To amend sections 189.04, 189.05, 189.06, and 189.08 and to enact section 189.041 of the Revised Code to establish the Local Government Performance Measurement Grant Program.

Section 1. That sections 189.04, 189.05, 189.06, and 189.08 be amended and section 189.041 of the Revised Code be enacted to read as follows:

Sec. 189.04.  (A) The local government innovation council shall award loans to a qualified political subdivision or a qualified group of political subdivisions to be used for the purchase of equipment, facilities, or systems or for implementation costs.

Loans made under division (A) of this section shall be repaid by recipients using savings achieved from the innovation project.

(B) Up to twenty per cent of the funds in the local government innovation fund, established in section 189.05 of the Revised Code, may be awarded by the council as grants to political subdivisions for use in process improvement or implementation of innovation project awards, except for local government performance measurement grants awarded under section 189.041 of the Revised Code.

(C) In every two fiscal years, the council may award one million dollars from the local government innovation fund, established in section 189.05 of the Revised Code, as local government performance measurement grants under section 189.041 of the Revised Code.

(D) The council shall award not more than one hundred thousand dollars in total grants and not more than one hundred thousand dollars in total loans to an individual political subdivision per innovation project under this section, excluding local government performance measurement grants awarded under section 189.041 of the Revised Code. For an innovation project involving a qualified group of political subdivisions, the council shall award, in total grants and loans, not more than five hundred thousand dollars, and the average amount per political subdivision shall not exceed one hundred thousand dollars.

Sec. 189.041. (A) The local government innovation council shall award local government performance measurement grants to political subdivisions to pay the necessary expenses of participation in the center for performance measurement program of the international city/county management association. A political subdivision may use moneys awarded under this section only for the following purposes:

(1) To pay the fee to the international city/county management association to enroll the political subdivision in the program;

(2) To pay employees of the political subdivision for the hours of work required to receive training to participate in the program and to gather and submit data to the center for performance measurement for the purpose of participation in the program;

(3) To pay an independent contractor to receive training to participate in the program and to gather and submit data to the center for performance measurement for the purpose of participation in the program; and

(4) To pay for necessary equipment, including computer equipment and software, for the political subdivision to receive training to participate in the program and to gather and submit data to the center for performance measurement for the purpose of participation in the program, if the political subdivision does not already possess such equipment.

(B)(1) All political subdivisions of the state are eligible to apply for a grant under this section. A political subdivision shall submit an application for a local government performance measurement grant to the council on a form specified by the council. The form shall require the political subdivision to provide a detailed estimate of the necessary expenses for the political subdivision to participate in the program.

(2) A political subdivision that is awarded funds under this section shall not be required to contribute matching funds toward the cost of participation in the program.

(3) The council shall award grants under this section in the order in which the council receives each properly completed application form, and in the amount reasonably requested in the application.

(C)(1) The council shall award not more than ten thousand dollars in every two fiscal years to a political subdivision under this section.

(2) After the end of each fiscal year in which a political subdivision has been awarded a grant under this section, the political subdivision shall do both of the following:

(a) Prepare and submit to the council, on a form prescribed by the council, an itemized statement of the grant moneys that were expended and the purposes for which those moneys were expended.

(b) Submit to the council any grant moneys awarded under this section that remain unexpended. The council shall deposit all unexpended moneys in the state treasury to the credit of the local government innovation fund created in section 189.05 of the Revised Code.

Sec. 189.05.  Funds for awards made by the local government innovation council shall be made from the local government innovation fund, which is hereby created in the state treasury. The fund shall consist of moneys appropriated to it, repayments of principal and interest on loans made from the fund, unexpended grant moneys submitted to the council under division (C)(2)(a) of section 189.041 of the Revised Code, and any grants or donations received from nonpublic entities. Interest earned on the money in the fund shall be credited to the fund.

Sec. 189.06.  (A) All political subdivisions of the state are eligible to apply for awards under the local government innovation program. Applications Except for applications submitted for a local government performance measurement grant under section 189.041 of the Revised Code, applications shall be submitted to the department of development on a form specified by the director of development. The department shall provide the application to the local government innovation council for evaluation and selection.

The Except as provided in section 189.041 of the Revised Code, the local government innovation council shall award loans and grants under the program in accordance with a competitive process to be developed by the council.

(B) Not later than December 31, 2011, the council shall establish criteria for evaluating proposals and making awards to political subdivisions,other than awards made under section 189.041 of the Revised Code. The criteria shall be developed in consultation with nonpublic entities involved in local government issues, state institutions of higher education, and the department of development, as determined by the council. The criteria shall include a requirement that at least one of the political subdivisions that is a party to the proposal provide matching funds. The matching funds may be provided by a nonpublic entity. The criteria for evaluating proposals may include the following provisions:

(1) The expected return on investment, based on the ratio of expected savings;

(2) The number of participating entities in the proposal;

(3) The probability of the proposal's success;

(4) The percentage of local matching funds available;

(5) The ability to replicate the proposal in other political subdivisions;

(6) Whether the proposal is part of a larger consolidation effort by the applicant or applicants;

(7) Whether the proposal is to implement performance audit or other audit recommendations under Chapter 117. of the Revised Code;

(8) Whether the applicant has successfully completed an innovation project in the past.

Sec. 189.08.  (A) Starting not later than March 1, 2012, the local government innovation council shall begin evaluating applications and proposals received under section 189.041 of the Revised Code and from the department of development for awards to political subdivisions. Not later than July 1, 2012, the council shall make its first round of awards to the political subdivisions.

(B) After making the first round of awards, the council shall evaluate proposals and make awards on a quarterly basis, or on another schedule determined by the council, with the council determining the funding levels for each round of awards.

(C) When making awards from the local government innovation fund created in section 189.05 of the Revised Code, except for grants awarded under section 189.041 of the Revised Code, the funds awarded across all rounds shall be allocated as follows:

(1) At least thirty per cent to political subdivisions that are not counties and have a population of less than 20,000 residents as determined in the decennial census conducted in 2010 or counties with a population of less than 235,000 residents as determined in the decennial census conducted in 2010;

(2) At least thirty per cent to political subdivisions that are not counties and have a population of 20,000 residents or more as determined in the decennial census conducted in 2010 or counties with a population of 235,000 residents or more as determined in the decennial census conducted in 2010.

If a proposal includes participants from both divisions (C)(1) and (2) of this section, the award may be drawn from either or both tiers in the local government innovation fund.

Section 2. That existing sections 189.04, 189.05, 189.06, and 189.08 of the Revised Code are hereby repealed.