To amend sections 3306.25 and 3321.05 of the Revised Code to allow school district boards to exempt their districts from certain spending rules and the requirement to provide all-day kindergarten and to direct the duties of the Ohio School Funding Advisory Council.

Section 1.  That sections 3306.25 and 3321.05 of the Revised Code be amended to read as follows:

Sec. 3306.25.  (A) The superintendent of public instruction shall adopt rules, in accordance with Chapter 119. of the Revised Code, prescribing standards for the expenditure of funds calculated under this chapter and for the reporting of expenditures of those funds for particular funded components, as determined by the superintendent, so that those funds are directed toward the purposes for which they were calculated.

The superintendent shall classify the components into the following categories:

(1) Core academic strategy components, which shall be considered those components that are fundamental to successful education practices in the twenty-first century for all students;

(2) Academic improvement components, which shall be considered those components that have been demonstrated to make the greatest improvement in the academic achievement of underperforming students;

(3) Other components.

The superintendent shall determine the funded components included in each category.

(B) The rules adopted for core academic strategy components under division (A)(1) of this section shall prescribe standards for expenditure and reporting. The rules shall afford districts degrees of flexibility in determining how to spend funds calculated for the components included in that category depending on the district's current performance rating under section 3302.03 of the Revised Code. The higher the rating, the greater flexibility the rules shall provide. Districts rated excellent shall not be subject to the expenditure standards, but shall comply with the reporting standards.

(C) The rules adopted for academic improvement components under division (A)(2) of this section shall prescribe standards for expenditure and reporting and shall apply only to school districts that have been declared to be in academic emergency or academic watch, under section 3302.03 of the Revised Code, for two or more consecutive years, beginning with the ratings of districts issued under that section in the fiscal year that begins two years prior to the effective date of rules adopted under division (A)(2) of this section.

(D) The rules adopted under division (A)(3) of this section shall prescribe only reporting standards and shall not prescribe spending requirements or standards. The rules shall apply to all school districts.

(E) The rules shall take effect pursuant to a schedule determined by the superintendent. However:

(1) The rules adopted under division (A)(1) of this section prescribing reporting standards for core academic strategy components shall not take effect before July 1, 2010.

(2) The rules adopted under division (A)(1) of this section prescribing expenditure standards for core academic strategy components shall not take effect before July 1, 2011.

(3) The rules adopted under division (A)(2) of this section prescribing reporting standards for academic improvement components shall not take effect before July 1, 2010.

(4) The rules adopted under division (A)(2) of this section prescribing expenditure standards for academic improvement components shall not take effect before July 1, 2011.

(5) The rules adopted under division (A)(3) of this section prescribing reporting standards for other components shall not take effect before July 1, 2010.

(F) Each (1) Except as provided in division (F)(2) of this section, each school district shall comply with each applicable rule adopted under this section beginning on the effective date of that rule.

(2) A district board of education, by a majority vote, may adopt a resolution exempting the district from any applicable rule regarding the expenditure of funds calculated for the core teacher factor and the specialist teacher factor under section 3306.05 of the Revised Code. The resolution shall include a statement identifying cost or space concerns as the basis for adopting the resolution. If a board adopts such a resolution, the board shall not be required to apply for a waiver under section 3306.40 of the Revised Code to receive an exemption from the rule. The board shall adopt a new resolution in each fiscal year that the board seeks an exemption from the rule.

Sec. 3321.05.  (A) As used in this section, "all-day kindergarten" means a kindergarten class that is in session five days per week for not less than the same number of clock hours each day as for students in grades one through six.

(B) Any school district may operate all-day kindergarten or extended kindergarten, but beginning in fiscal year 2011, each city, local, and exempted village school district shall provide all-day kindergarten to each student enrolled in kindergarten, except as specified in divisions (C) and (D) of this section.

(C) The board of education of a school district, by a majority vote, may apply to the superintendent of public instruction for a waiver of adopt a resolution exempting the district from the requirement to provide all-day kindergarten for all kindergarten students. In making the determination to grant or deny the waiver, the state superintendent may consider space concerns or alternative delivery approaches used by the school district The board shall adopt a new resolution in each fiscal year that the board seeks an exemption from the requirement. The resolution shall include a statement identifying cost or space concerns as the basis for adopting the resolution.

(D) No district shall require any student to attend kindergarten for more than one-half of the number of clock hours required each day for grades one through six by the minimum standards adopted under division (D) of section 3301.07 of the Revised Code. Each school district shall accommodate kindergarten students whose parents or guardians elect to enroll them for one-half of the minimum number of hours required each day for grades one through six.

(E) A school district may use space in child day-care centers licensed under Chapter 5104. of the Revised Code to provide all-day kindergarten under this section.

Section 2.  That existing sections 3306.25 and 3321.05 of the Revised Code are hereby repealed.

Section 3.  The Ohio School Funding Advisory Council established in section 3306.29 of the Revised Code shall identify unfunded or underfunded school funding mandates enacted in Am. Sub. H.B. 1 of the 128th General Assembly and imposed on local schools, community schools, chartered nonpublic schools, and the Department of Education. Following an evaluation of these provisions, the Council shall identify the costs of the mandates and recommend to the Governor and the General Assembly what action the Council deems appropriate, if any, to amend or repeal the mandates. The Council shall convene a meeting for these purposes as soon as practicable following the effective date of this act.