Designation of use of institutions.

(A) Subject to division (C) of this section, the director of rehabilitation and correction may change the purpose for which any institution or place under the control of the department of rehabilitation and correction is being used. The director may designate a new or another use for such institution, if the change of use and new designation has for its objective, improvement in the classification, segregation, care, education, cure, or rehabilitation of persons subject to the control of the department. (B) The director of rehabilitation and correction, by executive order, issued on or before December 31, 1988, shall eliminate the distinction between penal institutions and reformatory institutions. Notwithstanding any provision of the Revised Code or the Administrative Code to the contrary, upon the issuance of the executive order, any distinction made between the types of prisoners sentenced to or otherwise assigned to the institutions under the control of the department shall be discontinued. (C) The director shall contract under section 9.06 of the Revised Code for the private operation and management of not less than two facilities under the control of the department, unless the contractor managing and operating a facility is not in substantial compliance with the material terms and conditions of its contract and no other person or entity is willing and able to satisfy the obligations of the contract. All inmates assigned to a facility operated and managed by a private contractor remain inmates in the care and custody of the department. The statutes, rules, and policies of the department may apply to the private contractor and any inmate assigned to a facility operated and managed by a private contractor as agreed to in the contract entered into under section 9.06 of the Revised Code.