(A) This section applies to any entity that is exempt from taxation under section 501(c)(3) of the Internal Revenue Code and that satisfies the conditions specified in divisions (C)(1)(f)(ii) and (iii) of section 3314.02 of the Revised Code but does not satisfy the condition specified in division (C)(1)(f)(i) of that section.

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(B) Notwithstanding division (C)(1)(f)(i) of section 3314.02 of the Revised Code, and subject to division (D)(2) of this section, an entity described in division (A) of this section may do both of the following without obtaining the department of education and workforce’s initial approval of its sponsorship under divisions (A)(2) and (B)(1) of section 3314.015 of the Revised Code:

(1) Succeed the board of trustees of a state university located in the pilot project area or that board’s designee as the sponsor of a community school established under this chapter;

(2) Continue to sponsor that school in conformance with the terms of the contract between the board of trustees or its designee and the governing authority of the community school and renew that contract as provided in division (E) of section 3314.03 of the Revised Code.

(C) The entity that succeeds the board of trustees or the board’s designee as sponsor of a community school under division (B) of this section also may enter into contracts to sponsor other community schools regardless of the proposed school’s location, without obtaining the department’s initial approval of its sponsorship of those schools under divisions (A)(2) and (B)(1) of section 3314.015 of the Revised Code as long as the contracts conform with and the entity complies with all other requirements of this chapter.

(D)(1) Regardless of the entity’s authority to sponsor community schools without the initial approval of the department, the entity is under the continuing oversight of the department in accordance with rules adopted under section 3314.015 of the Revised Code.

(2) If an entity described in division (A) of this section receives a rating below “effective” under division (B) of section 3314.016 of the Revised Code for two or more consecutive years, that entity shall receive approval from the department to sponsor community schools and enter into a written agreement with the department in accordance with division (B)(1) of section 3314.015 of the Revised Code prior to entering into any further preliminary agreements under division (C)(2) of section 3314.02 of the Revised Code or renewing any existing contract to sponsor a community school.

(E)(1) As used in division (E) of this section:

(a) “Board of trustees” means a board of trustees of a state university located in the pilot project area.

(b) “Rating” means a sponsor rating under section 3314.016 of the Revised Code.

(2) Notwithstanding anything to the contrary in division (B)(7)(b) of section 3314.016 of the Revised Code, for the purposes of that division, the department shall consider an entity that succeeded a board of trustees as the sponsor of a community school in accordance with division (B)(1) of this section to have received the same rating for the 2016-2017 school year as the board of trustees, provided all of the following apply:

(a) The department assigned the board of trustees a rating of either “effective” or “exemplary” for the 2016-2017 school year.

(b) The department did not assign the entity its own rating for the 2016-2017 school year.

(c) The department assigned the entity its own rating for the 2017-2018 school year.