Notwithstanding any provision of the Revised Code to the contrary, and except as otherwise specified in division (E) of this section, a municipal school district shall be subject to this section instead of section 3319.17 of the Revised Code with respect to suspension of teacher contracts, but sections 3311.72, 3319.17, and 3319.171 of the Revised Code shall apply to the district with respect to suspension of contracts of other district employees who may be licensed by the state board of education.

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(A) When, for any of the following reasons that apply to a municipal school district, the district board of education decides that it will be necessary to reduce the number of teachers it employs, it may make a reasonable reduction:

(1) Return to duty of regular teachers after leaves of absence, including leaves of absence provided pursuant to section 3319.13 or 3319.14 of the Revised Code;

(2) Decreased enrollment of students in the district;

(3) Academic reasons resulting in consolidation of teaching positions, duties, or functions or resulting in changes in educational programs;

(4) Financial reasons;

(5) Territorial changes affecting the district.

(B) In making any such reduction, the board shall proceed to suspend contracts in accordance with the recommendation of the district’s chief executive officer and divisions (B)(1) and (2) and (E) of this section.

(1) Each teacher affected by the reduction, based on area of licensure, shall be placed in one of the following categories:

(a) Category 1A, which shall contain all teachers on limited or extended limited contracts with a composite evaluation rating of ineffective;

(b) Category 1B, which shall contain all teachers on continuing contracts with a composite evaluation rating of ineffective;

(c) Category 2A, which shall contain all teachers on limited or extended limited contracts with a composite evaluation rating of developing;

(d) Category 2B, which shall contain all teachers on continuing contracts with a composite evaluation rating of developing;

(e) Category 3A, which shall contain all teachers on limited or extended limited contracts with a composite evaluation rating of skilled;

(f) Category 3B, which shall contain all teachers on continuing contracts with a composite evaluation rating of skilled;

(g) Category 4A, which shall contain all teachers on limited or extended limited contracts with a composite evaluation rating of accomplished;

(h) Category 4B, which shall contain all teachers on continuing contracts with a composite evaluation rating of accomplished.

(2) Consistent with division (E) of this section, reductions in the affected area of licensure shall be made starting with teachers in category 1A and shall proceed sequentially through teachers in category 4B, until all necessary reductions have occurred.

(3) The evaluation ratings specified in division (B)(1) of this section refer to composite evaluation ratings assigned to a teacher in accordance with the evaluation procedures adopted under section 3311.80 of the Revised Code.

(C) On a case-by-case basis, in lieu of suspending a contract in whole, the board may suspend a contract in part, so that an individual is required to work a percentage of the time the employee otherwise is required to work under the contract and receives a commensurate percentage of the full compensation the employee otherwise would receive under the contract.

(D) The teachers whose contracts are suspended by the board pursuant to this section shall have the right of restoration by the board if and when teaching positions become vacant or are created, for which the teachers are or become qualified within three years after the date of the suspension of contract. Consistent with division (E) of this section, the board shall rehire teachers in the affected area of licensure starting with teachers in category 4B and shall proceed sequentially through teachers in category 1A, until all vacant positions have been filled. No teacher whose contract has been suspended pursuant to this section shall lose the right of restoration by reason of having declined recall to a position that is less than full-time or, if the teacher was not employed full-time just prior to suspension of the teacher’s continuing contract, to a position requiring a lesser percentage of full-time employment than the position the teacher last held while employed in the district.

(E)(1) Notwithstanding any provision to the contrary in Chapter 4117 of the Revised Code, the requirements of this section prevail over any conflicting provisions of a collective bargaining agreement entered into on or after October 1, 2012. However, the board and the teachers’ labor organization shall negotiate how specialized training and experience will be factored into reduction in force and recall decisions regardless of the categories prescribed by division (B) of this section. In addition, the board and the teachers’ labor organization may negotiate additional factors to be considered in determining the order of reductions, which factors shall not be inconsistent with division (B) of this section.

(2) After applying specialized training and experience and any other negotiated factors, teachers within the same category prescribed by division (B) of this section shall be given preference based on seniority.