As Introduced

136th General Assembly

Regular Session H. B. No. 698

2025-2026

To amend sections 113.70, 113.73, 3345.45, and 3345.454; to enact sections 107.037, 3345.0220, 3345.0221, and 3345.0222; and to repeal section 3345.456 of the Revised Code to enact the S.B. 1 Compliance Supplemental Appropriation Act regarding the operation of state institutions of higher education.

BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO:

Section 1. That sections 113.70, 113.73, 3345.45, and 3345.454 be amended and sections 107.037, 3345.0220, 3345.0221, and 3345.0222 of the Revised Code be enacted to read as follows:

Sec. 107.037. As used in this section, "state institution of higher education" has the same meaning as in section 3345.011 of the Revised Code.

The governor shall ensure that among the various budget recommendations made by the governor and the director of budget and management to the general assembly each biennium there are recommendations to set aside a portion of the state share of instruction funds for state institutions of higher education for the purposes of sections 3345.0220 and 3345.0222 of the Revised Code. The state share of instruction funds in that set aside shall be calculated and distributed in the same manner as any other state share of instructions funds, except that their release to each state institution is subject to those sections.

Sec. 113.70. As used in sections 113.70 to 113.77 of the Revised Code:

(A) "Expenditure" means a payment, distribution, loan, advance, reimbursement, deposit, or gift of money from a state entity to any supplier.

(B) "Political subdivision" means a county, city, village, public library, township, park district, school district, regional water and sewer district, or regional transit authority.

(D) "School district" means a city, local, exempted village, or joint vocational school district; a science, technology, engineering, and mathematics school established under Chapter 3326. of the Revised Code; or an educational service center. "School district" does not mean a community school established under Chapter 3314. of the Revised Code.

(E) "State entity" means the general assembly, the supreme court, the court of claims, the office of an elected state officer, or a department, bureau, board, office, commission, agency, institution, instrumentality, or other governmental entity of this state established by the constitution or laws of this state for the exercise of any function of state government, but excludes a political subdivision, an institution of higher education, a state retirement system, and the city of Cincinnati retirement system. "State entity" does not include the nonprofit corporation formed under section 187.01 of the Revised Code.

(F) "State institution of higher education" has the same meaning as in section 3345.011 of the Revised Code.

(G) "State retirement system" means the public employees retirement system, the Ohio police and fire pension fund, the state teachers retirement system, the school employees retirement system, and the state highway patrol retirement system.

~~(G)~~(H) "Supplier" means any person, partnership, corporation, association, organization, state entity, or other party, including any executive officer, legislative officer, judicial officer, or member or employee of a state entity, that does either of the following:

(1) Sells, leases, or otherwise provides equipment, materials, goods, supplies, or services to a state entity pursuant to a contract between the supplier and a state entity;

(2) Receives reimbursement from a state entity for any expense.

Sec. 113.73. (A) The Ohio state and local government expenditure database shall include the following features:

(1) A searchable database of all expenditures;

(2) The ability to filter expenditures by the following categories:

(a) The category of expense;

(b) The Ohio administrative knowledge system accounting code for a specific good or service.

(3) The ability to search and filter by any of the factors listed in section 113.72 of the Revised Code;

(4) The ability to aggregate data contained in the database;

(5) The ability to determine the total amount of expenditures awarded to a supplier by a state entity;

(6) The ability to download information obtained through the database;

(7) A searchable database of state ~~and~~ , school district, and state institution of higher education employee salary and employment information.

(B) The information required under division (A)(7) of this section shall be provided by the department of administrative services or, the department of education and workforce, or a state institution of higher education, as applicable.

Sec. 3345.0220. (A) As used in this section, "state institution of higher education" has the same meaning as in section 3345.011 of the Revised Code.

(B) Each state institution of higher education shall annually certify compliance with sections 3333.045, 3345.029, 3345.0216, 3345.0217, 3345.382, 3345.451, 3345.453, and 3345.591 of the Revised Code. Each state institution shall certify its compliance to the chancellor of higher education as follows:

(1) For fiscal year 2027, on the effective date of this section;

(2) For fiscal year 2028 and each fiscal year thereafter, by the first day of July of that fiscal year.

(C) For fiscal year 2028 and each fiscal year thereafter, the chancellor shall withhold a state institution's portion of any state share of instruction funds in the set aside for that fiscal year for the purposes of this section if that institution fails to file a certification in that fiscal year as required under this section.

(D) The chancellor may audit institutional records, require documentation, and conduct reviews to verify a state institution's certification.

(E)(1) A recklessly false or fraudulent certification constitutes noncompliance with this section. For fiscal year 2028 and each fiscal year thereafter, a recklessly false or fraudulent certification constitutes grounds for the chancellor to withhold the entirety of a state institution's portion of any state institution's state share of instruction funds in the set aside for that fiscal year for the purposes of this section.

(2) A recklessly false or fraudulent certification may subject the state institution or responsible officers to civil penalties.

(F) Any state share of instruction funds withheld from a state institution under this section for a fiscal year shall not be released regardless of subsequent compliance with this section.

Sec. 3345.0221. (A) As used in this section:

(1) "State institution of higher education" has the same meaning as in section 3345.011 of the Revised Code.

(2) "Substantially different duties" means material changes in primary responsibilities or supervisory authority. "Substantially different duties" does not include temporary assignments, title changes, or minor duty adjustments.

(B) No state institution of higher education shall reassign, reclassify, or otherwise disguise any position to continue diversity, equity, and inclusion functions prohibited by section 3345.0217 of the Revised Code.

(C) Each state institution shall prepare an inventory of all employees who, on January 1, 2025, performed diversity, equity, and inclusion functions and who were reassigned on or before September 25, 2025. The inventory shall include:

(1) Employee name, title, and unit;

(2) Prior duties related to diversity, equity, and inclusion;

(3) Reassignment details;

(4) Salary changes;

(5) New duties;

(6) Attestation of accuracy by the chief human resources officer and general counsel.

(D)(1) For each employee described in division (C) of this section, a state institution shall prepare a justification report containing:

(a) A narrative explanation of the employee's reassignment;

(b) Proof that the employee's reassignment consists of substantially different duties from diversity, equity, and inclusion functions;

(d) Attestation of accuracy by the institution's general counsel;

(e) Itemized compensation breakdown;

(f) Compliance plan for ongoing review;

(g) Certification by the president and chair of the board of trustees.

(2) The chancellor of higher education shall determine whether the evidence submitted by an institution under division (D)(1)(b) of this section sufficiently establishes that an employee's new duties are substantially different from diversity, equity, and inclusion functions. The chancellor shall make this determination using a preponderance of the evidence standard.

(E) Each state institution of higher education shall submit the inventories and reports described in divisions (C) and (D) of this section to the chancellor not later than ninety days after the effective date of this section. Beginning with fiscal year 2028, each state institution shall submit updated inventories and reports regarding employees described in division (C) of this section annually not later than the first day of July.

(F) Inventories and reports submitted by state institutions under this section are public records.

Sec. 3345.0222. (A) As used in this section, "state institution of higher education" has the same meaning as in section 3345.011 of the Revised Code.

(B) The president of a state institution of higher education and the chair of the board of trustees of the institution shall sign each certification, inventory, and report submitted by the institution as required under sections 3345.0220 and 3345.0221 of the Revised Code.

(C) If a state institution of higher education fails to comply with the requirements of sections 3345.0220, 3345.0221, or 3345.454 of the Revised Code as amended or enacted by this act in a fiscal year, for fiscal year 2028 and each fiscal year thereafter, the chancellor of higher education shall withhold a state institution's portion of any state share of instruction funds in the set aside for that fiscal year for the purposes of this section.

(D) Any state share of instruction funds withheld from a state institution of higher education under this section shall not be released regardless of subsequent compliance with this section.

Sec. 3345.45. (A) ~~The chancellor of higher education jointly with all state institutions~~ The board of trustees of each state institution of higher education, as defined in section 3345.011 of the Revised Code, shall ~~develop standards for~~ adopt an instructional ~~workloads~~ workload policy for full-time and part-time faculty ~~in keeping with the institutions' missions and with special emphasis~~ that maintains a primary emphasis on ~~the~~ undergraduate ~~learning experience. The standards shall contain clear guidelines for institutions to determine a range of acceptable undergraduate teaching by faculty~~instruction. An instructional workload policy shall not establish a minimum workload that falls below the prevailing Ohio standards for undergraduate instruction. The chancellor of higher education shall not prescribe alternative ranges or minimum standards for instructional workload policies.

~~(B) The board of trustees of each state institution of higher education shall take formal action to adopt a faculty workload policy consistent with the standards developed under this section.~~

~~(C)(1)~~(B)(1) The board of trustees of each state institution of higher education shall review the institution's policy on faculty tenure and update that policy to promote excellence in instruction, research, service, or commercialization, or any combination thereof.

(2) As a condition for a state institution of higher education to receive any state funds for research that are allocated to the department of higher education under the appropriation line items referred to as either "research incentive third frontier fund" or "research incentive third frontier-tax," the chancellor shall require the institution to include multiple pathways for faculty tenure, one of which may be a commercialization pathway, in its policy.

~~(D)(1)~~(C)(1) At least once every five years, each state institution of higher education shall update its faculty workload policy and submit the policy to the chancellor. The updated policies shall be approved by the state institution's board of trustees each time it is submitted to the chancellor.

(2) Each state institution of higher education's faculty workload policy shall include all of the following:

(a) An objective and numerically defined teaching workload expectation based on credit hours as defined in 34 C.F.R. 600.2;

(b) A definition of all faculty workload elements in terms of credit hours as defined in 34 CFR 600.2 with a full-time workload minimum standard established by the board of trustees and made publicly accessible on the state institution's web site;

(c) A definition of justifiable credit hour equivalents for activities other than teaching, including research, clinical care, administration, service, and other activities as determined by the state institution of higher education;

(d) Administrative action that a state institution of higher education may take, including censure, remedial training, for-cause termination, or other disciplinary action, regardless of tenure status, if a faculty member fails to comply with the policy's requirements. Termination under these circumstances requires the recommendation of the dean, provost, or equivalent official, concurrence of the state institution of higher education's president, and approval of the state institution of higher education's board of trustees.

Sec. 3345.454. ~~This section applies only to state institutions of higher education that have tenured faculty members.~~

(A) As used in this section:

(1) "State institution of higher education" has the same meaning as in section 3345.011 of the Revised Code.

(2) "Retrenchment" means a process by which a state institution of higher education reduces programs or services, thus resulting in a temporary suspension or permanent separation of one or more institution faculty, to account for a reduction in student population or overall funding, a change to institutional missions or programs, or other fiscal pressures or emergencies facing the institution.

(3) "Faculty" means any employee holding a full-time faculty appointment at a state institution of higher education, regardless of tenure status, rank, track, or title.

(4) "Academic unit" means any college, school, department, program, division, or other organizational unit within a state institution of higher education.

(B) In addition to the policies described in sections 3345.45 to 3345.453 of the Revised Code, each state institution of higher education board of trustees shall develop policies on tenure and retrenchment consistent with this section. ~~Each state institution shall submit those policies to the chancellor of higher education. Each state institution's board of trustees shall update those policies every five years.~~

(C)(1) Not later than ninety days after the effective date of this amendment, each state institution of higher education board of trustees shall adopt a retrenchment policy that specifies all of the following:

(a) That the authority to initiate retrenchment is held by the board of trustees;

(b) That the board of trustees may delegate its authority to initiate retrenchment to the president or provost of the institution;

(d) That the provost, in consultation with the president, shall administer and complete the retrenchment process subject to any parameters imposed by the board of trustees;

(e) That retrenchment may be initiated for any lawful academic or operational reason determined by the board of trustees, including enrollment stagnation or decline, program reduction or discontinuation, organizational restructuring, business necessity, institutional strategic realignment, financial emergency, or other lawful reasons;

(f) That before finalizing retrenchment decisions, the provost shall consider relevant factors that affect the institution and students, including program interdependence, student completion pathways, feasibility of phased reductions, academic reputation, alternative organizational arrangements, potential redeployment of affected faculty, and attrition or voluntary separation as alternatives to retrenchment;

(g) That the provost's consideration of relevant factors under division (C)(1)(f) of this section does not create enforceable rights beyond those expressly provided in the policy and this section;

(h) That selection, retention, and non-displacement standards may affect multiple faculty positions;

(i) That when fewer than all faculty positions within an academic unit are retrenched, the institution shall retain faculty members the provost determines are best qualified to meet programmatic, curricular, and institutional needs;

(j) Except as provided in division (C)(2) of this section, that seniority, tenure, rank, or length of service do not confer a right of retention;

(k) That a faculty member whose position is selected for retrenchment may not displace or bump another faculty member;

(l) That a faculty member whose position is selected for retrenchment shall receive written notice in a form and at a time determined by the board of trustees and set forth in the policy;

(m) That during the notice period specified by the board of trustees in the policy under division (C)(1)(l) of this section, a faculty member shall remain subject to applicable institutional policies and performance expectations unless relieved of duties by the institution;

(n) That a faculty member whose position is selected for retrenchment shall receive procedural protections substantially similar to those historically afforded by the institution, including written notice identifying the position selected for retrenchment and effective date, an opportunity to meet with a designated administrator to discuss the retrenchment decision as it relates to the faculty member's position, and a limited internal review or appeal process confined to whether the institution materially complied with its policy and this section;

(o) That retrenchment is not a disciplinary action and no review may substitute the board of trustee's judgment regarding academic, programmatic, or institutional needs;

(p) That the board of trustees may approve a buyout program, voluntary separation incentive, or other negotiated separation arrangements for faculty positions subject to retrenchment when the board determines those arrangements to be cost effective or in the best financial or operational interests of the institution;

(q) That participation in programs described in division (C)(1)(p) of this section is voluntary unless otherwise authorized by law;

(r) The provost may adopt written procedures to implement retrenchment, including timelines, documentation standards, verification processes, and notice formats;

(s) Any procedures adopted by the provost pursuant to division (C)(1)(r) of this section shall be publicly accessible.

(2) A policy on retrenchment adopted under division (C)(1) of this section shall specify that a faculty member whose position is selected for retrenchment who, at the time the faculty member receives notice of the selection, has at least thirty but not more than thirty-five years of service credit in a state retirement system shall be exempt from retrenchment until the faculty member attains thirty-five years of service credit. The policy shall require verification of the faculty member's service credit within fifteen days after the faculty member receives notice that the member's position has been selected for retrenchment. Consistent with section 3345.454 of the Revised Code, division (C)(2) of this section prevails over any conflicting provision of a collective bargaining amendment entered into on or after the effective date of this amendment.

(D) Each state institution of higher education's board of trustees shall update a policy adopted under this section not less than once every five years. Whenever a state institution of higher education board of trustees adopts or modifies a policy under this section, the board of trustees shall submit it to the chancellor of higher education.

(E) The chancellor shall review each retrenchment policy submitted under this section to determine whether the policy complies with the requirements of this section. If the chancellor determines that a submitted retrenchment policy complies with this section, the chancellor shall notify the board of trustees of the determination. If the chancellor determines that a submitted policy does not comply with this section, the chancellor shall notify the board of trustees in writing and identify the specific provisions that fail to comply. The chancellor's review under this division shall be limited to determining compliance with the requirements of this section and shall not include approval, disapproval, or modification of the substantive academic, managerial, or strategic judgments in the policy.

(F) A board of trustees that receives a notice of noncompliance under division (E) of this section shall revise and resubmit the policy not more than sixty days after receipt of the notice of noncompliance.

(G) If a retrenchment policy has been in place for less than five years and has been determined by the chancellor to be in compliance with this section, the chancellor is prohibited from changing that determination unless the policy is updated or this section is amended.

(H) Nothing in this section shall be construed to limit or otherwise impair the authority of a board of trustees of a state institution of higher education to adopt, amend, or enforce additional provisions relating to retrenchment that do not conflict with this section. The authority to determine, implement, and administer retrenchment policies and decisions rests with the board of trustees, including authority delegated by the board to the president or provost. This section establishes minimum statewide requirements and shall not be construed to prohibit a board of trustees from exercising broader or more specific authority with respect to retrenchment.

(I) A state institution of higher education shall eliminate any undergraduate degree program it offers if the institution confers an average of fewer than five degrees in that program annually over any three-year period. A state institution shall not consider any academic year prior to the first academic year in which an undergraduate degree is conferred in determining whether this division applies to the program offering that degree.

The chancellor may grant a waiver to a state institution for a program to which this division applies. State institutions shall appeal for a waiver in a form and manner determined by the chancellor. If the chancellor grants a waiver to a state institution, the chancellor shall establish terms under which the state institution may conditionally continue the program, including whether the program is eligible to be supported by state share of instruction funds.

Section 2. That existing sections 113.70, 113.73, 3345.45, and 3345.454 of the Revised Code are hereby repealed.

Section 3. That section 3345.456 of the Revised Code is hereby repealed.

Section 4. (A) As used in this section, "state university" has the same meaning as in section 3345.011 of the Revised Code.

(B) On the effective date of this section, the Chancellor of Higher Education shall determine whether each state university is in compliance with section 3345.0220 of the Revised Code. If the Chancellor determines that a state university is noncompliant with that section, the Chancellor shall withhold the state university's portion of the state share of instruction funds in the set aside in division (B)(1)(c) of Section 381.250 of H.B. 96 of the 136th General Assembly, beginning with the first disbursement that occurs after the determination is made.

(C) Ninety-one days after the effective date of this section, the Chancellor shall determine whether each state university is in compliance with sections 3345.0220, 3345.0221, 3345.0222, and 3345.454 of the Revised Code. If the Chancellor determines that a state university is noncompliant with any of those sections, the Chancellor shall withhold the state university's portion of the state share of instruction funds in the set aside in division (B)(1)(c) of Section 381.250 of H.B. 96 of the 136th General Assembly, beginning with the first disbursement that occurs after the determination is made.

(D) If, at any time following a determination made under division (B) or (C) of this section, the Chancellor becomes aware of potential noncompliance by a state university of any section of the Revised Code for which a determination was made, the Chancellor may investigate compliance at the state university and make an additional determination. If the Chancellor determines that a state university is noncompliant with one of the applicable sections, the Chancellor shall withhold the state university's portion of the state share of instruction funds in the set aside in division (B)(1)(c) of Section 381.250 of H.B. 96 of the 136th General Assembly, beginning with the first disbursement that occurs after the additional determination is made.

(E) At any time following a determination made under division (B), (C), or (D) of this section, a state university that has been determined noncompliant may request an additional determination from the Chancellor to evaluate whether the state university has resolved the noncompliance. If the Chancellor determines that a state university has become compliant, the Chancellor shall resume disbursing the state university's portion of the state share of instruction funds in the set aside in division (B)(1)(c) of Section 381.250 of H.B. 96 of the 136th General Assembly, beginning with the first disbursement that occurs after the new determination is made.

(E) Any state share of instruction funds withheld from a state institution under this section shall not be released regardless of subsequent compliance determinations.

Section 5. This act shall be known as the S.B. 1 Compliance Supplemental Appropriation Act.