Sub. S.B. 321
126th General Assembly
(As Reported by H. Finance and Appropriations)
·
Requires the Governor to calculate a state
appropriation limitation for each fiscal year of the 2008-2009
biennium and for each fiscal year thereafter.
·
Provides that the state appropriation limitation for
fiscal year 2008 is to be the aggregate General Revenue Fund (GRF)
appropriations for fiscal year 2007 increased by whichever of the
following is greater: (1) 3.5% or (2) the sum of
the inflation rate and rate of Ohio population change.
·
Provides that, for each succeeding fiscal year, the
growth factor is to be applied to the previous year's state
appropriation limitation or, every fourth year, the previous year's
aggregate GRF appropriations.
·
Prohibits the Governor from proposing and the General
Assembly from making aggregate GRF appropriations that exceed the
state appropriation limitation for each fiscal year.
·
Provides limited exceptions to the prohibition imposed
on the General Assembly.
·
Requires OBM to determine a method incorporating
zero-based budgeting principles into state agency budget request
forms.
·
Removes the Attorney General from the Tobacco Use
Prevention and Control Foundation (TUPAC) Board of Trustees.
·
Changes the quorum requirements for the TUPAC Board of
Trustees to a majority of voting members instead of a majority of
the members.
·
Requires an affirmative vote of a majority of the
voting members of the TUPAC Board, instead of an affirmative vote of
a majority of the members, in order for it to take action.
·
Provides that not more than 5% of the total
"disbursements, encumbrances, and obligations" (rather than
"expenditures") of certain Tobacco Master Settlement Agreement
foundations and funds in a fiscal year may be used for
administrative expenses in the same fiscal year.
·
Makes changes to the law governing the Physician Loan
Repayment Program including changes to eligibility requirements,
reimbursement for certain expenses associated with Program
recruitment, and Advisory Board membership.
·
Changes the requirements for participating in the
Dentist Loan Repayment Program.
·
Changes certain procedures of the Dentist Loan
Repayment Advisory Board.
·
Adds the phrase "but is not limited to" to the
definition of "applicant" used in current law governing criminal
records checks of applicants seeking employment with the Office of
the State Long-Term Care Ombudsperson program, including a regional
program, in a position that involves providing ombudsperson services
to residents of long-term care facilities or recipients of
community-based long-term care services.
·
Authorizes the Director of Aging, rather than the
Director of Health, to receive a copy of a criminal records check
conducted of such applicants.
·
Permits a city, exempted village, or local school
district participating in a state-assisted classroom facilities
project, as an alternative to levying a 1/2-mill maintenance tax for
23 years, to deposit annually for 23 years the same amount from
other school district resources.
·
Permits a Big-Eight school district participating in a
state-assisted construction project to transfer from its project
construction fund to a "special construction fund" investment
earnings attributable to the district, as long as certain conditions
are satisfied, to be used to acquire additional classroom
facilities.
·
Permits a school district to deposit state funds
reimbursed under the Expedited Local Partnership Program into the
district's general revenue and permanent improvement funds, if money
from those funds was used to pay for classroom facilities included
in the district's project.
·
Clarifies that unvoted debt issued by a school
district to pay its portion of a state-assisted classroom facilities
project does not count toward the district's overall debt limits.
·
Removes the authority of the Department of
Administrative Services to (1) contract for, operate, or superintend
telephone, other telecommunication, and computer services for
specified state agencies and (2) contract for bulk long distance
telephone services to be made available to immediate family members
of active duty military personnel, and confers that same authority
upon the Office of Information Technology.
·
Modifies the business personal property tax
reimbursements for school districts where territory is transferred
by allowing the district from which the territory is transferred to
retain one-half of the replacement payments for five years.
·
Modifies the business personal property tax
reimbursements for school districts where uranium-related facilities
have been located in order to preclude smaller reimbursements
resulting from higher state school aid offsets.
·
Makes tax credits authorized by the Ohio Venture
Capital Authority for losses on loans made to the Ohio Venture
Capital Program fully refundable credits.
·
Increases the total amount of technology investment
tax credits that may be approved from $20 million to $30 million.
·
Authorizes the conveyance of certain state-owned real
estate in Jefferson County that the Adjutant General has determined
is no longer required for armory or military purposes to a buyer or
buyers to be determined at a later date.
·
Authorizes the conveyance of certain state-owned real
estate in Franklin County that the Adjutant General has similarly so
determined to The Ohio State University.
·
Authorizes the conveyance of certain state-owned real
estate in Ross County to the City of Chillicothe.
(R.C.
107.032, 107.033, 107.034, 107.035, 131.55, 131.56, 131.57, 131.58,
131.59, and 131.60)
The
bill requires the Governor to calculate a state appropriation
limitation for each fiscal year of every biennium beginning with
fiscal years 2008 and 2009 and obliges the General Assembly, when
making aggregate General Revenue Fund (GRF) appropriations, to
comply with the limitation. "Aggregate GRF
appropriations" for purposes of the bill means all GRF
appropriations made by the General Assembly except for (1)
appropriations of money received by the federal government, (2)
appropriations made for tax relief or refunds of taxes and other
overpayments, and (3) appropriations of money received as gifts.
The
limitation generally limits increases in such appropriations in
succeeding fiscal years through special calculations that rely on
appropriation and various other data from the preceding fiscal year.
As
part of the state budget the Governor must submit at the beginning
of each new General Assembly, the bill requires the Governor to
include the state appropriations limitations the General Assembly
cannot exceed when making aggregate GRF appropriations for each
respective fiscal year of the biennium covered by that budget.
The aggregate GRF appropriations the Governor proposes in the
submitted budget also cannot exceed those limitations.
The
Governor establishes the limitations using one of three methods.
The fiscal year for which a limitation is to be calculated
determines the method of calculation. There are
three calculation methods: initial fiscal year,
recast fiscal year, and non-recast fiscal year.
Under the bill, the initial fiscal year is 2008 (July 1, 2007 to
June 30, 2008). A "recast fiscal year" means the
fiscal years 2012, 2016, 2020, and each fourth year thereafter.
A non-recast fiscal year is every other year not already
described. Stretched out as a time line, the
calculation sequence appears as follows: 2008
(initial fiscal year), 2009, 2010, 2011 (non-recast fiscal years),
2012 (recast fiscal year), 2013, 2014, 2015 (non-recast fiscal
years), 2016 (recast fiscal year), and so on.
Initial fiscal year. This
method of calculation is used only once and provides the starting
point for the following recast and non-recast fiscal year state
appropriation limitations. So, for fiscal year
2008, the state appropriation limitation is the sum of (1) the
aggregate GRF appropriations for fiscal year 2007, plus (2) the
aggregate GRF appropriations for fiscal year 2007 multiplied
by either 3.5 %, or the sum of the rate of inflation plus the rate
of population change, whichever is greater.
Non-recast fiscal year. For
each fiscal year that is not the initial fiscal year or a recast
fiscal year, the state appropriation limitation is the sum of (1)
the state appropriation limitation for the previous fiscal
year, plus (2) the state appropriation limitation for the
previous fiscal year multiplied by either 3.5 %, or the sum of the
rate of inflation plus the rate of population change, whichever is
greater.
Recast fiscal year. For each
recast fiscal year, the state appropriation limitation is the sum of
(1) the aggregate GRF appropriations for the previous fiscal
year, plus (2) the aggregate GRF appropriations for the
previous fiscal year multiplied by either 3.5%, or the sum of the
rate of inflation plus the rate of population change, whichever is
greater.
Estimates and updates. The
bill provides that the Governor, in determining the state
appropriations limitation for fiscal year 2008, must use estimates
regarding the aggregate GRF appropriations for fiscal 2007.
For the first fiscal year of any biennium, the Governor must
use the most recent published data available regarding the rates of
inflation and population change. For the second
fiscal year of any biennium, the Governor must use estimated rates
of inflation and population change.
When
determining the state appropriation limitations for each fiscal
biennium after the 2008-2009 biennium that begins with a non-recast
fiscal year, the Governor must do the following:
·
Update the rates of inflation and population change
used in the determination of the state appropriation limitation for
the second fiscal year of the previous biennium to reflect the most
recent published data;
·
Recalculate the second fiscal year's limitation based
on the update; and
·
Use the recalculated limitation for determining the
state appropriation limitations for the ensuing biennium to be
included in the budget the Governor submits to the General Assembly.
When
determining the state appropriation limitations for each fiscal
biennium after the 2008-2009 biennium that begins with a recast
fiscal year, the Governor must do the following:
·
Update the rates of inflation and population in the
same manner as described above for non-recast fiscal years;
·
Update the aggregate GRF appropriations amount for the
second fiscal year of the previous biennium;
·
Recalculate the second fiscal year's limitation based
on the updates; and
·
Use the recalculated limitation for determining the
state appropriation limitations for the ensuing biennium to be
included in the budget the Governor submits to the General Assembly.
The
bill permits the Governor to designate the Director of Budget and
Management to perform the Governor's duties as described above
regarding the estimates and updates.
Restriction on moving items off budget.
Under the bill, any appropriation that, for fiscal year 2007,
was an aggregate GRF appropriation, must be considered an aggregate
GRF appropriation for each succeeding fiscal year with respect to
the state appropriation limitation determination, even if it is made
from a different fund. Any new GRF appropriation
made in a fiscal year after fiscal year 2007 must also be considered
an aggregate GRF appropriation for each succeeding fiscal year after
it is first made with respect to the state appropriation limitation
determination, even if it is made from a different fund.
The
bill provides that the General Assembly may exceed the state
appropriation limitation for a fiscal year if either of the
following apply:
(1) The excess appropriations are made in response to the
Governor's proclamation of an emergency concerning such things as an
act of God, a pandemic disease, an infestation of destructive
organisms, repelling invasion, suppressing insurrection, defending
the state in time of war, or responding to terrorist attacks, and
can be used only for that emergency; or
(2) The General Assembly passes a bill by an affirmative vote of
two-thirds of the members of each house that specifically identifies
the purpose of each excess appropriation and states whether the
appropriations are to be included as aggregate GRF appropriations
with respect to future determinations of the state appropriation
limitation.
The
bill also provides that the appropriations described in (1) above
are not to be included as aggregate GRF appropriations for purposes
of determining the state appropriation limitation.
That same exclusion applies for appropriations described in
(2) above that specifically state they are not to be included as
aggregate GRF appropriations for purposes of determining the state
appropriation limitation.
The
bill provides that nothing in the provisions establishing the state
appropriation limitation can be construed to affect in any way the
state's obligation to make debt service payments.
The
bill also provides that the provisions establishing the state
appropriation limitation do not apply to reappropriations of the
unexpended balances of appropriations that a state agency has
encumbered prior to the close of a fiscal year.
(R.C.
126.02)
Under current law, the Director of Budget and Management is required
to prepare and submit to the Governor, biennially before the
convening of the General Assembly, state budget estimates of
revenues and expenditures for each state fund and budget estimates
for each state agency. In preparation of the
revenue and expenditure estimates, the Director must distribute
forms to each state agency so they may prepare their budget
requests. The bill requires the Director to
determine a method to incorporate the principles of zero-based
budgeting into those forms.
Current law establishes the Tobacco Use Prevention and Control
Foundation (TUPAC). The purpose of the
Foundation is to reduce tobacco use by Ohioans, with emphasis on
reductions by youth, minority and regional populations, pregnant
women, and others who may be disproportionately affected by tobacco
use. The reduction in use is to be accomplished
through a plan created by the Foundation that provides, among other
things, for grants for research and programs related to tobacco use
prevention and cessation. Grants are funded
primarily using money distributed to the state pursuant to the
Tobacco Master Settlement Agreement entered into between the state
and leading United States tobacco product manufacturers on November
23, 1998.
The
general management of the Foundation is vested in a 24-member board
of trustees that is made up of 20 voting members and four nonvoting
members. Of the 20 voting members, the Director
of Health, the Executive Director of the Commission on Minority
Health (or the Executive Director's designee), and the Attorney
General are ex officio members. Of the four
nonvoting members, two are members of the House of Representatives
and two are members of the Senate. A majority of
the members of the board constitutes a quorum, and no action can be
taken without the affirmative vote of a majority of the members.
(R.C.
183.04)
The
bill removes the Attorney General from the TUPAC Board.
(R.C.
183.05)
The
bill changes the quorum requirement for the TUPAC Board of Trustees
to a majority of voting members, instead of a majority of the
members. This change coupled with the removal of
the Attorney General from the board will result in the quorum number
requirement changing from 13 to ten.
(R.C. 183.05)
The
bill provides that the TUPAC Board of Trustees cannot take action
without an affirmative vote of a majority of the voting members of
the board, instead of an affirmative vote of a majority of the
members.
(R.C.
183.30)
Under current law, the money received by the state through the
Tobacco Master Settlement Agreement is divided up and distributed to
various funds and foundations that include, for example, the Tobacco
Use Prevention and Control Foundation, the Southern Ohio
Agricultural and Community Development (SOACD) Foundation, and the
Biomedical Research and Technology Transfer Trust Fund (BRTTTF).
With respect to the TUPAC and SOACD Foundations, current law
provides that no more than 5% of each foundation's total
expenditures in a fiscal year can be for its administrative
expenses. No more than 5% of the total
expenditures of the BRTTTF by the Third Frontier Commission in a
fiscal year can be used for the Commission's administrative
expenses.
The 5% limitations do not apply, however, for any fiscal year
for which the Controlling Board approves a spending plan submitted
by the Commission or particular foundation.
The
bill alters the 5% limitation by substituting "total disbursements,
encumbrances, and obligations" for "total expenditures."
The bill also specifies that the 5% limitation in a fiscal
year applies to the administrative expenses in the same fiscal year.
Finally, the bill provides that the 5% limitation for the
BRTTTF applies to expenses relating to the administration of that
fund by the Third Frontier Commission, instead of applying to any
Commission administrative expenses.
(R.C. 3702.71 through 3702.81)
In
1993, the General Assembly created the Physician Loan Repayment
Program.
Under the Program, primary care physicians
agree to provide primary care
services
40 hours
per week in a "health resource shortage area."
They also agree to treat a percentage of Medicaid and
Medicare patients equal to the percentage in their service areas.
In return for their service, the physicians receive repayment
of up to $80,000 of medical school debt ($20,000 annually over a
four-year period).
Program participants contract to provide an initial two years of
service, then either enter into one follow-up contract for two years
of service or two follow-up contracts for one year of service each.
The Director of Health may approve a physician for the
Program only if the General Assembly appropriates funds for the
Program, the Director finds that the physician is eligible for
participation, and the physician's primary care specialty
is needed in a health resource shortage area.
(R.C.
3702.72)
Current law. Under current
law, a primary care physician may apply for participation in the
Physician Loan Repayment Program if the physician has not received
national health service corps tuition or student loan repayment
assistance and meets one of the following requirements:
(1) Has enrolled in the final year of an accredited program
required for Board certification in a primary care specialty.
(2) Is enrolled in the final year of a fellowship program in a
primary care specialty.
(3) Has been engaged in the practice of medicine and surgery or
osteopathic medicine and surgery in Ohio for not more than three
years prior to submitting the application.
The bill. The bill eliminates
the requirement that an applicant for the Program cannot have
received national health service corps tuition or student loan
repayment assistance and instead requires that the applicant cannot
have an outstanding obligation for medical service to the federal
government, a state, or other entity at the time of participation in
the Program. The bill also eliminates the
requirement in (3), above that the applicant has been in practice
not more than three years, and replaces it with a requirement that
the applicant hold a valid certificate to practice medicine and
surgery or osteopathic medicine and surgery from the State Medical
Board of Ohio. The bill retains the requirements
in (1) and (2), above.
(R.C.
3702.73)
Current law. Current law
permits the Director of Health, when recruiting an applicant for the
Program, to pay costs incurred by the applicant and the applicant's
spouse for travel, meals, and lodging in making one visit to one
health resource shortage area. Current law also
permits the Director to refer the applicant to the Ohio Primary Care
Association, Inc., for assistance in being recruited to a site
within a health resource shortage area at which the applicant agrees
to be placed.
The bill. The bill eliminates
the Director's authority to undertake these activities.
(R.C. 3702.81; R.C. 3702.79 and 3702.80 (not in the bill))
Current law. Current law
provides for a Physician Loan Repayment Advisory Board that must
provide consultative services, along with the Ohio Board of Regents,
to the Director of Health when the Director adopts rules governing
the Program. The Advisory Board must also
annually submit a report to the Governor and General Assembly
describing the operations of the Program during the previous
calendar year.
Current law requires that the Board consist of 11 members as
follows:
(1) Six members appointed by the Governor: a
representative of the Department of Health, a representative of the
Ohio Academy of Family Practice, a representative of the Board of
Regents, a representative of the Ohio Primary Care Association,
Inc., a representative of the Ohio State Medical Association, and a
representative of the Ohio Osteopathic Association.
(2) Two members of the Ohio House of Representatives:
one representative from each political party, appointed by
the Speaker of the House.
(3) Two members of the Ohio Senate: one
representative from each political party, appointed by the Senate
President.
Existing law specifies that Board members serve without compensation
but may be reimbursed for reasonable and necessary expenses incurred
in the discharge of their duties.
The bill. The bill removes the
requirement that one of the six members of the Advisory Board
appointed by the Governor be a representative of the Ohio Primary
Care Association, Inc., and replaces it with a requirement that one
of these six members be a representative of the Ohio Association of
Community Health Centers. The bill also
eliminates the provision under which Board members may be reimbursed
for reasonable and necessary expenses incurred in the discharge of
their duties.
(R.C.
3702.89 and 3702.92)
Sub.
S.B. 51 of the 125th General Assembly created the Dentist Loan
Repayment Program. The program provides loan
repayment on behalf of individuals who agree to provide dental
services in areas designated as dental health resource shortage
areas by the Director of Health. The Department
of Health is required to administer the program in cooperation with
the Board of Regents and the Dentist Loan Repayment Advisory Board.
Under the program, the Ohio Board of Regents may agree to
repay all or part of the principal and interest of a government or
other educational loan taken by an individual for tuition,
educational expenses, and room and board. These
expenses must have been incurred while the individual was enrolled
in an accredited dental college or a dental college located outside
of the United States that meets the standards set by the State
Dental Board and must be determined reasonable by the Director of
Health. The Director of Health is required to
adopt rules in consultation with the Ohio Board of Regents and the
Dentist Loan Repayment Advisory Board to implement the Program.
(R.C.
3702.89)
To
be eligible to participate in the Dentist Loan Repayment Program, an
applicant must not have received National Health Service Corps
tuition or student loan repayment assistance and must be one of the
following: a dental student enrolled in the
final year of dental college, a dental resident in the final year of
residency, or a dentist engaged in the practice of dentistry in Ohio
for no more than three years prior to submitting the application.
The application must be submitted to the Director of Health
on a form the Director is required to prescribe.
All of the following information must be included or supplied:
(1) The applicant's name, address, and telephone number;
(2) The name of the dental college the applicant is attending or
attended and dates and verification of attendance;
(3) If the applicant is a dental resident, the facility at which
the dental residency is being performed;
(4) A summary and verification of the educational expenses the
applicant seeks reimbursement for under the Program;
(5) If the applicant is a dentist, the verification of the
applicant's license to practice dentistry in Ohio, and proof of good
standing;
(6) Verification of the applicant's United States citizenship or
status as a legal alien.
The
bill changes the requirements for participating in the Program by
specifying the following:
(1) That the individual is not receiving certain assistance in
student loan repayment, instead of has never received such
assistance;
(2) That, if practicing dentistry, has been in practice for less
than three years instead of less than three years in this state.
(R.C.
3702.92)
Sub.
S.B. 51 also created the Dentist Loan Repayment Advisory Board.
The Board consists of seven members: one member of the House
of Representatives appointed by the Speaker, one member of the
Senate appointed by the President, one representative of the Ohio
Board of Regents appointed by the Chancellor, the Director of Health
or an employee of the Department of Health designated by the
Director, and three representatives of the dental profession
appointed by the Governor from persons nominated by the Ohio Dental
Association.
The
Board must designate a chairperson and meet at least once annually.
The chairperson is to call special meetings as needed or on
the request of six members. Six members
constitute a quorum.
The
bill reduces from six to four the number of members of the Board
that constitute a quorum and that are required to compel the
chairperson to call a special meeting of the Board.
(R.C.
173.27)
The
Department of Aging is required to establish and operate a long-term
care ombudsperson program, which is known as the Office of the State
Long-Term Care Ombudsperson Program. The Office
consists of the State Long-Term Care Ombudsperson, the
Ombudsperson's staff, and regional long-term care ombudsperson
programs. Am. Sub. H.B. 530 of the 126th General
Assembly included a requirement that the State Long-Term Care
Ombudsperson or the Ombudsperson's designee request that the
Superintendent of the Bureau of Criminal Identification and
Investigation conduct a criminal records check with respect to each
job applicant who is under final consideration for employment with
the Office, including a regional program, in a full-time, part-time,
or temporary position that involves providing ombudsperson services
to residents of long-term care facilities or recipients of
community-based long-term care services. The
Director of Aging is to request the criminal records check if the
applicant is under final consideration for employment as the State
Long-Term Care Ombudsperson.
Current law enacted by H.B. 530 defines "applicant" as including a
person who is under final consideration for employment as the State
Long-Term Care Ombudsperson or the head of a regional long-term care
ombudsperson program. The bill provides that the
term "applicant" includes, but is not limited to, such persons.
The
State Long-Term Care Ombudsperson, Ombudsperson's designee, Director
of Health, and Ombudsperson, designee, and Director's representative
are among the individuals who may receive a copy of a criminal
records check conducted of a job applicant for the long-term care
ombudsperson program. Under the bill, the
Director of Aging, rather than the Director of Health, may receive a
copy of such a criminal records check.
The
Ohio School Facilities Commission administers several programs that
provide state assistance to school districts in acquiring classroom
facilities. The main program, the Classroom
Facilities Assistance Program (CFAP), is designed to provide each
city, exempted village, and local school district with partial
funding to address all of the district's classroom facilities needs.
It is a graduated, cost-sharing program where a district's
portion of the total cost of the project and its priority for
funding are based on the district's relative property wealth.
All districts are ranked from lowest to highest wealth per
pupil and placed in percentiles. Generally,
lower percentile districts are served first and receive a greater
amount of state assistance than higher percentile districts when it
is their turn to be served.
(R.C.
3318.05, 3318.051, 3318.06, 3318.063, 3318.08, 3318.18, and 3318.36)
Current law. In
addition to paying its share of the cost of constructing classroom
facilities included in a state-assisted construction project, a
school district also must generate and set aside a specified amount
for maintenance of those facilities. Generally,
each city, exempted village, and local school district that
participates in a state facilities program must levy at least 1/2
mill for 23 years for maintenance. As an
alternative, a district may either earmark other existing taxes or
make a one-time deposit of a designated "local donated contribution"
to meet its maintenance obligation.
The bill's new alternative.
The bill authorizes a new alternative mechanism for a city,
exempted village, or local school district to meet its maintenance
obligation. Under the bill, a district
commencing its project on or after the bill's effective date may
agree to deposit into its required maintenance fund, annually for 23
years, an amount from other district resources equal to 1/2 mill of
the district's tax valuation, instead of levying the maintenance
tax. To avail itself of this alternative, a
district board must pass a resolution petitioning the Ohio School
Facilities Commission to approve the arrangement.
The Commission's decision to approve or not approve the
petition is final and not subject to appeal. The
bill specifies that the Commission is not responsible for errors or
miscalculations in deciding whether to approve a petition.
The
district treasurer annually must certify to the Commission and the
Auditor of State that the amount required for the year has been
transferred into the maintenance fund. The
Auditor of State must include verification of the transfer as part
of any audit of the district. If the Auditor of
State finds that less than the required amount has been deposited,
the Auditor must notify the district board in writing and require
the board to deposit the necessary money within 90 days after the
notice. If the district board fails to
demonstrate to the Auditor's satisfaction that it has made the
required deposit, the Auditor must notify the Department of
Education. Upon that notice, the Department must
withhold 10% of the state operating funds calculated for the
district for the current fiscal year, until the Auditor notifies the
Department that the Auditor is satisfied that the board has made the
required transfer.
If a
district board determines that it can no longer continue making the
annual transfers, the bill allows a district board to rescind its
decision, but only if the district's voters approve the levy of a
tax for maintenance of the classroom facilities.
The levy must be in effect for the remainder of the 23-year
maintenance period (23 years minus the number of years that the
district made transfers) and must be for not less than 1/2 mill for
each dollar of district valuation. The bill
prescribes ballot language to be used for such a levy vote.
A
district electing to make the transfers authorized under the bill is
not relieved from its obligation to make annual deposits into its
general "capital and maintenance fund," which applies to all
districts under continuing law.
No payments under the maintenance equalization
subsidy (R.C. 3318.18). The bill
provides that districts electing to make the transfers authorized
under the bill, instead of levying the maintenance tax, may not
receive the new state maintenance equalization payments.
(Beginning in fiscal year 2007, the School Facilities
Commission is required to pay an equalized subsidy to city, exempted
village, and local school districts that participate in a
state-assisted facilities program and have tax valuations per pupil
below the statewide average. The subsidy
equalizes to the statewide average the amount each eligible district
raises from its 1/2-mill maintenance levy.)
(R.C.
3318.121)
Both
the state's contribution and a school district's contribution toward
the cost of a state-assisted facilities project must be deposited
into a "project construction fund." The bill
permits a Big-Eight school district to transfer from the district's
project construction fund to a "special construction fund" an amount
of the investment earnings attributable to the district's
contribution, as long as certain conditions are satisfied.
Money in this special construction fund (including investment
earnings of that fund) may be used to acquire classroom facilities
in later segments of the district's project or to acquire classroom
facilities that were included in the district's master facilities
plan prior to a reduction in scope of the project.
After a district's entire project has been completed, any
investment earnings remaining in the special construction fund must
be transferred to the district's maintenance fund to be used solely
for maintaining the facilities included in the project.
The
transfers may be made only if the school district and the School
Facilities Commission, or its designated representative, determine
that, due to reductions in project scope, the sum of (1) the unspent
amount of the district's contribution to the project construction
fund, including any investment earnings on that contribution that
are not to be transferred, and (2) the principal amount of any
additional securities authorized by the district's voters that have
not yet been issued, is projected at the time of the transfer to be
not less than 110% of the district's entire remaining portion of the
project cost.
These provisions apply to any Big-Eight district that satisfies the
conditions, whether it is participating in the Accelerated Urban
Program (Akron, Dayton, Cincinnati, Cleveland, Columbus, and Toledo)
or the regular Classroom Facilities Assistance Program (Canton and
Youngstown).
(R.C.
3318.36(E)(2))
The
Expedited Local Partnership Program provides a way for districts to
start their approved school building projects using local funds
while they wait for their turn for state funding under the main CFAP
program. Once a district is eligible for CFAP,
it may apply this advance expenditure of local resources toward its
portion of the cost of its total CFAP project.
If a district has spent more than its share of its CFAP project
while proceeding under the Expedited Program, the School Facilities
Commission must reimburse the district the amount of the
over-expenditure. Current law specifies that the
district must use the reimbursement to pay off debt service on
classroom facilities constructed under the Expedited Program before
it may be used for any other purpose.
The
bill provides an exception to this restriction.
Under the bill, a district may deposit reimbursed money into either
the district's general fund or a permanent improvement fund to
replace local resources the district withdrew from those funds for
constructing classroom facilities included in the district's CFAP
project.
(R.C. 3318.052)
Generally, a school district's unvoted net indebtedness (that is,
debt that may be incurred without approval of the district's voters)
is limited to not more than 1/10 of 1% of the district's tax
valuation.
Nevertheless, a district may incur (1) unvoted debt of up to
an additional 9/10 of 1% of its tax valuation to install energy
conservation measures
and (2) an unlimited amount of unvoted debt for the district's share
of its state-assisted classroom facilities project.
Under the latter exception, a school district may use an existing
property tax or school district income tax that properly can be used
for school construction to leverage securities to pay all or part of
the district's share of a state-assisted construction project.
This is an alternative to the usual method of financing a
district's share by requesting a voter-approved bond issue and tax
levy. Prior law appeared to inadvertently
subject this alternative to the 1% limit (due to the intersection of
three sections of law that made differing references to a district's
authority to issue unvoted debt). However,
recent amendments specified that unvoted debt issued to pay a school
district's portion of its school facilities project does not count
toward the 1% limit on unvoted debt otherwise imposed by law.
The
bill changes the wording of some of the recently enacted language to
further clarify that unvoted debt issued to pay a school district's
portion of a state classroom facilities project also does not count
toward the district's overall debt limit (9% of valuation) and the
limit on ballot questions to issue debt without the consent of the
Tax Commissioner and the Superintendent of Public Instruction (4% of
valuation).
It appears that this clarification does not substantively
change current law.
(R.C.
125.021)
Continuing law establishes the Office of Information Technology and
houses it within the Department of Administrative Services (DAS).
The Office is under the supervision of a Chief Information
Officer appointed by the Governor. The Chief
Information Officer serves as the Office's director, must advise the
Governor regarding the superintendence and implementation of
statewide information technology policy, and must lead, oversee, and
direct state agency activities related to information technology
development and use. In the latter regard, the
Chief Information Officer must (1) coordinate and superintend
statewide efforts to promote common use and development of
technology by state agencies, (2) establish policies and standards
for the acquisition and use of information technology by state
agencies (e.g., hardware, software, technology services, and
security) with which state agencies must comply, and (3) establish
criteria and review processes to identify state agency information
technology projects that require alignment or oversight.
(R.C. 125.18(A), (B), and (C)--not in the bill.)
The
Office has the same authority as DAS under specified sections of the
State Purchasing Law for the purchase of information technology
supplies and services for state agencies. The
statute amended by the bill, R.C. 125.021, is not included among the
listed sections. (R.C. 125.18(D)--not in the
bill.)
The
Office also may make contracts for, operate, and superintend
technology supplies and services for state agencies in accordance
with the State Purchasing Law and may establish cooperative
agreements with federal and local government agencies and state
agencies that are not under the authority of the Governor for the
provision of technology services and the development of technology
projects (R.C. 125.18(E) and (F)--not in the bill).
For
purposes of the Office's provisions, a "state agency" means every
organized body, office, or agency established by Ohio law for the
exercise of any function of state government, other than any
state-supported institution of higher education, the office of the
Auditor of State, Treasurer of State, Secretary of State, or
Attorney General, the Public Employees Retirement System, the Ohio
Police and Fire Pension Fund, the State Teachers Retirement System,
the School Employees Retirement System, the State Highway Patrol
Retirement System, the General Assembly or any legislative agency,
or the courts or any judicial agency (R.C. 125.18(G)--not in the
bill).
Current law. Under current
law, DAS generally is permitted to contract for, operate, and
superintend telephone, other telecommunication, and computer
services for state agencies, the exceptions being the military
department, the General Assembly, the Bureau of Workers'
Compensation, the Industrial Commission, and institutions
administered by boards of trustees. The Bureau
and the Commission, however, may contract with DAS to authorize it
to contract for, operate, or superintend those services for the
Bureau or the Commission. (R.C. 125.021(A).)
Also, under current law, DAS may enter into a contract to purchase
bulk long distance telephone services and make them available
at cost, or may make bulk long distance telephone services available
at cost under any existing contract DAS has entered into, to members
of the immediate family of persons deployed on military active duty
so that those family members can communicate with the persons so
deployed. Following the adoption of rules under
the Administrative Procedure Act, DAS may exercise either of these
contracting options. The contracts may be
entered only in accordance with the State Purchasing Law and only in
a nondiscriminatory manner that does not place any potential vendor
at a competitive disadvantage. (R.C.
125.021(B).)
Changes proposed by the bill.
As noted above, under the Office of Information Technology Law, the
Office has the same authority as DAS under specified sections
of the State Purchasing Law for the purchase of information
technology supplies and services for state agencies.
That listing of State Purchasing Law sections does not
include R.C. 125.021 and its above-described DAS contracting
authority.
The
bill amends R.C. 125.021 to remove DAS' authority to perform the
described contracting functions and to substitute the Office as the
state entity authorized to perform those contracting functions (R.C.
125.021(A) and (B)).
The
bill makes two changes to the computation of school district
reimbursements to replace business personal property tax revenue as
a result of the phase-out and elimination of those taxes.
One change addresses the payments made when territory is
transferred from one district to another, and the other change
addresses the computation for a school district where uranium
enrichment-related property is or was located.
(R.C.
5751.21(H)(2); Section 512.03)
Under current law, school districts and other taxing units receive
state payments to reimburse them for the decline in property tax
revenue caused by the phase-out and repeal of business personal
property taxes. Generally, the payments are
computed on the basis of the taxable value of the property in the
year before the phase-out begins. There are
special adjustments for cases where school districts are merged or
where part of the territory of one school district is transferred to
another school district (including joint vocational school district
mergers or transfers). The adjustment for
transferred territory is designed to ensure that reimbursement
payments from fixed-rate levies "follow" the value of property in
the transferred territory, computed in relation to all property in
the school district from which the territory is transferred.
The
bill changes this computation by allowing the district from which
the territory is transferred to retain one-half of the payments
arising from property in the transferred territory during the first
five years after the transfer, instead of all the payments arising
from the property being paid to the district receiving the
territory. The payments are to be computed by
using the fixed-rate tax rate of the district from which the
territory is transferred. The bill's change
applies only if the tax rate in the receiving district is less than
the tax rate in the other district. The new
computation applies through fiscal year 2012.
The
bill also expressly provides for the tax value loss associated with
property in transferred territory to follow the property to the
receiving district in order to ensure that the computation of each
district's reimbursement incorporates the state school funding
effects of the tax value loss. (Under ongoing
law, the tax value losses can increase a district's state formula
aid by a factor of $23 per $1,000 reduction in value; this indirect
aid increase is subtracted from the district's direct reimbursement
payment.)
(R.C. 5751.20(C)(5); Section 512.03)
Under ongoing law, a special reimbursement provision applies to
school districts and other taxing units where a uranium enrichment
or commercialization facility was located and where personal
property tax values declined by at least 50% in one year between
2001 and 2004. The provision permits such a
district or taxing unit to substitute its 2000 tax values for its
(presumably lower) 2004 tax values. This
substitution is intended to result in a greater reimbursement than
if the 2004 values are used.
The
bill modifies the provision for school districts by specifying that
the 2000 tax value losses are to be substituted only for the purpose
of computing the revenue losses and the direct reimbursement
payments, and not for the purpose of the indirect reimbursement
occurring under the state aid formula. This
change precludes reductions in the indirect reimbursement that would
be caused from using the higher 2000 tax values, and therefore
precludes the possibility that the reduction in indirect
reimbursement offsets the increased direct reimbursement brought
about by the substitution of the 2000 tax values to compute direct
reimbursement.
(R.C.
150.07, 5707.031, 5725.19, 5725.98, 5727.241, 5729.08, 5729.98,
5733.01, 5733.49, 5733.98, 5747.80, and 5747.98)
Under the Ohio Venture Capital Program administered by the Ohio
Venture Capital Authority, moneys in a "program fund" are invested
in venture capital funds, which in turn invest in Ohio-based
businesses that are in seed or early stages of development or in
established Ohio-based businesses that are developing new methods or
technologies. The program fund is funded through
investments from private investors. Some of the
profits from the program are put into the Ohio Venture Capital Fund
(OVCF), which is used to secure the private investors against
losses. To the extent the moneys in the OVCF are
not adequate to secure an investor against losses, the investor is
eligible for a tax credit granted by the Authority.
The credit is available against any of the following taxes:
personal income tax, corporation franchise tax, insurance
company franchise taxes, dealers in intangibles tax, and public
utility tax.
Taxpayers may elect to receive a refundable or a nonrefundable
credit from the Authority. Currently, refundable
credits approved by the Authority are only 75% refundable.
So, if a taxpayer has elected a refundable credit and that
taxpayer's tax liability for any given reporting period is less than
the amount of the credit, the taxpayer currently receives a refund
equal to 75% of the amount by which the credit exceeds the tax
liability.
The
bill makes all tax credits approved by the Authority refundable and
removes a taxpayer's option of electing a nonrefundable credit.
The bill also makes the credit fully refundable, which means
that taxpayers would no longer be limited to 75% of the amount by
which their refundable credits exceed their tax liabilities.
(R.C.
122.151)
Under continuing law, investors who make investments in certain
qualified technology-based businesses may apply to an Edison Center
for a tax credit that is equal to 25% of the amount of the
investment (or 30% if the investment is made in a business certified
as being economically and socially disadvantaged or a business
located in a distressed area of the state). An
Edison Center makes recommendations on the tax credits to a
committee of the Industrial Technology and Enterprise Advisory
Council, which makes a final determination as to whether a tax
credit should be approved. Current law prohibits
the issuance of more than $20 million in technology investment tax
credits. The bill increases this maximum amount
to $30 million.
(Section 483.03)
Authorization.
The bill authorizes the Governor to convey certain real estate in
Jefferson County that the Adjutant General has determined is no
longer required for armory or military purposes to a buyer or buyers
to be determined in accordance with the procedure discussed below.
The conveyance is pursuant to R.C. 5911.10, which authorizes
the Governor and the Adjutant General, when authorized by an act of
the General Assembly, to sell vacant armories.
(Division (A).)
Assistance and appraisal.
The bill requires the Director of Administrative Services to
assist in the sale of the parcel of real estate at the request of
the Adjutant General. And, the Adjutant General
must appraise the parcel or have it appraised by one or more
disinterested persons for a fee to be determined by the Adjutant
General. (Divisions (B) and (C).)
Procedure for sale.
The Adjutant General is required to offer the parcel for sale
as follows (division (C)):
(1) The Adjutant General first must offer the parcel for sale at
its appraised value to the township in which the property is located
(Township of Steubenville).
(2) If, after 60 days, the township has not accepted the offer to
purchase the parcel at the appraised value or if the township has
accepted the offer but has failed to complete the purchase, the
Adjutant General must offer the parcel at the appraised value to the
county in which the parcel is located (Jefferson County).
(3) If, after 60 days, the county has not accepted the offer to
purchase the parcel at the appraised value or if the county has
accepted the offer but has failed to complete the purchase, a
public auction must be held, and the parcel must be
sold to the highest bidder at a price acceptable to the Adjutant
General. The Adjutant General may reject any and
all bids for any reason whatsoever.
The
Adjutant General must advertise each public auction in
a newspaper of general circulation within the county once a week for
two consecutive weeks before the auction. The
terms of sale must be payment of 10% of the purchase
price, as bid by the highest bidder, in cash, bank draft, or
certified check on the date of sale, with the balance payable within
60 days after that date. If the purchaser does
not timely complete these conditions of sale, the purchaser will
forfeit the 10% of the purchase price to the state as liquidated
damages. And, if the purchase is not completed
and the sale is voided, the Adjutant General may sell the parcel to
the second highest bidder at the public auction.
(Division (C).)
Costs payment.
Advertising costs, appraisal fees, and other costs of the sale of
the parcel of real estate must be paid by the Adjutant General's
Department (division (D)).
Deed preparation and sale proceeds deposit.
The bill specifies the procedure for preparation of a deed to
the parcel of real estate upon the payment of the 10% of the
purchase price by the purchaser at a public auction or upon
notification from the Adjutant General's Department that the parcel
has been sold to a township or county in accordance with the bill's
priority sale provisions (divisions (A) and (E)).
The bill requires the purchaser to pay the balance of the
purchase price before the deed is delivered to the purchaser, who
must record it in the Jefferson County Recorder's office (division
(E)).
The
net proceeds of the sale must be deposited in the state treasury to
the credit of the Armory Improvements Fund in accordance with R.C.
5911.10 (division (F)).
Political subdivision subsequent sale caveat.
The bill specifies that, if the parcel of real estate is sold
to a township or county, and if that political subdivision sells the
parcel within two years after its purchase, the political
subdivision must pay to the state, to the credit of the Armory
Improvements Fund, an amount representing one-half of any ne
