HB 698 Analysis

FUNDING

HB 698 requires the Governor to “ensure” that future executive budgets set aside a portion of the State Share of Instruction (SSI) for institutional compliance. This directive raises separation-of-powers concerns, as the General Assembly is effectively instructing the Governor regarding budget recommendations. While the Ohio Constitution requires the Governor to submit a budget, the General Assembly retains ultimate authority to amend and pass appropriations legislation.

If the legislature wishes to condition SSI funding on compliance requirements, it may do so through the standard operating budget process.

• In FY 2027, $75 million in SSI was set aside in HB 96 for SB 1 compliance.
• HB 698 creates new compliance requirements, outlines a compliance process, and grants the Chancellor investigatory and determination authority.
• Future SSI set-aside amounts would be determined through the biennial budget process.

COMPLIANCE

Institutions must certify compliance within 90 days of enactment and annually by July 1 thereafter. The short timeline raises practical implementation concerns.

• Institutions that fail to certify compliance will have their SSI set-aside funds withheld for the fiscal year, even if compliance is later achieved.
• The Chancellor may audit records, require documentation, and conduct compliance reviews.
• If a compliance report is deemed recklessly false or fraudulent, withheld funds cannot be restored, and civil penalties may apply.
• Even after compliance is confirmed, the Chancellor may investigate subsequent alleged violations and withhold funding beginning with the first disbursement following a finding of non-compliance.

WORKLOAD

HB 698 significantly expands upon SB 1’s workload provisions and increases institutional authority to terminate faculty—including tenured faculty—for failure to meet workload policies.

• Faculty not meeting workload requirements may be censured, required to undergo remediation, or terminated for cause, regardless of tenure status.
• HB 698 removes the Chancellor’s joint authority (under SB 1) to develop instructional workload standards with institutions and grants boards of trustees (BoTs) exclusive authority.
• It eliminates flexibility previously built into standards requiring a “range of acceptable undergraduate teaching” and prohibits minimum workload standards below current levels.
• The Chancellor is prohibited from establishing alternative ranges or standards.

SB 1 required a “special emphasis” on undergraduate learning, allowing flexibility for research and other academic responsibilities. HB 698 instead requires a “primary emphasis” on undergraduate instruction—a phrase that may carry legal implications, potentially suggesting more than 50% of workload time. Unlike prior standards, HB 698 codifies rigidity and removes administrative flexibility to adapt standards without legislative action.

RETRENCHMENT

HB 698 prescribes a detailed retrenchment framework, going beyond SB 1. While SB 1 removed retrenchment from collective bargaining, it did not dictate process. HB 698 does so explicitly and excludes faculty from any defined decision-making role, further eroding shared governance.

• BoTs must adopt retrenchment policies within 90 days, following statutory minimum requirements that function as a model policy.
• The bill explicitly allows BoTs to exceed statutory minimums.
• BoTs have exclusive authority to initiate retrenchment and may delegate implementation to the president or provost. Deans may recommend but not initiate.
• The Chancellor reviews policies for compliance; non-compliant policies must be corrected within 60 days.

Expanded Triggers

HB 698 allows retrenchment for “any lawful academic or operational reason” determined by the BoT, including:

• Enrollment stagnation or decline
• Program reduction or discontinuation
• Organizational restructuring
• Business necessity
• Strategic alignment
• Financial emergency
• Any other lawful reason

These terms are broad and grant significant discretion. “Enrollment stagnation” lowers the threshold from SB 1’s “declining enrollment” standard and may not require multi-year decreases. “Organizational restructuring” could encompass virtually any administrative change.

Retention and Protections

• Seniority, tenure, rank, and length of service (except the 30/35-year provision) confer no retention rights.
• Faculty may not displace or “bump” others.
• Retrenchment is explicitly not performance-based; exceptional performance cannot justify retention.
• Procedural protections must be “substantially similar” to those historically provided, but “historically” is undefined.
• Appeals are limited to whether the institution “materially” complied with its policy and statute—a standard that may allow broad administrative discretion.

Voluntary separation agreements and buyouts are permitted but must be deemed cost-effective or in the institution’s financial or operational interest—terms that are undefined and discretionary.

DEI PROVISIONS

HB 698 reflects legislative concern that institutions are continuing diversity, equity, and inclusion (DEI) activities.

Institutions are prohibited from reassigning or reclassifying positions to continue DEI functions. They must inventory employees who performed DEI functions as of January 1, 2025, and were reassigned by September 25, 2025.

The reporting requirements are extensive and include:

• Employee identifying information
• Prior DEI-related duties
• Reassignment details
• Salary changes
• New duties
• HR and general counsel attestations

Each employee requires a justification report including:

• Narrative explanation of reassignment
• Proof of substantially different duties
• Side-by-side job comparisons
• Compensation breakdown
• Ongoing compliance plan
• Attestation by general counsel

The president and BoT chair must certify the inventory. The Chancellor determines whether new duties are “substantially different” under a preponderance-of-the-evidence standard.

These provisions are administratively burdensome and could discourage reassignment of former DEI employees. Because many former DEI staff come from historically underrepresented groups, the targeting and tracking provisions may raise potential Title VII concerns if they result in differential treatment based on protected characteristics. The public reporting requirement could also expose individuals to harassment.

EMPLOYEE TRACKING

HB 698 adds employees of state institutions of higher education to the searchable state and school employee database (Ohio Checkbook), expanding public access to salary and employment data.