5) GIFTED EDUCATION, SPECIAL EDUCATION, and CAREER TECHNICAL EDUCATION

Gifted Education Appropriation Item GRF 200-521. $47.608 million in FY08 and $48 million in FY09.

-Specifies that funds be used for gifted education units not to exceed 1,110 in each fiscal year; Earmarks up to $4.74 million in FY08 and $4.79 million in FY09 as an additional supplement for identifying gifted students; Earmarks up to $1.015 million in FY08 and up to $1.026 million in FY09 for the Summer Honors Institute, including funding for the Martin Essex Program, which shall be awarded through a request for proposals process.

Special Education

-Maintains the weighted per pupil funding for special education in 1-6 categories, $517.5 million in FY08 & $551 million in FY09. Keeps the 90 percent phase-in for special education weights. Increases the threshold amount for catastrophic special education and related services from $26,500 to $27,375 for categories 2-5 and from $31,800 to $32,850 for category 6.

-Changes the term “special education teachers” to “intervention specialists.”

-Retains the speech service personnel allowance at $30,000 per 2,000 students in FY08 and FY09 and GRADS personnel allowance at $47,555 in FY08 and FY09.

-Aligns state law with federal law regarding the provision of special education and related services for children with disabilities.

-Authorizes the ODE to reimburse county MR/DD boards, educational service centers, and school districts for preschool physical and occupational therapy services provided by a licensed physical therapist assistant and certified occupational therapist assistant under the supervision of licensed physical or occupational therapists.

Special Education Enhancements Appropriations item GRF 200-540. Total $138.8 million in FY08 and $140 million in FY09.

CHANGE-Earmarks $650,000 in each fiscal year to be used for the Collaborative Language and Literacy Instruction Project.

-Earmarks the following: up to $2,906,875 in each fiscal year for home instruction for children with disabilities; up to $1,462,500 in each fiscal year for parent mentoring programs; up to $2,783,396 in each fiscal year for school psychology interns; $750,000 in each fiscal year for the Out of School Initiative of Sinclair Community College; $200,000 in each fiscal year for a preschool special education pilot program in Bowling Green City School District; $200,000 in each fiscal year to support the Bellefaire Jewish Children’s Bureau; $75,000 in each fiscal year for Leaf Lake/Geauga Educational Assistance Funding; and $650,000 in each fiscal year for Project More.

-Earmarks $325,000 in each fiscal year for Ohio Center for Autism and Low Incidence to contract with the Delaware-Union ESC to provide autism transition services.

-Earmarks up to $82,707,558 in FY08 and $83,371,505 in FY09 for preschool special education and preschool supervisory units at county MR/DD boards, educational service centers, and school districts.

-Specifies that the remainder of the appropriation be used to fund special education and related services at county boards of mental retardation and developmental disabilities for eligible students under R.C. 3317.20 and at institutions for eligible students under R.C. 3317.201

Earmarks up to $250,00 in FY08 from item 600-689, TANF Block Grant (Fund 3V6) to reimburse the Department of Education for providing funding for an additional ten parent mentors, to increase support for parents with children who have special needs. Such funding shall be in addition to that which is provided for parent mentoring programs in GRF appropriation item 200-540, Special Education Enhancements, in the Department of Education.

Career-Technical Education Enhancements

GRF appropriation item 200-545. Total $9.2 million in FY08 and $9.3 in FY09.

-Maintains weighted funding for career-technical education.

CHANGE -Earmarks up to $2,509,152 in FY08 and up to $2,584,427 in FY 2009 to fund career-technical education units (rather than grants) at institutions.

6) NONPUBLIC SCHOOLS

Nonpublic School Administrative reimbursements appropriation item GRF 200-532.

-Appropriates $59.8 million in FY08 and $61.6 million in FY09 for administrative expenses for chartered nonpublic schools. Increases from $275 to $300 per pupil the cap on reimbursement payments.

Auxiliary Services Funds Appropriation item GRF 200-511. Total $131 million in FY08 and $135 million in FY09.

-Earmarks up to $2 million in FY08 and up to $2.12 million in FY09 for payment of Post-Secondary Enrollment Options Program for nonpublic students.

-Outlines requirements for chartered nonpublic schools that close.

-Requires a school district to label equipment or materials it purchases or leases with auxiliary services funds for loan to a chartered nonpublic school, unless the district determines that they are consumable or have a value of less than $200.

7) SCHOLARSHIPS/VOUCHERS TO ATTEND PRIVATE SCHOOLS

-Maintains in current law the EdChoice Scholarship Program, the Autism Scholarship Program, and the Cleveland Scholarship and Tutoring Program. (Some of these programs are referenced in this bill, and some are not.)

Special Education Scholarship Program

8) CHARTER SCHOOLS (COMMUNITY SCHOOLS)

-Requires criminal background checks of members of a community school governing authority.

Moratorium

-Relaxes the moratorium on opening new brick and mortar charter schools, but retains the current moratorium on eschools. Permits new start-up schools under certain conditions, some of which are specific to a certain school, operator, or sponsor, and are listed below. The moratorium does not apply to conversion community schools.

Exceptions to Moratorium

-Permits new start-up community schools after June 30, 2007, but only if they contract with an operator that has schools in Ohio or other states that perform at a level higher than academic watch.

-Permits the governing authority of a start-up community school that is not managed by an operator to open one other community school in the 2007-2008 school year if the governing authority filed a copy of its contract with the new school’s sponsor with the Superintendent of Public Instruction prior to March 15, 2006, and the current school has been open for at least four years, is rated excellent or effective, and made adequate yearly progress for the previous school year.

-Permits the governing authority of a start-up community school that is not sponsored by the school district in which it is located, to enter into another contract with the same sponsor to open an additional start-up school in the 2008-2009 school year. The school must be located in the same district as the current school and serve grades K to 6. The governing authority must file a copy of the sponsor contract with the Superintendent of Public Instruction by March 15, 2008. The current school must be rated excellent or effective and named a School of Promise for three of the last four school years, made adequate yearly progress for the last four school years, has been in operation at least five years, and is not managed by an operator.

-Allows the Dayton Early College Academy to operate as a start-up community school beginning in the 2007-2008 school year, if certain conditions are met.

-Limits an educational service center to sponsoring community schools that are located in a county or contiguous county to the ESC, but grandfathers current ESCs.

Enrollment Disputes

VETOED - Section 3314.08 Division O (1), (2), & (3). Requires the school district to prove the merits of challenges concerning disputes in student enrollment between school districts and community schools. Prohibits the ODE from withholding payment to a community school until the district has proven its case.

Unauditable School

-Requires the Auditor of State to provide notification of a finding that a community school is unauditable to the school, its sponsor, and ODE, and to post the notification on the Auditor’s web site.

-Prohibits the sponsor of an unauditable community school from entering into contracts with additional community schools until the Auditor completes a financial audit of the school.

-Requires the sponsor of an unauditable community school to respond to the Auditor with a description of the actions it will take as a result of the finding that the school is unauditable.

-Requires ODE to cease all state payments to a community school that fails to make progress in bringing its records into auditable condition within 90 days after being declared unauditable, but release withheld funds when the Auditor is able to complete an audit of the school.

Other Provisions

-Requires ODE to base the full-time equivalency of a community school student, for state funding calculations, on the percentage of the learning opportunities offered to the student instead of 920 hours, which is the minimum number of hours of learning opportunities each community school is required to offer to its students under current law. This provision will provide a way to determine community school student FTEs and apportion the FTE when a community school student moves to a different school during a school year.

NEW -Permits a community school to transport students with or without entering into an agreement with the students’ resident school districts, unless the community school previously accepted transportation responsibility and has since relinquished it, in which case the school may not accept that responsibility again without the consent of the students’ resident school district.

9) ACADEMIC DISTRESS COMMISSION

-Maintains current law that requires beginning July 1, 2007 the Superintendent of Public instruction to establish an academic distress commission for each school district that has been in a state of academic emergency and has failed to make adequate yearly progress for four or more consecutive years. The commission consists of three voting members appointed by the Superintendent of Public Instruction and two voting members appointed by the president of the district board of education.

-Requires the two members of each commission appointed by the president of the district board of education to be residents of the district.

-Requires each commission to adopt an academic recovery plan approved by the Superintendent of Public Instruction and to update the plan at least annually.

-Requires each member of a commission to file a prescribed financial disclosure statement as required for various other appointed and elected officials.

-Requires the ODE to provide administrative support for each commission.

-Requires commission meetings to be public and subject to the requirements of meetings of other public bodies under R.C. 121.22 (the open meetings law).

10) SCHOOL FACILITIES

-Removes a House provision regarding the sale of school buildings to community schools. Retains current law that requires school districts to first offer to sell unused schools to start-up community schools in the district before otherwise disposing of them; requires school district to sell unused schools to start-up community schools when the district has not used the property for educational purposes for one year and has not adopted a plan to so use that property within the next three years; and grants school districts that sell unused property to a community school the right of first refusal if the community school later disposes of the property.

-Provides greater flexibility for certain information technology centers to meet their capital facilities needs by permitting a council of governments comprised mainly of local, city, and exempted village school districts and approved as an Information Technology Center pursuant to the Ohio Education Computer Network Law to issue special obligation securities for the purpose of acquiring, constructing, or improving real or personal property for the use of the council or one or more of its members.

NEW-Permits a school district that has already undertaken a classroom facilities project under the Exceptional Needs Program and that within two years of the bill’s effective date will proceed with another project under that program to exceed the statuary debt limits in order to issue voter-approved bonds to pay for that project, including the cost of locally funded initiatives that are not part of the project, as long as the district’s total net indebtedness after the issuance of those bonds does not exceed 125 percent of the statutory debt limit. This provision will allow districts more flexibility in building school facilities.

NEW -Requires the School Facilities Commission (SFC) to notify the Superintendent of Public Instruction whenever a school district will exceed either debt limit.

VETOED - Section 3318.36(F) Prevents a school district’s percentile wealth ranking from being raised to a higher percentile for purposes of participating in the Classroom Facilities Assistance Program after the district has entered into an agreement with the School Facilities Commission (SFC) under the Expedited Local Partnership Program and the district’s voters have approved a bond issue to pay the district’s portion of the basic project cost.

11) ACCOUNTABILITY

Penalties for Reporting Inaccurate EMIS Data

-Repeals a requirement for ODE to penalize school districts and community schools that fail to properly report data to the Education Management Information System (EMIS) by withholding 10 percent of state payments for the first failure in a fiscal year and an additional 20 percent of state payments for a second failure in a fiscal year. Instead, requires the State Board of Education to adopt rules to implement sequential actions against school districts, joint vocational schools, community schools, educational service centers, and other educational entities that fails to report accurate data.

-Permits ODE to release certain funds withheld from an entity if the entity corrects its data.

-Allows ODE to arrange for an audit of an entity’s data reporting practices any time it believes the entity has not made a good faith effort to properly report EMIS data.

-Requires school districts and schools selected by the Superintendent of Public Instruction to participate in the administration of the National Assessment of Education Progress in accordance with section 3301.27 of the Revised Code.

12) ACADEMIC ACHIEVEMENT

Standards for Physical Education

-Requires that no later than December 31, 2007, the State Board of Education adopt physical education standards for grades K-12.

-Requires the Superintendent of Public Instruction to appoint a physical education coordinator to provide guidance and oversight for school districts in following the physical education standards.

-Eliminates the requirement that physical education standards and model curricula are subject to approval by concurrent resolution of both houses of the General Assembly.

-Requires each school district, community school, and chartered nonpublic school to report to ODE the number of minutes per week and the number of classes per week of physical education provided to students in each of grades K to 8 in the 2006-2007 school year and scheduled to be provided to students in the 2007-2008 school year.

Ohio Core Certified

CHANGE-Removes a Senate provision that required ODE, on the state report cards published in 2008 through 2013, to designate as “Ohio Core Certified” school districts and community schools that both offer all components of the Ohio Core curriculum to their high school students, and apply the requirement to complete two semesters of fine arts between grades 7 and 12. Requires ODE to list the Ohio Core Certified school districts and community schools on its web site.

Intervention

-Provides through appropriation item 600-689, TANF Block Grant (Fund 3V6), up to $10 million in each fiscal year for TANF eligible activities pursuant to section 5101.801 of the ORC to provide intervention services to improve the graduation rate among African-American males. Any moneys from the federal TANF Block Grant used for this purpose shall be provided on a reimbursement basis.

13) STEM INITIATIVE

Appropriation item GRF 200-457. Total $10 million in FY08 and $10 million in FY09.

CHANGE - Earmarks $3 million in each fiscal year for grants to STEM schools.

CHANGE - Earmarks $3,283,000 in each fiscal year to support STEM Programs of Excellence.

-STEM Earmarks: $2.6 million in each fiscal year for mathematics initiatives; $200,000 in each fiscal year for the Ohio Resource Center for Math and Science; $282,000 in each fiscal year for the JASON Expedition project; $285,000 in each fiscal year for science initiatives including the Ohio Science Institute (OSCI); and $350,000 in each fiscal year to support the Young Buckeye STEM Scholars After School and Summer Program.

-Establishes the STEM Subcommittee of the Partnership for Continued Learning consisting of the Superintendent of Public Instruction, the Chancellor of the Board of Regents, the Director of Development, and four public members (2 appointed by the Governor, 1 appointed by the Senate President, and 1 appointed by the Speaker of the House) based on their expertise in business or science, technology, engineering, or mathematics (STEM) fields. The Partnership for Continued Learning will receive $300,000 in each fiscal year for STEM school administration.

-Authorizes the STEM Subcommittee to issue a request for proposal for the establishment of STEM schools, and the STEM subcommittee to approve the establishment of up to five STEM schools, serving any of grades 6 to 12, to open for instruction in FY09 and to award grants to those schools.

-Authorizes partnerships of public and private entities that include a school district, higher education entities, and business organizations to submit proposals to establish STEM schools.

-Authorizes the STEM subcommittee to award grants to STEM Programs of Excellence operated by school districts and educational service centers for any of grades K to 8.

-Authorizes the Partnership for Continued Learning through the STEM Subcommittee to make recommendations to the General Assembly and the Governor for training of STEM educators.

-Requires the Partnership for Continued Learning, through the STEM subcommittee, to work with an Ohio-based nonprofit enterprise selected by the subcommittee to support the strategic and operational coordination of public and private STEM education.

-Requires the State Board of Education to issue a two-year provisional educator license for teaching science, technology, engineering, or math in grades 6 to 12 in a STEM school to applicants who have a bachelor’s degree in a field related to the teaching area and have passed a content assessment in the teaching area.

-Requires STEM school teachers to be “highly qualified,” but allows individuals who do not hold an educator license but have at least a bachelor’s degree or five years of work experience in the subject being taught to teach in a STEM school for up to 40 hours per week.

-Requires each STEM school to have a treasurer licensed by the State Board of Education.

-Requires the Auditor of State to conduct annual audits of each STEM school.

-Provides for funding of STEM school students by counting STEM students in the enrollments of their resident school districts and then deducting and transferring per pupil funding to the STEM schools.

-Specifies that teaching and nonteaching employees of STEM schools retain their collective bargaining rights.

-Declares that STEM schools are public schools, prohibits them from charging tuition, and specifies that they may not levy taxes or issue bonds backed by tax revenues.

-Applies to STEM schools and their governing bodies certain state laws governing school districts, and requires each governing body to provide annual assurances to the ODE regarding compliance with certain of those laws and the preparedness of the school’s staff and facilities for the upcoming school year.

-Requires the Department of Education to issue annual report cards for each STEM school in the same manner as other public schools.

-Requires each STEM school to comply with the state accountability system as it applies to school “buildings.”

-Prohibits STEM schools from enrolling students who are not Ohio residents or establishing admission standards based on ability or achievement.

-Requires school districts to transport STEM school students in the same manner required by law for private school students, if the STEM school’s proposal does not provide for student transportation.

14) APPROPRIATIONS AND EARMARKS

Alternative Education Programs GRF appropriation item 200-421. Total $14.9 million in FY08 and $13 million in FY09.

-Specifies funding for students expelled, suspended, those who have dropped out of school or who are at risk of dropping out, and those who are truant or disruptive, or on probation or parole.

-Earmarks the following funds: up to $6,227,310 in each fiscal year for alternative education grants for the Urban 21 school districts; up to $6,161,074 in each fiscal year for alternative education grants for suburban and rural school districts; up to $272,281 in each fiscal year for program administration, monitoring, technical assistance, support, research, and evaluation of the alternative education grants; $100,000 in each fiscal year for support of the Toledo Tech Academy, and requires that $25,000 in each fiscal year be used for FIRST - For Inspiration and Recognition in Science and Technology programs; $100,000 in each fiscal year for the Cincinnati Arts and Technology Center; and $2 million in FY08 to support Improved Solutions for Urban Students (ISUS) in Dayton/Sinclair Youth Initiative.

School Improvement Initiatives GRF appropriation item 200-431. Total $21.58 million in FY08 and $21.9 million in FY09

-Earmarks the following funds: $250,000 in each fiscal year to support Amer-I-Can; up to $450,000 in each fiscal year to be used for Ohio’s Rural Appalachian Leadership Development Initiative; up to $601,165 in each fiscal year to support educational media centers to provide Ohio public schools with instructional resources and services; $10,387,835 in each fiscal year to support school districts in the development and implementation of continuous improvement plans; up to $236,250 in each fiscal year for Project GRAD; $7,988,985 in FY08 and to $8,323,985 in FY09 for creating early college high schools and converting large urban high schools into small personalized high schools; up to $75,000 in fiscal year 2008 to Southern State Community College for the Pilot Post-Secondary Enrollment Options Program with Miami Trace High School; $1,000,000 in each fiscal year to support Jobs for Ohio Graduates (JOG); and up to $600,000 in each fiscal year to support start-up costs for gaining business and industry credentialing program accreditation and to support the development of a data collection system across the numerous industry test providers.

School Management Assistance GRF appropriation item 200-422

Earmarks the following funds: up to $1,715,000 in each fiscal year to be used by ODE for expenses incurred by the Auditor of State for the Auditor’s role in performing audits of districts in fiscal distress; up to $250,000 in each fiscal year to be used by ODE to work with school districts and entities that serve school districts to develop and deploy analytical tools that allow districts to analyze more thoroughly district spending patterns in order to promote more effective and efficient use of resources; Specifies that the remainder of the appropriation in each fiscal year be used to provide fiscal technical assistance and inservice education for school district management personnel and to administer, monitor, and implement the fiscal watch and fiscal emergency provisions of the Revised Code.

Academic Standards GRF appropriation item 200-427. Total $7.1 in FY08 and $7.1 in FY09.

-Earmarks the following funds: $150,000 in each fiscal year to be used to support Ohio’s Partnership for Continued Learning at the direction of the Office of the Governor. Specifies that these funds are to be used in combination with funding earmarked for this purpose in the Board of Regents’ budget under appropriation item 235-321, Operating Expenses; $1 million in each fiscal year for Project Lead the Way leadership and management oversight, and initial and continuing support of the project’s workforce development programs; $50,000 in each fiscal year for the Art Academy of Cincinnati; and Specifies that the remainder of the appropriation be used by ODE for the development and dissemination of academic content standards and curriculum models, and permits ODE to use the remainder to support the coordination of Physical Education standards.

Literacy Improvement-Professional Development GRF 200-433. Total $15.5 million in FY08 and $15.5 million in FY09.

-Earmarks up to $9,290,000 in each fiscal year for educator training in literacy for classroom teachers, administrators, and literacy specialists, and up to $5 million in each fiscal year to support literacy professional development partnerships between ODE, higher education institutions, literacy networks, and school districts.

PARTIAL VETO - Retains the earmark of $900,000 in each fiscal year to fund the Reading Recovery Training Network to cover the cost of release time for the teacher trainers. Vetoed the provision that provided grants to districts to implement other reading improvement programs on a pilot basis and use funds for evaluations of the impact and effectiveness of Reading Recovery and other reading improvement programs.

-Earmarks $100,000 in each fiscal year for the Contemporary Arts Center to be used for art education for children and a children’s museum.

-Specifies that the remainder of the appropriation be used by ODE to provide administrative support of literacy professional development programs. Requires the ODE to receive Controlling Board approval to contract with an external evaluator.

Student Assessment GRF appropriation item 200-437. Total $77 million in FY08 and $76 million in FY09.

-Provides funds to pay for Ohio’s statewide assessment system. Specifies that, if funds remain in this appropriation after this purpose is fulfilled, ODE may use the remainder of the appropriation to develop end-of-course exams; Earmarks $207,364 in FY08 and $212,486 in FY09 for the kindergarten readiness assessment.

-Authorizes the Director of Budget and Management in each fiscal year to transfer unspent and unencumbered funds within ODE, as necessary, to GRF appropriation item 200-437, Student Assessment, to fully fund the student assessment requirements of state law. If these transferred funds are not sufficient, permits the Superintendent of Public Instruction to seek Controlling Board approval to transfer up to $9 million from the Lottery Profits Education Reserve Fund to the GRF to be appropriated to this item.

Accountability/Report Cards GRF appropriation item 200-439. Total $7 million in FY08 and $8 million in FY09.

-Earmarks up to $3,028,540 in each fiscal year to train district and regional specialists and district educators in the use of the value-added progress dimension and training in the use of data to improve student achievement.

-Specifies that the remainder of the appropriation be used to incorporate a statewide pilot value-added progress dimension into performance ratings for school districts and for the development of an accountability system that includes the preparation and distribution of school report cards.

Education Management Information System GRF appropriation item 200-446. Total $16 million in FY08 and $16.5 million in FY09.

-Specifies that funds for Education Management Information System be used to improve the education management information system (EMIS), information technology centers, and provide educational entities support for data collection. Requires educational entities to adopt data definitions and standards as developed by the newly named “Educational Management Information System Advisory Board.”

Educator Training GRF appropriation item 200-410. Total $19.6 million in FY08 and $20 million in FY09.

-Specifies that the ODE shall incorporate cultural competency as a component of professional development. Earmarks the following funds: up to $9.25 million in FY08 and up to $10 million in FY09 to pay the application fee for first time National Board for Professional Teaching Standards up to 400 applicants each year, and pay for recognition and rewards for teachers certified by the National Board; up to $9.5 million in each fiscal year for entry year teacher and principal programs; up to $200,000 in each fiscal year for technical assistance and grants for districts to develop knowledge/skills-based compensation systems; up to $350,000 in each fiscal year for training and professional development of school administrators, school treasurers, and school business officials; up to $63,000 in each fiscal year for the Ohio University Leadership Program; and $250,000 in each year to support the Ohio School Leadership Institute.

Educator Preparation GRF appropriation item 200-448. Total $1.3 million in both years.

-CHANGE: Removes the following Executive and Senate provision: Earmarks $100,000 in each fiscal year for the Teacher Quality Partnership project.

-Earmarks remaining funds to support the Educator Standards Board and programs for school leaders.

Ohio Core Support GRF appropriation 200-536. Total $7.7 million in FY08 and $15 million in FY09.

-Supports implementation of the Ohio Core Program and specifies that ODE and the Board of Regents shall jointly administer funding to eligible school districts, fiscal agents, individuals, and programs.

-Earmarks the following funds: up to $2.6 million in FY08 and up to $3 million in FY09 to support the participation of teachers and mid-career professionals in a twelve-month intensive training program that leads to licensure in a laboratory-based science, advanced mathematics, or foreign language field and employment in a hard to staff school; up to $1.5 million in FY08 and up to $2.1 million in FY09 to support alternative teacher licensure programs developed by educational service centers in partnership with institutions of higher education; up to $3.6 million in each fiscal year to be distributed to school districts and chartered nonpublic schools to contract with institutions of higher education for instruction in advanced mathematics, laboratory-based science, or foreign language that results in dual high school and college credit.

-Earmarks up to $5,675,000 in FY09 to be distributed to public school districts for supplemental post-secondary enrollment options participation.

-Directs the Partnership for Continued Learning to make program recommendations by October 31, 2007 to remove school district barriers for students to participate in higher education opportunities.

-Earmarks $750,000 in FY09 for Advanced Placement (AP) Summer Institutes for 150 English, social studies, and foreign language teachers, and 600 science and mathematics teachers.

Literacy Improvement Classroom Grants appropriation item GRF 200-566. Total $12.06 in FY08 and $12.06 in FY09.

-Earmarks these funds to provide reading improvement grants to public schools in grades K-12 to help struggling students.

Lottery Profits Education Fund Group. Total $688 million in FY08 and $667 million in FY09.

-Specifies that funds in this group shall be used in conjunction with Foundation Funding to provide payments to school districts.

Lottery Profits Education Reserve Fund

-Creates the Lottery Profits Education Reserve Fund (Fund 018) in the State Treasury. Stipulates that investment earnings of the fund be credited to the fund. Requires that the Director of Budget and Management transfer in June of each fiscal year any funds in excess of $75 million that are not needed for the foundation program to the Public School Building Fund (Fund 021) and appropriates this amount to CAP-622, Public School Buildings. Appropriates in each fiscal year an amount necessary to make adjustments in state aid to school districts with certain amounts of uncollected local taxes.

-Requires that the Director of the Lottery Commission, on or before July 15 following the respective fiscal year, to certify the amount by which the lottery profit transfers received by the Lottery Profits Education Fund for FY07 exceed $637,900,000 and for FY08 exceed $657,900,000. Permits the Director of Budget and Management to transfer the amount from FY07 to Fund 018.

Distribution Formulas

15) TOBACCO SECURITIZATION

-Repeals current law regarding the distribution of revenue to specific funds as a result of the Tobacco Master Settlement Agreement (TMSA). These funds were established to receive deposits from the settlement in November 1998 of a lawsuit between several states (including Ohio) and the major tobacco companies.

-Allows the Tobacco Use Prevention and Control Foundation to create a nonprofit corporation to raise money to help the Foundation conduct its tobacco use prevention programs.

-Creates the Buckeye Tobacco Settlement Financing Authority consisting of the Governor, OBM Director, and Treasurer of State, which has the authority to sell all or a portion of the amounts to be received by the state under the Tobacco Master Settlement Agreement. The Authority can accept and purchase those amounts, and issue and sell obligations. This action will provide an estimated $5 billion. Approximately $2.2 billion will be allocated for school facilities, which will accelerate the school building program. According to Director Mike Shoemaker, OSFC offered funding to 30 districts in FY07. “The cash from tobacco securitization could increase the number of districts by an additional 30 over the next three years.”

-Specifies that the aggregate principal amount of the obligations issued cannot exceed $6 billion. The obligations shall be used to pay the costs of capital facilities for a system of common schools throughout the state and or state-supported or state-assisted institutions of higher education, and refunding, renewal, or advance refunding of any obligations previously issued for that purpose. The proceeds of the obligations securitized from the Tobacco Master Settlement Agreement are to be deposited into the School Building Program Assistance Fund and the Higher Education Improvement Fund. Approximately $2.20 billion would cover all of the funding currently allocated to the Education Facilities Trust Fund and to the Education Facilities Endowment Fund of the School Facilities Commission for FY08 through FY2025. Approximately $2.84 billion would cover the capital costs of School Facilities Commission ($1.92 billion) and higher education ($920 million) over the next three years. GRF debt service payments for the School Facilities Commission and higher education will be lower once these capital costs are no longer financed with bonds. Funds that would have been used to finance SFC and higher education bonds will be used to cover the cost of the expansion of the homestead property tax exemption.

-Dissolves the Authority two years after obligations have been met, and vests in the state, the Authority is to execute any necessary assignments or instruments, including any assignment of any right, title, or ownership to the state for receipt of amounts under the Tobacco Master Settlement Agreement.

16) TAXATION POLICIES

Tangible Personal Property Tax Loss Reimbursements

-Excludes units for disabled preschool students, disabled student transportation payments, transfers among districts and educational service centers, and deductions for school choice programs such as open enrollment, community schools, and the Autism Scholarship Program from the base upon which the state education aid offset is calculated. This amount is used to determine direct reimbursement payments for losses districts incur due to the phase-out of business tangible personal property (TPP) taxes. Further clarifies that the base includes the amounts calculated for poverty-based assistance and parity aid, both of which under the bill are included within the base cost calculation.

-Requires ODE to consult with OBM in computing the state education aid offset, requires them to agree on the offset computation, and accelerates the timing of the computation by 15 days.

-Dedicates 70 percent of annual CAT revenue in FY 2019 and thereafter to school funding. Current law commits all post-FY 2018 CAT revenue to the GRF. Makes various technical corrections to existing law’s provisions reimbursing school districts and other taxing units for the phaseout of business personal property taxation.

CHANGE- Eliminates a Senate provision that provides that up to three elections may be held during a calendar year on the question, or any combination of the questions, of levying school district income taxes and school district property taxes.

Homestead Exemption

Expands the homestead exemption to $25,000 of market value for homeowners who are age 65 or older, permanently and totally disabled, or surviving spouses age 59 to 64 of persons who applied and qualified for the tax reduction. Eliminates the current income ceiling for eligibility.

-Makes changes and clarifications in the law to address current recipients of the homestead exemption and owners of manufactured homes.

-Provides that the state reimburse school districts and other local governments for forgone tax receipts. The change would be effective for tax year 2007, paid one year in arrears for owners of real property and concurrently for homeowners whose primary residences are taxed as manufactured or mobile homes.

-Provides additional time to apply for the Homestead Exemption and the roll back in 2007.

-Makes changes in the assessment of tangible personal property leased to a telephone, telegraph, or interexchange telecommunications company, other than in a sale and leaseback transaction and kilowatt-hour tax.

17) EARLY CHILDHOOD EDUCATION

Early Childhood Education ODE GRF 200-408

-Provides $31 million in FY08 and $36 million in FY09 to support city, local, exempted village, joint vocational schools or educational service centers to provide services to children who are at least three years of age and whose family earns not more than 200 percent of the federal poverty guidelines.

Early Learning Initiative ORC Sections 5101.80 and 5101.801

-Establishes the Early Learning Initiative (ELI), jointly administered by the Department of Education (ODE) and ODJFS to provide early learning services through an early learning program, on a full-day and part-day basis, to TANF-eligible children.

-Allocates $125.3 million each year in TANF funds for Early Learning Initiative through TANF. Up to 12,000 enrollment slots shall be available.

-Changes the eligibility requirements for the Early Learning Initiative by removing the work requirement for parents whose children participate in ELI; and the six-month redetermination requirement for the ELI program so that any child who is eligible at the start of a school year may attend for the entire year regardless of changes in family income.

-Provides that an eligible child is a child who is at least three years of age but not of compulsory school age or enrolled in kindergarten, who is eligible for Title IV-A services, and whose family income at the time of application does not exceed 185 percent of the federal poverty line in FY08 or 200 percent of the federal poverty line in FY09.

-Requires each county department of job and family services (CDJFS) to determine eligibility for Title IV-A services for children who wish to enroll in an early learning program within 15 days after the CDJFS receives a completed application.

-Specifies both separate duties for ODJFS and ODE to fulfill for ELI, and joint duties; specifies requirements for operating the program; specifies the terms of contracts.

-Allows Ohio Department of Job and Family Services (ODJFS) to use $12.5 million per year of the federal Child Care and Development Block Grant Act to establish a voluntary child day-care center quality-rating program (Step Up to Quality); permits participating child day-care centers to be eligible for certain assistance; and requires the ODJFS Director to adopt rules to implement this program.

-Postpones from FY08 until FY10 the requirement that teachers for state-funded early childhood education programs established prior to July 1, 2006, have at least associate degrees.

-Requires, ODJFS and the Department of Education, before July 1, 2008, to develop a fiscal model bringing together early care and education programs under one funding system that will provide all children with access to affordable quality care and education.

School Readiness Reimbursements

-Requires that ODJFS use up to $6.5 million of the appropriation item 600-689, TANF Block Grant (Federal Special Revenue Fund 3V6) in each fiscal year, in accordance with certain state law governing the use of TANF dollars, to reimburse providers for intervention services to prepare children for kindergarten.

-Requires that up to $50,000 in each fiscal year of appropriation item 600-689, TANF Block Grant (Fund 3V6), be used to reimburse the Alliance Early Childhood Education Pilot Project.

Expansion of Children’s Health Insurance Program

-Expands the Children’s Health Insurance Program by 19,695 children whose family income is with between 200 percent and 300 percent of the Federal Poverty Guidelines. This is estimated to cost $5.6 million all funds in FY08 and $38.6 million all funds in FY09.

-Authorizes the Children’s Health Insurance Program (CHIP) Part II to include persons under age 19 with family incomes up to 300 percent of the federal poverty guidelines starting not earlier than January 1, 2008.

-Requires ODJFS to seek a federal waiver to provide the expanded coverage as the Children’s Health Insurance Program Part III and requires ODJFS to charge premiums as a condition of participating in the program.

18) BOARD OF REGENTS

-Provides support for the Partnership for Continued Learning, the Midwest Higher Education Compact, the Ohio Learning Network, and the Articulation and Transfer Council. Specifies that the BOR in consultation with the Governor and the ODE, convene a work group to establish coursework for content knowledge and teacher competencies for early care and education degrees.

College Readiness and Access

-Provides $12.6 million in FY08 and the same in FY09 through appropriation item 235-434, College Readiness and Access, to support programs designed to improve the academic preparation and increase the number of students that enroll and succeed in higher education. This includes $3.5 million in each fiscal year to support the Early College High School Program.

Teacher Improvement Initiatives

-Provides $4.7 million in FY08 and $11.2 million in FY09 through appropriation item 235-435, Teacher Improvement Initiatives, to support the Teacher Quality Partnerships study; the Ohio Resource Center for Mathematics, Science, and Reading; ten regional summer academies for 11th and 12th grade students; signing bonuses for teachers employed in hard to staff schools; and the loan forgiveness program for individuals entering the teaching profession.

Ohio Innovative Partnership

-Establishes the Ohio Innovation Partnership consisting of two competitive grant programs: the Choose Ohio First Scholarship Program line item 235-438, which provides $50 million in FY08 and $50 million in FY09; and the Ohio Research Scholars Program line item 235-439, which provides $30 million in FY08 and $20 million in FY09 through Third Frontier bond money, Department of Development - Ohio Research Scholars Program. Distribution of the scholarships is outlined in permanent law, ORC Sections 3333.60 through 3333.70, 3333.38, 3345.32, Sections 375.20.76, 375.20.77.

-Requires the Chancellor, subject to approval of the Controlling Board, to make competitive awards under the Ohio Innovation Partnership to 13 state universities and the Northeastern Ohio Universities College of Medicine (NEOUCM) for programs and initiatives to recruit students and scientists in the fields of science, technology, engineering, math, and medicine or STEM education in order enhance regional educational economic strengths and meet the needs of the state’s regional economies.

NEW- Allows the Chancellor to provide a portion of the award for a collaborative program or initiative directly to collaborating institutions.

CHANGE-Requires the Chancellor to assign a number of Choose Ohio First Scholarships to selected four-year institutions of higher education for initiatives to recruit Ohio residents as students in STEM fields or STEM education. Permits private four-year institutions to submit proposals for Choose Ohio First Scholarships as long as the proposal will be implemented in collaboration with a public four-year institution. Sets the minimum scholarship as $1,500 and the maximum scholarship as one-half of the highest instate undergraduate tuition charged by all state universities (except Miami University). Stipulates that the scholarships are student-centered state grants to students for attending four year institutions of higher education, and are not state grants to four-year institutions of higher education.

-Requires the Chancellor to establish a competitive process for making awards and evaluate each proposal based on specified criteria.

-Requires the Chancellor to endeavor to make awards so that the statewide aggregate non-state money pledged to the proposals in each fiscal year equals at least 100 percent of awarded funds under the Ohio Innovation Partnership and to endeavor to distribute awards so that all regions of the state will benefit and students from all regions can participate in the Choose Ohio First Scholarship Program. Requires the Chancellor to endeavor to make awards such that at least 50 percent of the students receiving Choose Ohio First Scholarships participate in co-ops or internships in private industry or university laboratories; and requires the value of the co-ops and internships be counted as other resources pledged toward the proposal.

-Requires each state university, college, or collaborating institutions receiving an award under the Ohio Innovation Partnership to enter into an agreement governing the use of the award with the Chancellor.

-Requires the Chancellor to submit an annual report on the academic and economic impact of the Ohio Innovation Partnership. Requires that the report include progress and performance metrics for each initiative that received an award in the previous fiscal year and economic indicators for all initiatives as a whole. Specifies that the first report is due on December 31, 2008. Requires the report to include the Chancellor’s strategy in assigning Choose Ohio First Scholarships among the institutions and how the actual awards fit that strategy.

Statewide Purchasing Consortium

VETOED - NEW -Creates the Higher Education Statewide Purchasing Consortium to be administered by the Inter-University Council of Ohio. Requires all state institutions of higher education to participate in the Consortium and enter into price agreements offered by the Consortium. Requires the Chancellor of the Board of Regents to certify any cost savings reported by members of the Consortium as savings achieved through internal efficiencies required for receiving state share of instruction subsidy increases over what they received in the prior year.

NEW- Removes certain Senate provisions pertaining to co-located technical colleges.

-Maintains GRF appropriation items 235-415, Jobs Challenge; 235-418, Access Challenge; 235-420, Success Challenge; and 235-433, Economic Growth Challenge. Requires BOR to study the effectiveness and appropriateness of these programs. Requires the study to focus on the student-based funding, the current workforce development needs, and incentives for student success in the context of a knowledge-based economy. Requires the Chancellor to report the findings of the study to the Governor and the General Assembly by May 31, 2008.

-Freezes in-state undergraduate instructional and general fees in both FY08-09.

-Specifies the formula to distribute the State Share of Instruction (SSI) through appropriation line item 235-501. Total $1.67 billion in FY08 and $1.84 billion in FY09.

-Guarantees each state institution in FY08 and FY09 to receive the same amount of SSI funding as received in the prior year. The overall appropriation (including the earmarked funding) for SSI increases by 5.6 percent in FY08 and 9.8 percent in FY09. State supported institutions will also receive a proportional share of the total appropriation increase in each fiscal year, based on the demonstration of one percent savings in FY08 and three percent savings in FY09.

CHANGE - Requires the Chancellor to develop the formula for increasing SSI funding each fiscal year for community colleges, state community colleges, and technical colleges, and incorporate the enrollment growth, a funding guarantee, and the requirements of 1 percent and 3 percent savings through identified internal efficiencies.

-Earmarks $58 million in FY08 and $60 million in FY09 of 235-501, State Share of Instruction, as a subsidy to be distributed based on each campus’ proportional share of the total in-state undergraduate instructional and general fees for fiscal year 2007.

-Requires BOR, in consultation with the Department of Development, to commission a study on the needs of the business community relative to higher education in Ohio, including necessary skills and talents required by the business community. Requires the study to be completed by December 31, 2007.

-Requires BOR, in consultation with state supported institutions of higher education, to develop a plan by March 31, 2008 that addresses five specific areas of higher education: access, success, affordability, research and development support, and higher education awareness.

-Requires BOR, in consultation with state supported institutions of higher education, to study the feasibility of establishing and implementing a tuition flexibility plan by December March 31, 2008.

-Requires that GRF appropriation item 235-531, Student Choice Grants in FY08 and FY09 operate with current eligibility requirements. Increases student choice grant appropriations to $38.5 million in each year.

-Grants matching state funds to the James A. Rhodes Leadership Foundation contingent upon it raising $10 million in funds from nonstate resources, and specifies qualifications for scholarships.

19) MISCELLANEOUS PROVISIONS

Annual Report of Salaries

-Requires ODE, in consultation with the State Employment Relations Board, to prepare and submit to the General Assembly an annual report of each school district’s employee salary and fringe benefit expenditures and employer and employee contributions to the total fringe benefit costs.

Adult Basic Literacy Moved to BOR

-Requires ODE to work with the Board of Regents and the Governor’s Workforce Policy Board to develop a plan by July 1, 2008 that transfers adult basic and literacy education (ABLE) programs and “adult career-technical education programs” from the Ohio Department of Education to the Board of Regents. Requires the transfer to be made by January 1, 2009.

Mahoning JVSD

-Allows Mahoning JVSD to receive state funding under certain conditions for lost instructional days due to fire.

PARTIAL VETO - Section 293.30. Abstinence and Adoption Education

Provides through item 440-425, Abstinence and Adoption Education, support for abstinence and adoption education. The Director of Health shall develop guidelines for the establishment of abstinence and adoption education programs for teenagers with the purpose of decreasing unplanned pregnancies and abortion. Removed the provision that requires that the guidelines be developed pursuant to Title V of the “Social Security Act,” 42 U.S.C. 510, and shall include, but are not limited to, advertising campaigns and direct training in schools and other locations.

School Employees’ Health Care Benefits System

Repeals the language that delays the implementation of the School Employees’ Health Care Benefits System as enacted in Am. Sub. H.B. 66 of the 126th General Assembly. Specifies in uncodified law that the board be comprised of twelve members, six appointed by the Governor, three of whom are currently non-administrative school employees, and three each appointed by the President of the Senate and Speaker of the House of Representatives. Requires that at least one of the three members appointed by the President and Speaker be of the minority. (Under current law the board is comprised of nine members.)

PARTIAL VETO - Section 9.901 - School Employees Health Care Board Duties