.26 of the Revised Code and the reduction provided for in this section. If the resulting percentage is less than one, that percentage shall be multiplied by the amount of the reduction provided for in this section. Otherwise, the permit holder shall receive the full reduction provided for in this section. The amount of the allowable reduction not received shall be carried forward and added to any other reduction balance and applied against future tax liability. After any reductions expire, any reduction carried forward shall be treated as a reduction as provided for in this section. If the amount of allowable reduction exceeds the amount of taxes derived from a permit holder, the amount of the allowable reduction not used may be carried forward and applied against future tax liability.

If more than one permit holder is authorized to conduct racing at the facility that is being improved, the cost of the major capital improvement project shall be allocated between or among all the permit holders in the ratio that each permit holder's number of racing days bears to the total number of racing days conducted at the facility.

A reduction for a major capital improvement project shall start from the day racing is first conducted following the date on which the major capital improvement project is completed and the construction cost has been approved by the state racing commission, except as otherwise provided in division (E) of this section, and shall continue until the total tax reduction equals the cost of the major capital improvement project plus debt service applicable to the project. In no event, however, shall any tax reduction, excluding any reduction balances, be permitted under this section after December 31, 2014. The total tax reduction because of the major capital improvement project shall not during any one year exceed for all permit holders using any one track one per cent of the total amount wagered. The racing commission shall notify the tax commissioner when the reduction of tax begins and when it ends.

(B) Each fiscal year, the racing commission shall submit a report to the tax commissioner, the office of budget and management, and the legislative budget office of the legislative service commission. The report shall identify each capital improvement project undertaken under this section and in progress at each race track, indicate the total cost of each project, state the tax reduction that resulted from each project during the immediately preceding fiscal year, estimate the tax reduction that will result from each project during the current fiscal year, state the total tax reduction that resulted from all such projects at all race tracks during the immediately preceding fiscal year, and estimate the total tax reduction that will result from all such projects at all race tracks during the current fiscal year.

(C) The tax reduction granted pursuant to this section shall be in addition to any tax reductions for capital improvements and new race tracks provided for in section 3769.08 of the Revised Code and approved by the racing commission.

(D) In order to qualify for the reduction in tax, a permit holder shall apply to the racing commission in such form as the commission may require and shall provide full details of the major capital improvement project, including plans and specifications, a schedule for the project's construction and completion, and a breakdown of proposed costs. In addition, the permit holder shall have commenced construction of the major capital improvement project or shall have had the application for the project approved by the racing commission prior to March 29, 1988. The racing commission shall not approve an application unless the permit holder shows that a contract for the major capital improvement project has been let under an unrestricted competitive bidding procedure, unless the contract is exempted by the controlling board because of its unusual nature. In determining whether to approve an application, the racing commission shall consider whether the major capital improvement project will promote the safety, convenience, and comfort of the racing public and horse owners and generally tend toward the improvement of racing in this state.

(E) If the major capital improvement project is approved by the racing commission and construction has started, the tax reduction may be authorized by the commission upon presentation of copies of paid bills in excess of five hundred thousand dollars. After the initial authorization, the permit holder shall present copies of paid bills in the amount of not less than five hundred thousand dollars. If the permit holder is in substantial compliance with the schedule for construction and completion of the major capital improvement project, the racing commission may authorize the continuance of the tax reduction upon the presentation of the additional paid bills in increments of five hundred thousand dollars. The racing commission may terminate the tax reduction if a permit holder fails to complete the major capital improvement project or fails to comply substantially with the schedule for construction and completion of the major capital improvement project. If the time for completion of the major capital improvement project is delayed by acts of God, strikes, or the unavailability of labor or materials, the time for completion as set forth in the schedule shall be extended by the period of the delay. If a permit holder fails to complete the major capital improvement project, the racing commission shall order the permit holder to repay to the state the total amount of tax reduced, unless the permit holder has spent at least six million dollars on the project. The normal tax paid by the permit holder under section 3769.08 of the Revised Code shall be increased by one per cent of the total amount wagered until the total amount of the additional tax collected equals the total amount of tax reduced. Any action taken by the racing commission pursuant to this section in terminating the tax adjustment or requiring repayment of the amount of tax reduced shall be subject to Chapter 119. of the Revised Code.

(F) As used in this section, "major capital improvement project" means the renovation, reconstruction, or remodeling, costing at least six million dollars, of a race track facility, including, but not limited to, the construction of barns used exclusively for that race track facility, backstretch facilities for horsemen, paddock facilities, pari-mutuel and totalizator equipment and appurtenances to that equipment purchased by the track, new access roads, new parking areas, the complete reconstruction, reshaping, and leveling of the racing surface and appurtenances, grandstand enclosure, installation of permanent new heating or air conditioning, roof replacement, and installations of a permanent nature forming a part of the track structure.

(G) The cost and expenses to which the tax reduction granted under this section applies shall be determined by generally accepted accounting principles and be verified by an audit of the permit holder's records, upon completion of the major capital improvement project, either by the racing commission or by an independent certified public accountant selected by the permit holder and approved by the commission.

(H) This section and section 3769.201 of the Revised Code govern any tax reduction granted to a permit holder for the cost to the permit holder of any cleanup, repair, or improvement required as a result of damage caused by the 1997 Ohio river flood to the place, track, or enclosure for which the permit is issued.

Sec. 4743.01.  Each board, commission, or agency created under or by virtue of Title XLVII of the Revised Code and such other boards, commissions, and agencies as the director of the legislative service commission legislative budget officer determines are regulating occupations and professions shall, on the first day of September, make a report to the legislative budget office of the legislative service commission of its receipts and disbursements and of its official acts of the preceding fiscal year, in such form as the commission budget office may prescribe. The required report shall include an accounting of the fees such boards, commissions, and agencies charge and receive for examination, licensure, registration, certification, renewal of licensure, and providing of a duplicate copy of such certification or licensure; an accounting of fines charged by such boards, commissions, and agencies for violations of law and rules; the uses such boards, commissions, and agencies make of their revenue; the use of funds, as defined by section 131.01 of the Revised Code, by such boards, commissions, and agencies; the date on which the last adjustment was made to the fee charged; the percentage of increase or decrease of the last adjustment of fees; the authority by which such adjustment was made; and the extent to which such boards, commissions, or agencies have authority to adjust fees. The commission budget office shall receive and consolidate the reports as required by division (H)(C)(5) of section 103.13 103.36 of the Revised Code.

Sec. 5120.51.  (A)(1) If the director of rehabilitation and correction determines that a bill introduced in the general assembly is likely to have a significant impact on the population of, or the cost of operating, any or all state correctional institutions under the administration of the department of rehabilitation and correction, the department shall prepare a population and cost impact statement for the bill, in accordance with division (A)(2) of this section.

(2) A population and cost impact statement required for a bill shall estimate the increase or decrease in the correctional institution population that likely would result if the bill were enacted, shall estimate, in dollars, the amount by which revenues or expenditures likely would increase or decrease if the bill were enacted, and briefly shall explain each of the estimates.

A population and cost impact statement required for a bill initially shall be prepared after the bill is referred to a committee of the general assembly in the house of origination but before the meeting of the committee at which the committee is scheduled to vote on whether to recommend the bill for passage. A copy of the statement shall be distributed to each member of the committee that is considering the bill and to the member of the general assembly who introduced it. If the bill is recommended for passage by the committee, the department shall update the statement before the bill is taken up for final consideration by the house of origination. A copy of the updated statement shall be distributed to each member of that house and to the member of the general assembly who introduced the bill. If the bill is passed by the house of origination and is introduced in the second house, the provisions of this division concerning the preparation, updating, and distribution of the statement in the house of origination also apply in the second house.

(B) The governor or any member of the general assembly, at any time, may request the department to prepare a population and cost impact statement for any bill introduced in the general assembly. Upon receipt of a request, the department promptly shall prepare a statement that includes the estimates and explanations described in division (A)(2) of this section and present a copy of it to the governor or member who made the request.

(C) In the preparation of a population and cost impact statement required by division (A) or (B) of this section, the department shall use a technologically sophisticated system capable of estimating future state correctional institution populations. The system shall have the capability to adjust its estimates based on actual and proposed changes in sentencing laws and trends, sentence durations, parole rates, crime rates, and any other data that affect state correctional institution populations. The department, in conjunction with the advisory committee appointed under division (E) of this section, shall review and update the data used in the system, not less than once every six months, to improve the accuracy of the system.

(D) At least once every six months, the department shall provide to the correctional institution inspection committee a copy of the estimates of state correctional institution populations obtained through use of the system described in division (C) of this section and a description of the assumptions regarding sentencing laws and trends, sentence durations, parole rates, crime rates, and other relevant data that were made by the department to obtain the estimates. Additionally, a copy of the estimates and a description of the assumptions made to obtain them shall be provided, upon reasonable request, to other legislative staff, including the staff of the legislative service commission and the legislative budget office of the legislative service commission, to the office of budget and management, and to the division of criminal justice services in the department of public safety.

(E) The correctional institution inspection committee shall appoint an advisory committee to review the operation of the system for estimating future state correctional institution populations that is used by the department in the preparation of population cost impact statements pursuant to this section and to join with the department in its reviews and updating of the data used in the system under division (C) of this section. The advisory committee shall be comprised of at least one prosecuting attorney, at least one common pleas court judge, at least one public defender, at least one person who is a member or staff employee of the committee, and at least one representative of the division of criminal justice services in the department of public safety.

Section 2. That existing sections 102.01, 103.13, 103.132, 103.143, 103.16, 103.17, 103.18, 103.20, 103.21, 103.23, 124.14, 126.02, 126.21, 3333.04, 3333.12, 3333.122, 3333.27, 3769.08, 3769.20, 4743.01, and 5120.51 of the Revised Code are hereby repealed.

Section 3. It is the intent of the General Assembly that all individuals currently serving as fiscal staff of the Legislative Service Commission shall serve as employees of the Legislative Budget Office.