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Bill Summary · SB 342

Overview

SB 342, introduced in the 136th General Assembly of Ohio, seeks to limit the terms that a conservancy district’s board of directors may include in contracts for the procurement of goods or services. Specifically, the bill prohibits certain provisions and makes any prohibited term void ab initio, while allowing the contract to remain enforceable without the invalid term. The bill is sponsored by Sens. Landis and Chavez.

Purpose and Intent

  • Main goal: Prevent conservancy districts from imposing certain burdens or legal constraints on themselves via procurement contracts. The aim is to reduce the district’s exposure to indemnification obligations, altered venue, restricted liability, and other terms that could impose unforeseen or unfavorable conditions on the district.

Key Provisions

A contract for goods or services entered into by a conservancy district may not include, unless required or permitted by law:

  1. Indemnification or hold-harmless provisions benefiting another person.
  2. Venue provisions naming a dispute location outside a proper Ohio court.
  3. Provisions limiting the district’s liability for direct losses due to negligence, willful misconduct, fraudulent acts, recklessness, or other torts, or otherwise imposing an indemnification obligation on the district.
  4. Terms that bind the district to conditions unknown at signing, not specifically negotiated, unilaterally changeable by the other party, or electronically accepted by a district employee.
  5. Provisions inconsistent with the district’s public records obligations.
  6. Provisions that limit the district’s ability to recover costs for a replacement contractor.
  • If a contract contains any prohibited term, the term is void ab initio (invalid from the outset). The contract remains enforceable as if the term never existed.

Affected Entities and Scope

  • Affects conservancy districts and their boards of directors when procuring goods or services.
  • Does not apply to terms already required or permitted by state or federal law.
  • The bill does not alter a district’s general ability to contract; it only excludes certain contractual terms.

Procedural and Timeline Considerations

  • Effective date: Not specified in the text provided, but the bill’s analysis references similar constraints to other Ohio provisions and notes about retroactivity considerations.
  • Retrospective effect: The bill does not explicitly provide a retroactive exemption for contracts in place before its effective date. Constitutional considerations regarding retroactivity and obligations of contracts may influence applicability to pre-existing contracts.

Fiscal and Local Impact

  • Fiscal note indicates there is no direct fiscal impact on conservancy districts, the state, or political subdivisions.
  • The potential effect is primarily indirect savings if indemnification or problematic terms are avoided, though such cases are likely infrequent and highly case-specific.
  • Overall, the changes are not expected to alter daily operations or revenue sources of conservancy districts significantly.

Summary

SB 342 would tighten the terms that conservancy districts can accept in procurement contracts by prohibiting indemnification, certain venue, liability-limiting, and other potentially unfavorable provisions. Prohibited terms are void from the outset, though the contract remains otherwise enforceable. The bill aims to provide greater protection for conservancy districts in contracting while preserving their ability to enter into agreements with vendors that will not negotiate terms.

Compiled from official sources — confirm details with the bill’s official record.

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