As Passed by the Senate 1
123rd General Assembly 4
Regular Session Sub. S. B. No. 161 5
1999-2000 6
SENATORS GARDNER-KEARNS-SCHAFRATH-SHOEMAKER-PRENTISS-OELSLAGER- 9
MUMPER-CUPP-FINGERHUT-SPADA-NEIN-DRAKE-LATELL-WATTS-HAGAN- 10
BRADY-DiDONATO-WHITE-WACHTMANN-ARMBRUSTER-LATTA 10
_________________________________________________________________ 12
A B I L L
To amend sections 3334.01, 3334.02, 3334.08, 14
3334.10, 3334.11, 3334.12, 3334.15, and 5747.01 15
and to enact sections 3334.18, 3334.19, 3334.20, 16
3334.21, and 5747.70 of the Revised Code to
authorize the Ohio tuition trust authority to 17
establish a variable college savings program. 18
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO: 20
Section 1. That sections 3334.01, 3334.02, 3334.08, 22
3334.10, 3334.11, 3334.12, 3334.15, and 5747.01 be amended and 23
sections 3334.18, 3334.19, 3334.20, 3334.21, and 5747.70 of the 24
Revised Code be enacted to read as follows: 25
Sec. 3334.01. As used in this chapter: 34
(A) "Aggregate original principal amount" means the 36
aggregate of the initial offering prices to the public of college 37
savings bonds, exclusive of accrued interest, if any. "Aggregate 38
original principal amount" does not mean the aggregate accreted 39
amount payable at maturity or redemption of such bonds. 40
(B) "Beneficiary" means an: 42
(1) AN individual designated by the purchaser under a 44
tuition payment contract or through a scholarship program as the 46
individual on whose behalf tuition credits purchased under the 47
contract or awarded through the scholarship program will be
applied toward the payment of undergraduate, graduate, or 48
professional tuition; OR 49
2
(2) AN INDIVIDUAL DESIGNATED BY THE CONTRIBUTOR UNDER A 51
VARIABLE COLLEGE SAVINGS PROGRAM CONTRACT AS THE INDIVIDUAL WHOSE 52
TUITION AND OTHER HIGHER EDUCATION EXPENSES WILL BE PAID FROM A 53
VARIABLE COLLEGE SAVINGS PROGRAM ACCOUNT. 54
(C) "Capital appreciation bond" means a bond for which the 56
following is true:
(1) The principal amount is less than the amount payable 58
at maturity or early redemption; and 59
(2) No interest is payable on a current basis. 61
(D) "Tuition credit" means a credit of the Ohio tuition 63
trust authority purchased under section 3334.09 of the Revised 64
Code.
(E) "College savings bonds" means revenue and other 66
obligations issued on behalf of the state or any agency or 67
issuing authority thereof as a zero-coupon or capital 68
appreciation bond, and designated as college savings bonds as 69
provided in this chapter. "College savings bond issue" means any 70
issue of bonds of which any part has been designated as college 71
savings bonds. 72
(F) "Institution of higher education" means a state 74
institution of higher education, a private college, university, 76
or other postsecondary institution located in this state that
possesses a certificate of authorization issued by the Ohio board 77
of regents pursuant to Chapter 1713. of the Revised Code or a 78
certificate of registration issued by the state board of 79
proprietary school registration under Chapter 3332. of the 80
Revised Code, or an accredited college, university, or other 81
postsecondary institution located outside this state that is 82
accredited by an accrediting organization or professional 83
association recognized by the authority. To be considered an 84
institution of higher education, an institution shall meet the 85
definition of an eligible educational institution under section 86
529 of the Internal Revenue Code.
(G) "Issuing authority" means any authority, commission, 88
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body, agency, or individual empowered by the Ohio Constitution or 90
the Revised Code to issue bonds or any other debt obligation of 91
the state or any agency or department thereof. "Issuer" means
the issuing authority or, if so designated under division (B) of 92
section 3334.04 of the Revised Code, the treasurer of state. 93
(H) "Tuition" means the charges imposed to attend an 95
institution of higher education as an undergraduate, graduate, or 96
professional student and all fees required as a condition of 97
enrollment, as determined by the Ohio tuition trust authority. 98
"Tuition" does not include fees charged to out-of-state residents 99
by state institutions of higher education, laboratory fees, room 100
and board, or other similar fees and charges. 101
(I) "Weighted average tuition" means the tuition cost 103
resulting from the following calculation: 104
(1) Add the products of the annual undergraduate tuition 106
CHARGED TO OHIO RESIDENTS at each four-year state university 108
multiplied by that institution's total number of undergraduate 109
fiscal year equated students; and 110
(2) Divide the gross total of the products from division 112
(J)(I)(1) of this section by the total number of undergraduate 113
fiscal year equated students attending four-year state 114
universities. 115
(J) "Zero-coupon bond" means a bond which has a stated 117
interest rate of zero per cent and on which no interest is 118
payable until the maturity or early redemption of the bond, and 119
is offered at a substantial discount from its original stated 120
principal amount. 121
(K) "State institution of higher education" includes the 123
state universities listed in section 3345.011 of the Revised 124
Code, community colleges created pursuant to Chapter 3354. of the 125
Revised Code, university branches created pursuant to Chapter 126
3355. of the Revised Code, technical colleges created pursuant to 127
Chapter 3357. of the Revised Code, state community colleges 128
created pursuant to Chapter 3358. of the Revised Code, the 129
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medical college of Ohio at Toledo, and the northeastern Ohio 130
universities college of medicine.
(L) "Four-year state university" means those state 132
universities listed in section 3345.011 of the Revised Code. 133
(M) "Principal amount" refers to the initial offering 135
price to the public of an obligation, exclusive of the accrued 136
interest, if any. "Principal amount" does not refer to the 137
aggregate accreted amount payable at maturity or redemption of an 138
obligation. 139
(N) "Scholarship program" means a program registered with 141
the Ohio tuition trust authority pursuant to section 3334.18 142
3334.17 of the Revised Code. 143
(O) "Internal Revenue Code" means the "Internal Revenue 146
Code of 1986," 100 Stat. 2085, 26 U.S.C.A. 1 et seq., as amended. 147
(P) "Other higher education expenses" means room and board 150
and books, supplies, equipment, and nontuition-related fees 151
associated with the cost of attendance of a beneficiary at an 152
institution of higher education, but only to the extent that such 153
expenses meet the definition of "qualified higher education 154
expenses" under section 529 of the Internal Revenue Code. "Other 155
higher education expenses" does not include tuition as defined in 156
division (H) of this section. 157
(Q) "Purchaser" means the person signing the tuition 160
payment contract, who controls the account and acquires tuition 161
credits for an account under the terms and conditions of the 162
contract.
(R) "CONTRIBUTOR" MEANS A PERSON WHO SIGNS A VARIABLE 164
COLLEGE SAVINGS PROGRAM CONTRACT WITH THE OHIO TUITION TRUST 165
AUTHORITY AND CONTRIBUTES TO AND OWNS THE ACCOUNT CREATED UNDER 166
THE CONTRACT.
Sec. 3334.02. (A) In order to help make higher education 175
affordable and accessible to all citizens of Ohio, to maintain 176
state institutions of higher education by helping to provide a 177
stable financial base to these institutions, to provide the 178
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citizens of Ohio with financing assistance for higher education 179
and protection against rising tuition costs, to encourage saving 180
to enhance the ability of citizens of Ohio to obtain financial 181
access to institutions of higher education, to encourage 182
elementary and secondary students in this state to achieve 183
academic excellence, and to promote a well-educated and 184
financially secure population to the ultimate benefit of all 185
citizens of the state of Ohio, there is hereby created the Ohio 186
college savings program. The program shall consist of the 187
issuance of college savings bonds and the sale of tuition credits 188
and, if offered, supplemental credits. 189
(B) The provisions of Chapter 1707. of the Revised Code 191
shall not apply to tuition credits or any agreement or 193
transaction related thereto.
(C) TO PROVIDE THE CITIZENS OF OHIO WITH A CHOICE OF 195
TAX-ADVANTAGED COLLEGE SAVINGS PROGRAMS AND THE OPPORTUNITY TO 196
PARTICIPATE IN MORE THAN ONE TYPE OF COLLEGE SAVINGS PROGRAM AT A 198
TIME, THE OHIO TUITION TRUST AUTHORITY MAY ESTABLISH AND 199
ADMINISTER A VARIABLE COLLEGE SAVINGS PROGRAM AS A QUALIFIED 200
STATE TUITION PROGRAM UNDER SECTION 529 OF THE INTERNAL REVENUE 201
CODE. THE PROGRAM, IF ESTABLISHED, SHALL ALLOW CONTRIBUTORS TO 203
MAKE CASH CONTRIBUTIONS TO VARIABLE COLLEGE SAVINGS PROGRAM 204
ACCOUNTS CREATED FOR THE PURPOSE OF PAYING FUTURE TUITION AND
OTHER HIGHER EDUCATION EXPENSES AND PROVIDING VARIABLE RATES OF 205
RETURN ON CONTRIBUTIONS. 206
(D) IF A VARIABLE COLLEGE SAVINGS PROGRAM IS ESTABLISHED, 208
A PERSON MAY PARTICIPATE SIMULTANEOUSLY IN BOTH THE OHIO COLLEGE 209
SAVINGS PROGRAM AND THE VARIABLE COLLEGE SAVINGS PROGRAM. 210
Sec. 3334.08. (A) In addition to any other powers 219
conferred by this chapter, the Ohio tuition trust authority may 220
do any of the following: 221
(1) Impose reasonable residency requirements for 223
beneficiaries of tuition credits; 224
(2) Impose reasonable limits on the number of tuition 226
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credit participants; 227
(3) Impose and collect administrative fees and charges in 229
connection with any transaction under this chapter; 230
(4) Purchase insurance from insurers licensed to do 232
business in this state providing for coverage against any loss in 233
connection with the authority's property, assets, or activities 234
or to further ensure the value of tuition credits; 235
(5) Indemnify or purchase policies of insurance on behalf 237
of members, officers, and employees of the authority from 238
insurers licensed to do business in this state providing for 239
coverage for any liability incurred in connection with any civil 240
action, demand, or claim against a director, officer, or employee 241
by reason of an act or omission by the director, officer, or 242
employee that was not manifestly outside the scope of the 243
employment or official duties of the director, officer, or 244
employee or with malicious purpose, in bad faith, or in a wanton 246
or reckless manner;
(6) Make, execute, and deliver contracts, conveyances, and 248
other instruments necessary to the exercise and discharge of the 249
powers and duties of the authority; 250
(7) Promote, advertise, and publicize the college savings 252
program AND THE VARIABLE COLLEGE SAVINGS PROGRAM; 253
(8) Adopt rules under section 111.15 of the Revised Code 255
for the implementation of the college savings program AND THE 256
VARIABLE COLLEGE SAVINGS PROGRAM; 257
(9) Contract, for the provision of all or part of the 259
services necessary for the management and operation of the 260
college savings program AND THE VARIABLE COLLEGE SAVINGS PROGRAM, 261
with a bank, trust company, savings and loan association, 263
insurance company, or licensed dealer in securities if the bank, 264
company, association, or dealer is authorized to do business in 265
this state and information about the contract is filed with the 266
controlling board pursuant to division (D)(6) of section 127.16 267
of the Revised Code;
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(10) Contract for other services, or for goods, needed by 269
the authority in the conduct of its business, including but not 270
limited to credit card services; 271
(11) Employ an executive director and other personnel as 273
necessary to carry out its responsibilities under this chapter, 274
and fix the compensation of these persons. All employees of the 275
authority shall be in the unclassified civil service and shall be 276
eligible for membership in the public employees retirement 277
system. 278
(12) Contract with financial consultants, actuaries, 280
auditors, and other consultants as necessary to carry out its 281
responsibilities under this chapter; 282
(13) Enter into agreements with any agency of the state or 284
its political subdivisions or with private employers under which 285
an employee may agree to have a designated amount deducted in 286
each payroll period from the wages or salary due the employee for 287
the purpose of purchasing tuition credits pursuant to a tuition 288
payment contract OR MAKING CONTRIBUTIONS PURSUANT TO A VARIABLE 289
COLLEGE SAVINGS PROGRAM CONTRACT; 290
(14) Enter into an agreement with the treasurer of state 292
under which the treasurer of state will receive, and credit to 293
the Ohio tuition trust fund OR VARIABLE COLLEGE SAVINGS PROGRAM 294
FUND, from any bank or savings and loan association authorized to 296
do business in this state, amounts that a depositor of the bank 297
or association authorizes the bank or association to withdraw 298
periodically from the depositor's account for the purpose of 300
purchasing tuition credits pursuant to a tuition payment contract 301
OR MAKING CONTRIBUTIONS PURSUANT TO A VARIABLE COLLEGE SAVINGS 302
PROGRAM CONTRACT;
(15) Solicit and accept gifts, grants, and loans from any 304
person or governmental agency and participate in any governmental 305
program; 306
(16) Impose limits on the number of credits which may be 309
purchased on behalf of or assigned or awarded to any beneficiary 310
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AND ON THE TOTAL AMOUNT OF CONTRIBUTIONS THAT MAY BE MADE ON 311
BEHALF OF A BENEFICIARY;
(17) Impose restrictions on the substitution of another 313
individual for the original beneficiary AND IMPOSE LIMITATIONS ON 314
THE ROLLOVER OF ACCOUNTS TO PLANS OFFERED BY OTHER STATES; 315
(18) Impose a limit on the age of a beneficiary, above 317
which tuition credits may not be purchased OR CONTRIBUTIONS MADE 318
on behalf of that beneficiary; 320
(19) Enter into a cooperative agreement with the treasurer 322
of state to provide for the direct disbursement of payments under 323
tuition payment OR VARIABLE COLLEGE SAVINGS PROGRAM contracts; 324
(20) Determine the other higher education expenses for 326
which tuition credits OR CONTRIBUTIONS may be used; 327
(21) Terminate any prepaid tuition PAYMENT OR VARIABLE 329
COLLEGE SAVINGS PROGRAM contract if no purchases OR CONTRIBUTIONS 331
are made for a period of three years or more and there are fewer 333
than a total of five tuition units or tuition credits OR LESS
THAN A DOLLAR AMOUNT SET BY RULE on account, provided that notice 335
of a possible termination shall be provided in advance, 336
explaining any options to prevent termination, and a reasonable 337
amount of time shall be provided within which to act to prevent a 338
termination;
(22) MAINTAIN A SEPARATE ACCOUNT FOR EACH TUITION PAYMENT 340
OR VARIABLE COLLEGE SAVINGS PROGRAM CONTRACT; 341
(23) Perform all acts necessary and proper to carry out 343
the duties and responsibilities of the authority pursuant to this 344
chapter. 345
(B) Except as otherwise specified in this chapter, the 347
provisions of Chapters 123., 125., and 4117. of the Revised Code 348
shall not apply to the authority. The department of 349
administrative services shall, upon the request of the authority, 350
act as the authority's agent for the purchase of equipment, 351
supplies, insurance, or services, or the performance of 352
administrative services pursuant to Chapter 125. of the Revised 353
9
Code. 354
Sec. 3334.10. Divisions (A) and, (B), (C), AND (D) of this 364
section do not apply to scholarship programs established under 365
section 3334.17 of the Revised Code.
(A) Unless otherwise provided for in the contract, a 368
tuition payment contract may be terminated by the purchaser under 369
any of the following circumstances upon the written request of 370
the purchaser to the authority: 371
(1) Upon the death or permanent disability of the 373
beneficiary;
(2) Upon notification to the Ohio tuition trust authority 375
in writing that the beneficiary is age eighteen or older, has 376
decided not to attend an institution of higher education, and 377
requests that the tuition payment contract be terminated; 378
(3) Upon the beneficiary's completion of the degree 380
requirements at an institution of higher education; 381
(4) Upon the rollover of all contributions to AMOUNTS IN a 384
tuition credit account to the prepaid tuition plan of AN 386
EQUIVALENT ACCOUNT IN another state; 387
(5) Upon the occurrence of other circumstances determined 389
by the authority to be grounds for termination. 390
(B) The authority shall determine the method and schedule 392
for payment of refunds upon termination of a tuition payment 393
contract. 394
(1) In cases described by division (A)(2) or (3) of this 396
section, the amount of the refund shall be equal to ninety-nine 397
one-hundredths of NOT LESS THAN one per cent of the weighted 398
average tuition in the academic year the contract REFUND is 400
terminated PAID, multiplied by the number of tuition credits 402
purchased and not used, minus any reasonable charges and fees
provided for by the authority, or such other lesser sum as shall 403
be determined by the authority but only to the extent that such a 404
lesser sum is necessary to meet the refund penalty requirements 405
for qualified state tuition programs under section 529 of the 406
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Internal Revenue Code. 407
(2) In cases described by division (A)(1) of this section, 409
the amount of the refund shall be equal to the greater of the 410
following:
(a) One per cent of the weighted average tuition in the 412
academic year the contract REFUND is terminated PAID, multiplied 413
by the number of tuition credits purchased and not used; 415
(b) The total purchase price of all tuition credits 417
purchased for the beneficiary and not used. 418
(3) In cases described by division (A)(5) of this section, 420
the amount of the refund shall be either of the following as 421
determined by the authority: 422
(a) The refund provided by division (B)(1) of this 424
section;
(b) The refund provided by division (B)(2) of this 426
section, or such other lesser sum as shall be determined by the 428
authority but only to the extent that such a lesser sum is 429
necessary to meet the refund penalty requirements for qualified 430
state tuition programs under section 529 of the Internal Revenue 431
Code.
(C) UNLESS OTHERWISE PROVIDED FOR IN THE CONTRACT, A 434
VARIABLE COLLEGE SAVINGS PROGRAM ACCOUNT MAY BE TERMINATED BY THE 435
CONTRIBUTOR FOR ANY REASON UPON THE WRITTEN REQUEST OF THE 436
CONTRIBUTOR TO THE AUTHORITY. TERMINATION OF A VARIABLE COLLEGE 437
SAVINGS PROGRAM ACCOUNT SHALL OCCUR NO EARLIER THAN A MATURITY 438
PERIOD SET BY THE AUTHORITY AFTER THE FIRST CONTRIBUTION IS MADE 439
TO THE ACCOUNT.
(D) THE AUTHORITY SHALL DETERMINE THE METHOD AND SCHEDULE 441
FOR PAYMENT OF REFUNDS UPON TERMINATION OF A VARIABLE SAVINGS 442
PROGRAM ACCOUNT. 443
(1) THE CONTRIBUTOR UNDER A VARIABLE SAVINGS PROGRAM 445
CONTRACT MAY RECEIVE A REFUND OF THE BALANCE IN AN ACCOUNT, LESS 446
ANY ADMINISTRATIVE FEES, IF THE ACCOUNT IS TERMINATED UPON THE 447
DEATH OR PERMANENT DISABILITY OF THE BENEFICIARY OR, TO THE 448
11
EXTENT ALLOWED UNDER RULES OF THE AUTHORITY, UPON THE ROLLOVER OF 449
ALL AMOUNTS IN A VARIABLE COLLEGE SAVINGS PROGRAM ACCOUNT TO AN 450
EQUIVALENT ACCOUNT IN ANOTHER STATE. 451
(2) IF A VARIABLE COLLEGE SAVINGS PROGRAM ACCOUNT IS 453
TERMINATED FOR ANY REASON OTHER THAN THOSE SET FORTH IN DIVISION 454
(D)(1) OF THIS SECTION, THE CONTRIBUTOR MAY RECEIVE A REFUND OF 455
THE BALANCE IN THE ACCOUNT, LESS ANY ADMINISTRATIVE FEES, AND 456
LESS ANY ADDITIONAL AMOUNT NECESSARY TO MEET THE MINIMUM REFUND 457
PENALTY REQUIREMENTS FOR A QUALIFIED STATE TUITION PROGRAM UNDER 458
SECTION 529 OF THE INTERNAL REVENUE CODE. 459
(3) EARNINGS SHALL BE CALCULATED AS THE TOTAL VALUE OF THE 461
ACCOUNT LESS THE AGGREGATE CONTRIBUTIONS, OR IN SUCH OTHER MANNER 462
AS PRESCRIBED BY SECTION 529 OF THE INTERNAL REVENUE CODE. 464
(E) In the case of a scholarship program, a refund of 466
tuition credits in the program's account may be made only for 468
just cause with the approval of the authority. The refund shall 469
be paid to the entity that established the scholarship program 470
or, with that entity's approval, to the authority if this is 471
authorized by federal tax law. The amount of any refund shall be 472
determined by the authority and shall meet the requirements for 473
refunds made on account of scholarships under section 529 of the 474
Internal Revenue Code. 475
(D)(F) If a beneficiary is awarded a scholarship other 477
than under a scholarship program, a waiver of tuition, or similar 478
subvention that the authority determines cannot be converted into 481
money by the beneficiary, the authority shall, during each 482
academic term that the beneficiary furnishes the authority such 483
information about the scholarship, waiver, or similar subvention 484
as the authority requires, refund to the person designated in the 485
contract, or, in the case of a beneficiary under a scholarship 486
program, to the beneficiary an amount equal to the value that the 487
tuition credits OR THE AMOUNTS IN THE VARIABLE COLLEGE SAVINGS 488
PROGRAM ACCOUNT that are not needed on account of the 490
scholarship, waiver, or similar subvention would otherwise have 491
12
to the beneficiary that term at the institution of higher
education where the beneficiary is enrolled. The authority may, 492
at its sole option, designate the institution of higher education 493
at which the beneficiary is enrolled as the agent of the 494
authority for purposes of refunds pursuant to this division. 495
(E)(G) If, in any academic term for which tuition credits 497
OR ANY AMOUNTS IN A VARIABLE COLLEGE SAVINGS PROGRAM ACCOUNT have 499
been used to pay all or part of a beneficiary's tuition, the
beneficiary withdraws from the institution of higher education at 500
which the beneficiary is enrolled prior to the end of the 501
academic term, a pro rata share of any refund of tuition as a 502
result of the withdrawal equal to that portion of the tuition 503
paid with tuition credits OR THE AMOUNTS IN A VARIABLE COLLEGE 504
SAVINGS PROGRAM ACCOUNT shall be made to the authority, unless 505
the authority designates a different procedure. The authority 506
shall credit any refund received, less any reasonable charges and 507
fees provided for by the authority, to the appropriate account 508
established under division (F)(1) or (2) of section 3334.11 of 510
the Revised Code OR DIVISION (H) OF THIS SECTION.
(H) THE AUTHORITY SHALL MAINTAIN A SEPARATE ACCOUNT FOR 512
EACH VARIABLE COLLEGE SAVINGS CONTRACT ENTERED INTO PURSUANT TO 513
DIVISION (A) OF SECTION 3334.18 OF THE REVISED CODE FOR 514
CONTRIBUTIONS MADE ON BEHALF OF A BENEFICIARY, SHOWING THE NAME 517
OF THE BENEFICIARY OF THAT CONTRACT AND THE AMOUNT OF 518
CONTRIBUTIONS MADE PURSUANT TO THAT CONTRACT. UPON REQUEST OF 519
ANY BENEFICIARY OR CONTRIBUTOR, THE AUTHORITY SHALL PROVIDE A 520
STATEMENT INDICATING, IN THE CASE OF A BENEFICIARY, THE AMOUNT OF 521
CONTRIBUTIONS MADE PURSUANT TO THAT CONTRACT ON BEHALF OF THE 522
BENEFICIARY, OR, IN THE CASE OF A CONTRIBUTOR, CONTRIBUTIONS 523
MADE, DISBURSED, OR REFUNDED PURSUANT TO THAT CONTRACT. A 524
BENEFICIARY AND CONTRIBUTOR EACH MAY FILE ONLY ONE REQUEST UNDER 525
THIS DIVISION IN ANY YEAR.
Sec. 3334.11. (A) The assets of the Ohio tuition trust 534
authority reserved for payment of the obligations of the 535
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authority pursuant to tuition payment contracts shall be placed 536
in a fund, which is hereby created and shall be known as the Ohio 538
tuition trust fund. The fund shall be in the custody of the 539
treasurer of state, but shall not be part of the state treasury. 540
That portion of payments received by the authority or the 541
treasurer of state from persons purchasing tuition credits under 542
tuition payment contracts that the authority determines is 543
actuarially necessary for the payment of obligations of the 544
authority pursuant to tuition payment contracts, all interest and 545
investment income earned by the fund, and all other receipts of 546
the authority from any other source that the authority determines 548
appropriate, shall be deposited in the fund. No purchaser or 549
beneficiary of tuition credits shall have any claim against the 550
funds of any state institution of higher education. All 551
investment fees and other costs incurred in connection with the 552
exercise of the investment powers of the authority pursuant to 553
divisions (D) and (E) of this section shall be paid from the
assets of the fund. 554
(B) Unless otherwise provided by the authority, the assets 556
of the Ohio tuition trust fund shall be expended in the following 557
order: 558
(1) To make payments to beneficiaries, or institutions of 560
higher education on behalf of beneficiaries, under division (B) 561
of section 3334.09 of the Revised Code; 562
(2) To make refunds as provided in divisions (B), (C)(E), 564
and (D)(F) of section 3334.10 of the Revised Code; 565
(3) To pay the investment fees and other costs of 567
administering the fund. 568
(C)(1) Except as may be provided in an agreement under 570
division (A)(19) of section 3334.08 of the Revised Code, all 572
disbursements from the Ohio tuition trust fund shall be made by
the treasurer of state on order of a designee of the authority. 573
(2) The treasurer of state shall deposit any portion of 575
the Ohio tuition trust fund not needed for immediate use in the 576
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same manner as state funds are deposited. 577
(D) The authority is the trustee of the Ohio tuition trust 579
fund. The authority shall have full power to invest the assets 581
of the fund and in exercising this power shall be subject to the
limitations and requirements contained in divisions (K) to (M) of 583
this section and sections 145.112 and 145.113 of the Revised 584
Code. The evidences of title of all investments shall be 585
delivered to the treasurer of state or to a qualified trustee 587
designated by the treasurer of state as provided in section 589
135.18 of the Revised Code. Assets of the fund shall be 590
administered by the authority in a manner designed to be 591
actuarially sound so that the assets of the fund will be
sufficient to satisfy the obligations of the authority pursuant 592
to tuition payment contracts and defray the reasonable expenses 593
of administering the fund. 594
(E) The public employees retirement board shall, with the 596
approval of the authority, exercise the investment powers of the 597
authority as set forth in division (D) of this section until the 598
authority determines that assumption and exercise by the 599
authority of the investment powers is financially and 600
administratively feasible. The investment powers shall be 601
exercised by the public employees retirement board in a manner 602
agreed upon by the authority that maximizes the return on 603
investment and minimizes the administrative expenses. 604
(F)(1) The authority shall maintain a separate account for 606
each tuition payment contract entered into pursuant to division 608
(A) of section 3334.09 of the Revised Code for the purchase of 609
tuition credits on behalf of a beneficiary or beneficiaries 610
showing the beneficiary or beneficiaries of that contract and the 611
number of tuition credits purchased pursuant to that contract. 612
Upon request of any beneficiary or person who has entered into a 613
tuition payment contract, the authority shall provide a statement 614
indicating, in the case of a beneficiary, the number of tuition 615
credits purchased on behalf of the beneficiary, or in the case of 616
15
a person who has entered into a tuition payment contract, the 617
number of tuition credits purchased, used, or refunded pursuant 618
to that contract. A beneficiary and person that have entered 619
into a tuition payment contract each may file only one request 620
under this division in any year. 621
(2) The authority shall maintain an account for each 623
scholarship program showing the number of tuition credits that 624
have been purchased for or donated to the program and the number 625
of tuition credits that have been used. Upon the request of the 626
entity that established the scholarship program, the authority 627
shall provide a statement indicating these numbers. 628
(G) In addition to the Ohio tuition trust fund, there is 630
hereby established a reserve fund that shall be in the custody of 633
the treasurer of state but shall not be part of the state
treasury, and shall be known as the Ohio tuition trust reserve 634
fund, and an operating fund that shall be part of the state 636
treasury, and shall be known as the Ohio tuition trust operating 637
fund. That portion of payments received by the authority or the 638
treasurer of state from persons purchasing tuition credits under 639
tuition payment contracts that the authority determines is not 641
actuarially necessary for the payment of obligations of the 642
authority pursuant to tuition payment contracts, any interest and 643
investment income earned by the reserve fund, any administrative 644
charges and fees imposed by the authority on transactions under 645
this chapter or on purchasers or beneficiaries of tuition 646
credits, and all other receipts from any other source that the 648
authority determines appropriate, shall be deposited in the 649
reserve fund to pay the operating expenses of the authority and 650
the costs of administering the program. The assets of the 651
reserve fund may be invested in the same manner and subject to 652
the same limitations set forth in divisions (D), (E), and (K) to 654
(M) of this section and sections 145.112 and 145.113 of the 655
Revised Code. All investment fees and other costs incurred in 657
connection with the exercise of the investment powers shall be 659
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paid from the assets of the reserve fund. Except as otherwise 660
provided for in this chapter, all operating expenses of the 661
authority and costs of administering the program shall be paid 662
from the operating fund. The treasurer shall, upon request of 663
the authority, transfer funds from the reserve fund to the 664
operating fund as the authority determines appropriate to pay 665
those current operating expenses of the authority and costs of 666
administering the program as the authority designates. Any 667
interest or investment income earned on the assets of the 668
operating fund shall be deposited in the operating fund. 669
(H) In January of each year the authority shall report to 671
each person who received any payments or refunds from the 672
authority during the preceding year information relative to the 673
value of the payments or refunds to assist in determining that 675
person's tax liability. 676
(I) The authority shall report to the tax commissioner any 679
information, and at the times, as the tax commissioner requires 681
to determine any tax liability that a person may have incurred 682
during the preceding year as a result of having received any 683
payments or refunds from the authority.
(J) All records of the authority indicating the identity 685
of purchasers and beneficiaries of tuition credits or college 686
savings bonds, the number of tuition credits purchased, used, or 687
refunded under a tuition payment contract, and the number of 688
college savings bonds purchased, held, or redeemed are not public 689
records within the meaning of section 149.43 of the Revised Code. 690
(K) The authority and other fiduciaries shall discharge 693
their duties with respect to the funds with care, skill, 694
prudence, and diligence under the circumstances then prevailing 695
that a prudent person acting in a like capacity and familiar with 696
such matters would use in the conduct of an enterprise of a like 697
character and with like aims; and by diversifying the investments 698
of the assets of the funds so as to minimize the risk of large 699
losses, unless under the circumstances it is clearly prudent not 701
17
to do so.
To facilitate investment of the funds, the authority may 703
establish a partnership, trust, limited liability company, 704
corporation, including a corporation exempt from taxation under 705
the Internal Revenue Code, 100 Stat. 2085, 26 U.S.C. 1, as 706
amended, or any other legal entity authorized to transact 707
business in this state.
(L) In exercising its fiduciary responsibility with 709
respect to the investment of the assets of the funds, it shall be 710
the intent of the authority to give consideration to investments 711
that enhance the general welfare of the state and its citizens 712
where the investments offer quality, return, and safety 713
comparable to other investments currently available to the 714
authority. In fulfilling this intent, equal consideration shall 715
also be given to investments otherwise qualifying under this 716
section that involve minority owned and controlled firms and 717
firms owned and controlled by women, either alone or in joint 718
venture with other firms.
The authority shall adopt, in regular meeting, policies, 721
objectives, or criteria for the operation of the investment 722
program that include asset allocation targets and ranges, risk 724
factors, asset class benchmarks, time horizons, total return 725
objectives, and performance evaluation guidelines. In adopting 727
policies and criteria for the selection of agents with whom the 728
authority may contract for the administration of the assets of
the funds, the authority shall give equal consideration to 729
minority owned and controlled firms, firms owned and controlled 730
by women, and ventures involving minority owned and controlled 731
firms and firms owned and controlled by women that otherwise meet 732
the policies and criteria established by the authority. 733
Amendments and additions to the policies and criteria shall be 734
adopted in regular meeting. The authority shall publish its
policies, objectives, and criteria under this provision no less 735
often than annually and shall make copies available to interested 737
18
parties.
When reporting on the performance of investments, the 739
authority shall comply with the performance presentation 741
standards established by the association for investment 742
management and research.
(M) All investments shall be purchased at current market 744
prices and the evidences of title of the investments shall be 745
placed in the hands of the treasurer of state, who is hereby 746
designated as custodian thereof, or in the hands of the treasurer 748
of state's authorized agent. The treasurer of state or the agent 749
shall collect the principal, dividends, distributions, and
interest thereon as they become due and payable and place them 750
when so collected into the custodial funds. 751
The treasurer of state shall pay for investments purchased 753
by the authority on receipt of written or electronic instructions 754
from the authority or the authority's designated agent 755
authorizing the purchase and pending receipt of the evidence of 757
title of the investment by the treasurer of state or the
treasurer of state's authorized agent. The authority may sell 758
investments held by the authority, and the treasurer of state or 759
the treasurer of state's authorized agent shall accept payment 760
from the purchaser and deliver evidence of title of the 761
investment to the purchaser on receipt of written or electronic 762
instructions from the authority or the authority's designated 763
agent authorizing the sale, and pending receipt of the moneys for
the investments. The amount received shall be placed in the 764
custodial funds. The authority and the treasurer of state may 765
enter into agreements to establish procedures for the purchase 766
and sale of investments under this division and the custody of 767
the investments.
No purchase or sale of any investment shall be made under 769
this section except as authorized by the authority. 770
Any statement of financial position distributed by the 772
authority shall include fair value, as of the statement date, of 773
19
all investments held by the authority under this section. 774
Sec. 3334.12. Notwithstanding anything to the contrary in 783
sections 3334.07 and 3334.09 of the Revised Code: 784
(A) Annually, the Ohio tuition trust authority shall have 786
the actuarial soundness of the Ohio tuition trust fund evaluated 787
by a nationally recognized actuary and shall determine whether 788
additional assets are necessary to defray the obligations of the 789
authority. If, after the authority sets the price for tuition 790
credits, circumstances arise that the executive director 792
determines necessitate an additional evaluation of the actuarial 793
soundness of the fund, the executive director shall have a 795
nationally recognized actuary conduct the necessary evaluation. 796
If the assets of the fund are insufficient to ensure the 797
actuarial soundness of the fund, the authority shall adjust the 798
price of subsequent purchases of tuition credits.
(B) Upon termination of the program or liquidation of the 800
Ohio tuition trust fund, the Ohio tuition trust reserve fund, and 801
the Ohio tuition trust operating fund, any remaining assets of 802
the funds after all obligations of the funds have been satisfied 803
pursuant to division (B) of section 3334.11 of the Revised Code 804
shall be transferred to the general revenue fund of the state. 805
(C) The authority shall prepare and cause to have audited 807
an annual financial report on all financial activity of the Ohio 808
tuition trust authority within ninety days of the end of the 809
fiscal year. The authority shall transmit a copy of the audited 810
financial report to the governor, the president of the senate, 811
the speaker of the house of representatives, and the minority 812
leaders of the senate and the house of representatives. Copies 813
of the audited financial report also shall be made available, 814
upon request, to the persons entering into contracts with the 815
authority and to prospective purchasers of tuition credits AND 816
PROSPECTIVE CONTRIBUTORS TO VARIABLE COLLEGE SAVINGS PROGRAM 817
ACCOUNTS.
Sec. 3334.15. (A) The right of a person to a tuition 826
20
credit or a payment under section 3334.09 of the Revised Code 828
pursuant to a tuition credit contract or, A scholarship program, 829
OR A VARIABLE COLLEGE SAVINGS PROGRAM ACCOUNT shall not be 831
subject to execution, garnishment, attachment, the operation of 833
bankruptcy or the insolvency laws, or other process of law. 834
(B) THE RIGHT OF A PERSON TO A TUITION CREDIT OR A PAYMENT 836
UNDER SECTION 3334.09 OF THE REVISED CODE PURSUANT TO A TUITION 837
CREDIT CONTRACT, A SCHOLARSHIP PROGRAM, OR A VARIABLE COLLEGE 838
SAVINGS PROGRAM ACCOUNT SHALL NOT BE USED AS SECURITY OR 839
COLLATERAL FOR A LOAN.
Sec. 3334.18. (A) A VARIABLE COLLEGE SAVINGS PROGRAM 841
ESTABLISHED BY THE OHIO TUITION TRUST AUTHORITY SHALL INCLUDE 842
PROVISIONS FOR A CONTRACT TO BE ENTERED INTO BETWEEN A 843
CONTRIBUTOR AND THE AUTHORITY THAT WILL AUTHORIZE THE CONTRIBUTOR 844
TO OPEN AN ACCOUNT FOR A BENEFICIARY AND MAY AUTHORIZE THE 846
CONTRIBUTOR TO SUBSTITUTE A NEW BENEFICIARY FOR ONE ORIGINALLY
NAMED IN THE CONTRACT. 847
(B) THE AUTHORITY SHALL PROVIDE ADEQUATE SAFEGUARDS TO 849
PREVENT TOTAL CONTRIBUTIONS TO A VARIABLE COLLEGE SAVINGS PROGRAM 850
ACCOUNT OR PURCHASES OF TUITION CREDITS, EITHER SEPARATELY OR 851
COMBINED, THAT ARE MADE ON BEHALF OF A BENEFICIARY FROM EXCEEDING 852
THE AMOUNT NECESSARY TO PROVIDE FOR THE TUITION AND OTHER HIGHER 853
EDUCATION EXPENSES OF THE BENEFICIARY. HOWEVER, IN NO EVENT 854
SHALL CONTRIBUTIONS OR PURCHASES EXCEED THE ALLOWABLE LIMIT FOR A 856
QUALIFIED STATE TUITION PROGRAM UNDER SECTION 529 OF THE INTERNAL 857
REVENUE CODE.
(C) PARTICIPATION IN THE VARIABLE COLLEGE SAVINGS PROGRAM 859
DOES NOT GUARANTEE THAT CONTRIBUTIONS AND THE INVESTMENT RETURN 860
ON CONTRIBUTIONS, IF ANY, WILL BE ADEQUATE TO COVER FUTURE 862
TUITION AND OTHER HIGHER EDUCATION EXPENSES OR THAT A BENEFICIARY 863
WILL BE ADMITTED TO OR PERMITTED TO CONTINUE TO ATTEND AN 864
INSTITUTION OF HIGHER EDUCATION. THE STATE SHALL HAVE NO DEBT OR 865
OBLIGATION TO ANY CONTRIBUTOR, BENEFICIARY, OR ANY OTHER PERSON 866
AS A RESULT OF THE ESTABLISHMENT OF THE PROGRAM. 867
21
Sec. 3334.19. (A) IF THE OHIO TUITION TRUST AUTHORITY 869
ESTABLISHES A VARIABLE COLLEGE SAVINGS PROGRAM, IT SHALL ADOPT AN 870
INVESTMENT PLAN THAT SETS FORTH INVESTMENT POLICIES AND 871
GUIDELINES TO BE UTILIZED IN ADMINISTERING THE PROGRAM. THE 872
AUTHORITY MAY CONTRACT WITH ONE OR MORE INSURANCE COMPANIES, 873
BANKS, OR OTHER FINANCIAL INSTITUTIONS TO ACT AS ITS INVESTMENT 874
AGENTS AND TO PROVIDE SUCH SERVICES AS THE AUTHORITY CONSIDERS 875
APPROPRIATE TO THE INVESTMENT PLAN, INCLUDING: 876
(1) PURCHASE, CONTROL, AND SAFEKEEPING OF ASSETS; 878
(2) RECORD KEEPING AND ACCOUNTING FOR INDIVIDUAL ACCOUNTS 880
AND FOR THE PROGRAM AS A WHOLE; 881
(3) PROVISION OF CONSOLIDATED STATEMENTS OF ACCOUNT. 884
(B) THE AUTHORITY OR ITS INVESTMENT AGENTS SHALL MAINTAIN 886
A SEPARATE ACCOUNT FOR THE BENEFICIARY OF EACH CONTRACT ENTERED 887
INTO UNDER THE VARIABLE COLLEGE SAVINGS PROGRAM. IF A 888
BENEFICIARY HAS MORE THAN ONE SUCH ACCOUNT, THE AUTHORITY OR ITS 889
AGENTS SHALL TRACK TOTAL CONTRIBUTIONS AND EARNINGS AND PROVIDE A 890
CONSOLIDATED SYSTEM OF ACCOUNT DISTRIBUTIONS TO INSTITUTIONS OF 891
HIGHER EDUCATION.
(C) THE AUTHORITY OR ITS AGENTS MAY PLACE ASSETS OF THE 893
PROGRAM IN SAVINGS ACCOUNTS AND MAY PURCHASE FIXED OR VARIABLE 894
LIFE INSURANCE OR ANNUITY CONTRACTS, SECURITIES, EVIDENCE OF 896
INDEBTEDNESS, OR OTHER INVESTMENT PRODUCTS PURSUANT TO THE 897
INVESTMENT PLAN.
(D) CONTRIBUTORS SHALL NOT DIRECT THE INVESTMENT OF THEIR 899
CONTRIBUTIONS UNDER THE INVESTMENT PLAN. THE AUTHORITY SHALL 900
IMPOSE OTHER LIMITS ON CONTRIBUTORS' INVESTMENT DISCRETION AS 901
REQUIRED UNDER SECTION 529 OF THE INTERNAL REVENUE CODE. 902
(E) IF THE AUTHORITY DOES NOT CONTRACT WITH AN INVESTMENT 904
AGENT TO INVEST VARIABLE COLLEGE SAVINGS PROGRAM FUNDS, THE 905
AUTHORITY SHALL BE THE TRUSTEE OF THE PROGRAM. IN SUCH EVENT, 907
THE AUTHORITY SHALL RECEIVE AND HOLD ALL PAYMENTS, DEPOSITS, AND 908
CONTRIBUTIONS, AS WELL AS GIFTS, BEQUESTS, ENDOWMENTS, AND 909
FEDERAL, STATE, OR LOCAL GRANTS AND ANY FUNDS FROM ANY OTHER 910
22
SOURCE, PUBLIC OR PRIVATE, AND ALL EARNINGS, UNTIL DISBURSED TO 911
PAY TUITION OR OTHER HIGHER EDUCATION EXPENSES OR REFUNDS 912
PURSUANT TO COLLEGE SAVINGS PLANS CONTRACTS. THE AUTHORITY SHALL 913
KEEP SUCH FUNDS SEGREGATED FROM ALL OTHER ASSETS OF THE 914
AUTHORITY.
(F) THE AUTHORITY AND ANY INVESTMENT AGENTS WITH WHICH IT 916
CONTRACTS SHALL DISCHARGE THEIR DUTIES WITH RESPECT TO PROGRAM 917
FUNDS WITH THE CARE AND DILIGENCE THAT A PRUDENT PERSON FAMILIAR 919
WITH SUCH MATTERS AND WITH THE CHARACTER AND AIMS OF THE PROGRAM 920
WOULD USE.
(G) THE ASSETS OF THE PROGRAM SHALL BE PRESERVED, 922
INVESTED, AND EXPENDED SOLELY FOR THE PURPOSES OF THIS CHAPTER 923
AND SHALL NOT BE LOANED OR OTHERWISE TRANSFERRED OR USED BY THE 925
STATE FOR ANY OTHER PURPOSE. THIS SECTION SHALL NOT BE CONSTRUED
TO PROHIBIT THE AUTHORITY OR ITS INVESTMENT AGENTS FROM 927
INVESTING, BY PURCHASE OR OTHERWISE, IN BONDS, NOTES, OR OTHER 928
OBLIGATIONS OF THE STATE OR ANY AGENCY OR INSTRUMENTALITY OF THE 929
STATE. UNLESS OTHERWISE SPECIFIED BY THE AUTHORITY, ASSETS OF 930
THE PROGRAM SHALL BE EXPENDED IN THE FOLLOWING ORDER OF PRIORITY: 931
(1) TO MAKE PAYMENTS ON BEHALF OF BENEFICIARIES; 933
(2) TO MAKE REFUNDS UPON TERMINATION OF VARIABLE COLLEGE 935
SAVINGS PROGRAM CONTRACTS; 936
(3) TO PAY THE COSTS OF PROGRAM ADMINISTRATION AND 938
OPERATIONS.
(H) NO RECORDS OF THE AUTHORITY INDICATING THE IDENTITY OF 940
CONTRIBUTORS AND BENEFICIARIES UNDER THE PROGRAM OR AMOUNTS 941
CONTRIBUTED TO, EARNED BY, OR DISTRIBUTED FROM PROGRAM ACCOUNTS 942
ARE PUBLIC RECORDS WITHIN THE MEANING OF SECTION 149.43 OF THE 943
REVISED CODE.
Sec. 3334.20. (A) THIS SECTION APPLIES ONLY IF THE OHIO 945
TUITION TRUST AUTHORITY DOES NOT CONTRACT WITH AN INVESTMENT 947
AGENT FOR THE PURPOSES SET FORTH IN SECTION 3334.19 OF THE 948
REVISED CODE. 949
(B) THE ASSETS OF THE AUTHORITY RECEIVED UNDER THE 951
23
VARIABLE COLLEGE SAVINGS PROGRAM SHALL BE PLACED IN A FUND, WHICH 952
IS HEREBY CREATED AND SHALL BE KNOWN AS THE VARIABLE COLLEGE 954
SAVINGS PROGRAM FUND. THE FUND SHALL BE IN THE CUSTODY OF THE 955
TREASURER OF STATE, BUT SHALL NOT BE PART OF THE STATE TREASURY. 956
ALL SUCH ASSETS AND THE INTEREST AND INVESTMENT INCOME EARNED BY 957
THE FUND, AND ALL OTHER RECEIPTS OF THE AUTHORITY FROM ANY OTHER 958
SOURCE THAT THE AUTHORITY DETERMINES APPROPRIATE, SHALL BE 959
DEPOSITED IN THE FUND. NO CONTRIBUTOR OR BENEFICIARY UNDER THE 960
VARIABLE COLLEGE SAVINGS PROGRAM SHALL HAVE ANY CLAIM AGAINST THE 961
FUNDS OF ANY STATE INSTITUTION OF HIGHER EDUCATION. ALL 962
INVESTMENT FEES AND OTHER COSTS INCURRED IN CONNECTION WITH THE 963
EXERCISE OF THE INVESTMENT POWERS OF THE AUTHORITY PURSUANT TO
DIVISIONS (D) AND (E) OF THIS SECTION SHALL BE PAID FROM THE 964
ASSETS OF THE FUND. 965
(C)(1) EXCEPT AS MAY BE PROVIDED IN AN AGREEMENT UNDER 967
DIVISION (A)(19) OF SECTION 3334.08 OF THE REVISED CODE, ALL 968
DISBURSEMENTS FROM THE FUND SHALL BE MADE BY THE TREASURER OF 970
STATE ON ORDER OF A DESIGNEE OF THE AUTHORITY. 971
(2) THE TREASURER OF STATE SHALL DEPOSIT ANY PORTION OF 973
THE FUND NOT NEEDED FOR IMMEDIATE USE IN THE SAME MANNER AS STATE 974
FUNDS ARE DEPOSITED. 975
(D) THE AUTHORITY IS THE TRUSTEE OF THE FUND. THE 977
AUTHORITY SHALL HAVE FULL POWER TO INVEST THE ASSETS OF THE FUND 978
AND IN EXERCISING THIS POWER SHALL BE SUBJECT TO THE LIMITATIONS 979
AND REQUIREMENTS CONTAINED IN DIVISIONS (H) TO (J) OF THIS 981
SECTION AND SECTIONS 145.112 AND 145.113 OF THE REVISED CODE. 982
THE EVIDENCES OF TITLE TO ALL INVESTMENTS SHALL BE DELIVERED TO 983
THE TREASURER OF STATE OR TO A QUALIFIED TRUSTEE DESIGNATED BY
THE TREASURER OF STATE AS PROVIDED IN SECTION 135.18 OF THE 984
REVISED CODE. 985
(E) THE PUBLIC EMPLOYEES RETIREMENT BOARD SHALL, WITH THE 987
APPROVAL OF THE AUTHORITY, EXERCISE THE INVESTMENT POWERS OF THE 988
AUTHORITY AS SET FORTH IN DIVISION (D) OF THIS SECTION UNTIL THE 990
AUTHORITY DETERMINES THAT ASSUMPTION AND EXERCISE BY THE
24
AUTHORITY OF THE INVESTMENT POWERS IS FINANCIALLY AND 991
ADMINISTRATIVELY FEASIBLE. THE INVESTMENT POWERS SHALL BE 992
EXERCISED BY THE PUBLIC EMPLOYEES RETIREMENT BOARD IN A MANNER 993
AGREED UPON BY THE AUTHORITY THAT MAXIMIZES THE RETURN ON 994
INVESTMENT AND MINIMIZES THE ADMINISTRATIVE EXPENSES. 995
(F) IN JANUARY OF EACH YEAR THE AUTHORITY SHALL REPORT TO 998
EACH PERSON WHO RECEIVED ANY PAYMENTS OR REFUNDS FROM THE
AUTHORITY DURING THE PRECEDING YEAR INFORMATION RELATIVE TO THE 999
VALUE OF THE PAYMENTS OR REFUNDS TO ASSIST IN DETERMINING THAT 1,000
PERSON'S TAX LIABILITY.
(G) THE AUTHORITY SHALL REPORT TO THE TAX COMMISSIONER ANY 1,002
INFORMATION, AT THE TIMES AS THE TAX COMMISSIONER REQUIRES, TO 1,003
DETERMINE ANY TAX LIABILITY THAT A PERSON MAY HAVE INCURRED 1,004
DURING THE PRECEDING YEAR AS A RESULT OF HAVING RECEIVED ANY 1,005
PAYMENTS OR REFUNDS FROM THE AUTHORITY.
(H) IN EXERCISING ITS FIDUCIARY RESPONSIBILITY WITH 1,007
RESPECT TO THE INVESTMENT OF THE ASSETS OF THE FUND, IT SHALL BE 1,008
THE INTENT OF THE AUTHORITY TO GIVE CONSIDERATION TO INVESTMENTS 1,009
THAT ENHANCE THE GENERAL WELFARE OF THE STATE AND ITS CITIZENS 1,010
WHERE THE INVESTMENTS OFFER QUALITY, RETURN, AND SAFETY 1,011
COMPARABLE TO OTHER INVESTMENTS CURRENTLY AVAILABLE TO THE 1,012
AUTHORITY. IN FULFILLING THIS INTENT, EQUAL CONSIDERATION SHALL 1,013
ALSO BE GIVEN TO INVESTMENTS OTHERWISE QUALIFYING UNDER THIS 1,014
SECTION THAT INVOLVE MINORITY OWNED AND CONTROLLED FIRMS AND 1,015
FIRMS OWNED AND CONTROLLED BY WOMEN, EITHER ALONE OR IN JOINT 1,016
VENTURE WITH OTHER FIRMS.
THE AUTHORITY SHALL ADOPT, IN REGULAR MEETING, POLICIES, 1,018
OBJECTIVES, OR CRITERIA FOR THE OPERATION OF THE INVESTMENT PLAN 1,019
THAT INCLUDE ASSET ALLOCATION TARGETS AND RANGES, RISK FACTORS, 1,020
ASSET CLASS BENCHMARKS, TIME HORIZONS, TOTAL RETURN OBJECTIVES, 1,021
AND PERFORMANCE EVALUATION GUIDELINES. IN ADOPTING POLICIES AND 1,022
CRITERIA FOR THE SELECTION OF ENTITIES WITH WHOM THE AUTHORITY 1,023
MAY CONTRACT FOR ASSISTANCE IN THE ADMINISTRATION OF THE ASSETS 1,024
OF THE FUND, THE AUTHORITY SHALL GIVE EQUAL CONSIDERATION TO 1,025
25
MINORITY OWNED AND CONTROLLED FIRMS, FIRMS OWNED AND CONTROLLED 1,026
BY WOMEN, AND VENTURES INVOLVING MINORITY OWNED AND CONTROLLED 1,027
FIRMS AND FIRMS OWNED AND CONTROLLED BY WOMEN THAT OTHERWISE MEET 1,028
THE POLICIES AND CRITERIA ESTABLISHED BY THE AUTHORITY. 1,029
AMENDMENTS AND ADDITIONS TO THE POLICIES AND CRITERIA SHALL BE 1,030
ADOPTED IN REGULAR MEETING. THE AUTHORITY SHALL PUBLISH ITS 1,031
POLICIES, OBJECTIVES, AND CRITERIA UNDER THIS PROVISION NO LESS 1,032
OFTEN THAN ANNUALLY AND SHALL MAKE COPIES AVAILABLE TO INTERESTED 1,033
PARTIES.
WHEN REPORTING ON THE PERFORMANCE OF INVESTMENTS, THE 1,035
AUTHORITY SHALL COMPLY WITH THE PERFORMANCE PRESENTATION 1,036
STANDARDS ESTABLISHED BY THE ASSOCIATION FOR INVESTMENT 1,037
MANAGEMENT AND RESEARCH.
(I) ALL INVESTMENTS SHALL BE PURCHASED AT CURRENT MARKET 1,039
PRICES AND THE EVIDENCES OF TITLE TO THE INVESTMENTS SHALL BE 1,040
PLACED IN THE HANDS OF THE TREASURER OF STATE, WHO IS HEREBY 1,042
DESIGNATED AS CUSTODIAN THEREOF, OR IN THE HANDS OF THE TREASURER 1,043
OF STATE'S AUTHORIZED AGENT. THE TREASURER OF STATE OR THE AGENT 1,044
SHALL COLLECT THE PRINCIPAL, DIVIDENDS, DISTRIBUTIONS, AND 1,045
INTEREST THEREON AS THEY BECOME DUE AND PAYABLE AND PLACE THEM
WHEN SO COLLECTED INTO THE CUSTODIAL FUND. 1,046
THE TREASURER OF STATE SHALL PAY FOR INVESTMENTS PURCHASED 1,048
BY THE AUTHORITY ON RECEIPT OF WRITTEN OR ELECTRONIC INSTRUCTIONS 1,049
FROM THE AUTHORITY OR THE AUTHORITY'S DESIGNATED AGENT 1,050
AUTHORIZING THE PURCHASE AND PENDING RECEIPT OF THE EVIDENCE OF 1,051
TITLE OF THE INVESTMENT BY THE TREASURER OF STATE OR THE 1,052
TREASURER OF STATE'S AUTHORIZED AGENT. THE AUTHORITY MAY SELL 1,053
INVESTMENTS HELD BY THE AUTHORITY, AND THE TREASURER OF STATE OR 1,054
THE TREASURER OF STATE'S AUTHORIZED AGENT SHALL ACCEPT PAYMENT 1,055
FROM THE PURCHASER AND DELIVER EVIDENCE OF TITLE OF THE 1,056
INVESTMENT TO THE PURCHASER ON RECEIPT OF WRITTEN OR ELECTRONIC 1,057
INSTRUCTIONS FROM THE AUTHORITY OR THE AUTHORITY'S DESIGNATED 1,058
AGENT AUTHORIZING THE SALE, AND PENDING RECEIPT OF THE MONEYS FOR 1,059
THE INVESTMENTS. THE AMOUNT RECEIVED SHALL BE PLACED IN THE 1,060
26
CUSTODIAL FUND. THE AUTHORITY AND THE TREASURER OF STATE MAY 1,061
ENTER INTO AGREEMENTS TO ESTABLISH PROCEDURES FOR THE PURCHASE
AND SALE OF INVESTMENTS UNDER THIS DIVISION AND THE CUSTODY OF 1,062
THE INVESTMENTS. 1,063
NO PURCHASE OR SALE OF ANY INVESTMENT SHALL BE MADE UNDER 1,065
THIS SECTION EXCEPT AS AUTHORIZED BY THE AUTHORITY. 1,066
ANY STATEMENT OF FINANCIAL POSITION DISTRIBUTED BY THE 1,068
AUTHORITY SHALL INCLUDE FAIR VALUE, AS OF THE STATEMENT DATE, OF 1,069
ALL INVESTMENTS HELD BY THE AUTHORITY UNDER THIS SECTION. 1,070
Sec. 3334.21. THE VARIABLE COLLEGE SAVINGS PROGRAM MAY BE 1,072
TERMINATED BY STATUTE OR UPON THE DETERMINATION OF THE OHIO 1,073
TUITION TRUST AUTHORITY THAT THE PROGRAM IS NOT FINANCIALLY 1,074
FEASIBLE. UPON TERMINATION, ALL AMOUNTS HELD IN PROGRAM ACCOUNTS 1,075
SHALL BE RETURNED TO ACCOUNT OWNERS, TO THE EXTENT POSSIBLE, AND 1,076
ANY UNCLAIMED ASSETS IN THE PROGRAM SHALL BE TRANSFERRED TO THE 1,077
UNCLAIMED FUNDS TRUST FUND AND DISPOSED OF IN ACCORDANCE WITH 1,078
SECTION 169.05 OF THE REVISED CODE.
Sec. 5747.01. Except as otherwise expressly provided or 1,087
clearly appearing from the context, any term used in this chapter 1,088
has the same meaning as when used in a comparable context in the 1,089
Internal Revenue Code, and all other statutes of the United 1,090
States relating to federal income taxes. 1,091
As used in this chapter: 1,093
(A) "Adjusted gross income" or "Ohio adjusted gross 1,095
income" means adjusted gross income as defined and used in the 1,096
Internal Revenue Code, adjusted as provided in this section: 1,097
(1) Add interest or dividends on obligations or securities 1,099
of any state or of any political subdivision or authority of any 1,100
state, other than this state and its subdivisions and 1,101
authorities.
(2) Add interest or dividends on obligations of any 1,103
authority, commission, instrumentality, territory, or possession 1,104
of the United States that are exempt from federal income taxes 1,105
but not from state income taxes. 1,106
27
(3) Deduct interest or dividends on obligations of the 1,108
United States and its territories and possessions or of any 1,109
authority, commission, or instrumentality of the United States to 1,110
the extent included in federal adjusted gross income but exempt 1,111
from state income taxes under the laws of the United States. 1,112
(4) Deduct disability and survivor's benefits to the 1,114
extent included in federal adjusted gross income. 1,115
(5) Deduct benefits under Title II of the Social Security 1,117
Act and tier 1 railroad retirement benefits to the extent 1,118
included in federal adjusted gross income under section 86 of the 1,119
Internal Revenue Code. 1,120
(6) Add, in the case of a taxpayer who is a beneficiary of 1,122
a trust that makes an accumulation distribution as defined in 1,123
section 665 of the Internal Revenue Code, the portion, if any, of 1,124
such distribution that does not exceed the undistributed net 1,125
income of the trust for the three taxable years preceding the 1,126
taxable year in which the distribution is made. "Undistributed 1,127
net income of a trust" means the taxable income of the trust 1,128
increased by (a)(i) the additions to adjusted gross income 1,129
required under division (A) of this section and (ii) the personal 1,130
exemptions allowed to the trust pursuant to section 642(b) of the 1,131
Internal Revenue Code, and decreased by (b)(i) the deductions to 1,132
adjusted gross income required under division (A) of this 1,133
section, (ii) the amount of federal income taxes attributable to 1,134
such income, and (iii) the amount of taxable income that has been 1,135
included in the adjusted gross income of a beneficiary by reason 1,136
of a prior accumulation distribution. Any undistributed net 1,137
income included in the adjusted gross income of a beneficiary 1,138
shall reduce the undistributed net income of the trust commencing 1,139
with the earliest years of the accumulation period. 1,140
(7) Deduct the amount of wages and salaries, if any, not 1,142
otherwise allowable as a deduction but that would have been 1,143
allowable as a deduction in computing federal adjusted gross 1,144
income for the taxable year, had the targeted jobs credit allowed 1,145
28
and determined under sections 38, 51, and 52 of the Internal 1,146
Revenue Code not been in effect. 1,147
(8) Deduct any interest or interest equivalent on public 1,149
obligations and purchase obligations to the extent included in 1,150
federal adjusted gross income. 1,151
(9) Add any loss or deduct any gain resulting from the 1,153
sale, exchange, or other disposition of public obligations to the 1,154
extent included in federal adjusted gross income. 1,155
(10) Regarding tuition credits purchased under Chapter 1,157
3334. of the Revised Code: 1,159
(a) Deduct the following: 1,161
(i) For credits that as of the end of the taxable year 1,164
have not been refunded pursuant to the termination of a tuition
payment contract under section 3334.10 of the Revised Code, the 1,166
amount of income related to the credits, to the extent included 1,167
in federal adjusted gross income;
(ii) For credits that during the taxable year have been 1,170
refunded pursuant to the termination of a tuition payment
contract under section 3334.10 of the Revised Code, the excess of 1,171
the total purchase price of the tuition credits refunded over the 1,172
amount of refund, to the extent the amount of the excess was not 1,173
deducted in determining federal adjusted gross income. 1,174
(b) Add the following: 1,176
(i) For credits that as of the end of the taxable year 1,179
have not been refunded pursuant to the termination of a tuition
payment contract under section 3334.10 of the Revised Code, the 1,180
amount of loss related to the credits, to the extent the amount 1,181
of the loss was deducted in determining federal adjusted gross 1,182
income;
(ii) For credits that during the taxable year have been 1,185
refunded pursuant to the termination of a tuition payment
contract under section 3334.10 of the Revised Code, the excess of 1,187
the amount of refund over the purchase price of each tuition 1,188
credit refunded, to the extent not included in federal adjusted 1,189
29
gross income DEDUCT OR ADD AMOUNTS RELATED TO TUITION CREDITS 1,190
PURCHASED OR CONTRIBUTIONS TO VARIABLE COLLEGE SAVINGS PROGRAM 1,191
ACCOUNTS MADE AS PROVIDED IN SECTION 5747.70 OF THE REVISED CODE. 1,192
(11)(a) Deduct, to the extent not otherwise allowable as a 1,194
deduction or exclusion in computing federal or Ohio adjusted 1,195
gross income for the taxable year, the amount the taxpayer paid 1,196
during the taxable year for medical care insurance and qualified 1,197
long-term care insurance for the taxpayer, the taxpayer's spouse, 1,198
and dependents. No deduction for medical care insurance under 1,199
division (A)(11) of this section shall be allowed either to any
taxpayer who is eligible to participate in any subsidized health 1,200
plan maintained by any employer of the taxpayer or of the 1,201
taxpayer's spouse, or to any taxpayer who is entitled to, or on 1,202
application would be entitled to, benefits under part A of Title 1,203
XVIII of the "Social Security Act," 49 Stat. 620 (1935), 42 1,204
U.S.C. 301, as amended. For the purposes of division (A)(11)(a) 1,205
of this section, "subsidized health plan" means a health plan for 1,206
which the employer pays any portion of the plan's cost. The 1,207
deduction allowed under division (A)(11)(a) of this section shall 1,208
be the net of any related premium refunds, related premium 1,209
reimbursements, or related insurance premium dividends received 1,210
during the taxable year. 1,211
(b) Deduct, to the extent not otherwise deducted or 1,213
excluded in computing federal or Ohio adjusted gross income 1,214
during the taxable year, the amount the taxpayer paid during the 1,215
taxable year, not compensated for by any insurance or otherwise, 1,216
for medical care of the taxpayer, the taxpayer's spouse, and 1,217
dependents, to the extent the expenses exceed seven and one-half 1,218
per cent of the taxpayer's federal adjusted gross income. 1,219
(c) For purposes of division (A)(11) of this section, 1,221
"medical care" has the meaning given in section 213 of the 1,222
Internal Revenue Code, subject to the special rules, limitations, 1,223
and exclusions set forth therein, and "qualified long-term care" 1,224
has the same meaning given in section 7702(B)(b) of the Internal 1,225
30
Revenue Code.
(12)(a) Deduct any amount included in federal adjusted 1,227
gross income solely because the amount represents a reimbursement 1,228
or refund of expenses that in any year the taxpayer had deducted 1,230
as an itemized deduction pursuant to section 63 of the Internal 1,231
Revenue Code and applicable United States department of the 1,232
treasury regulations. The deduction otherwise allowed under 1,233
division (A)(12)(a) of this section shall be reduced to the 1,234
extent the reimbursement is attributable to an amount the 1,235
taxpayer deducted under this section in any taxable year. 1,236
(b) Add any amount not otherwise included in Ohio adjusted 1,238
gross income for any taxable year to the extent that the amount 1,239
is attributable to the recovery during the taxable year of any 1,240
amount deducted or excluded in computing federal or Ohio adjusted 1,241
gross income in any taxable year. 1,242
(13) Deduct any portion of the deduction described in 1,244
section 1341(a)(2) of the Internal Revenue Code, for repaying 1,245
previously reported income received under a claim of right, that 1,246
meets both of the following requirements: 1,247
(a) It is allowable for repayment of an item that was 1,249
included in the taxpayer's adjusted gross income for a prior 1,250
taxable year and did not qualify for a credit under division (A) 1,251
or (B) of section 5747.05 of the Revised Code for that year; 1,252
(b) It does not otherwise reduce the taxpayer's adjusted 1,254
gross income for the current or any other taxable year. 1,255
(14) Deduct an amount equal to the deposits made to, and 1,257
net investment earnings of, a medical savings account during the 1,258
taxable year, in accordance with section 3924.66 of the Revised 1,259
Code. The deduction allowed by division (A)(14) of this section 1,260
does not apply to medical savings account deposits and earnings 1,261
otherwise deducted or excluded for the current or any other 1,262
taxable year from the taxpayer's federal adjusted gross income. 1,263
(15)(a) Add an amount equal to the funds withdrawn from a 1,265
medical savings account during the taxable year, and the net 1,266
31
investment earnings on those funds, when the funds withdrawn were 1,267
used for any purpose other than to reimburse an account holder 1,268
for, or to pay, eligible medical expenses, in accordance with 1,269
section 3924.66 of the Revised Code;
(b) Add the amounts distributed from a medical savings 1,271
account under division (A)(2) of section 3924.68 of the Revised 1,272
Code during the taxable year. 1,273
(16) Add any amount claimed as a credit under section 1,275
5747.059 of the Revised Code to the extent that such amount 1,276
satisfies either of the following:
(a) The amount was deducted or excluded from the 1,278
computation of the taxpayer's federal adjusted gross income as 1,279
required to be reported for the taxpayer's taxable year under the 1,280
Internal Revenue Code;
(b) The amount resulted in a reduction of the taxpayer's 1,282
federal adjusted gross income as required to be reported for any 1,283
of the taxpayer's taxable years under the Internal Revenue Code. 1,284
(17) Deduct the amount contributed by the taxpayer to an 1,286
individual development account program established by a county 1,287
department of human services pursuant to sections 329.11 to 1,288
329.14 of the Revised Code for the purpose of matching funds 1,289
deposited by program participants. On request of the tax 1,290
commissioner, the taxpayer shall provide any information that, in
the tax commissioner's opinion, is necessary to establish the 1,291
amount deducted under division (A)(17) of this section. 1,292
(18) Beginning in taxable year 2001, if the taxpayer is 1,294
married and files a joint return and the combined federal 1,296
adjusted gross income of the taxpayer and the taxpayer's spouse 1,297
for the taxable year does not exceed one hundred thousand
dollars, or if the taxpayer is single and has a federal adjusted 1,298
gross income for the taxable year not exceeding fifty thousand 1,300
dollars, deduct amounts paid during the taxable year for 1,301
qualified tuition and fees paid to an eligible institution for 1,302
the taxpayer, the taxpayer's spouse, or any dependent of the
32
taxpayer, who is a resident of this state and is enrolled in or 1,303
attending a program that culminates in a degree or diploma at an 1,304
eligible institution. The deduction may be claimed only to the 1,305
extent that qualified tuition and fees are not otherwise deducted 1,306
or excluded for any taxable year from federal or Ohio adjusted 1,307
gross income. The deduction may not be claimed for educational 1,308
expenses for which the taxpayer claims a credit under section 1,309
5747.27 of the Revised Code.
(19) Add any reimbursement received during the taxable 1,311
year of any amount the taxpayer deducted under division (A)(18) 1,312
of this section in any previous taxable year to the extent the 1,313
amount is not otherwise included in Ohio adjusted gross income. 1,314
(B) "Business income" means income arising from 1,316
transactions, activities, and sources in the regular course of a 1,317
trade or business and includes income from tangible and 1,318
intangible property if the acquisition, rental, management, and 1,319
disposition of the property constitute integral parts of the 1,320
regular course of a trade or business operation. 1,321
(C) "Nonbusiness income" means all income other than 1,323
business income and may include, but is not limited to, 1,324
compensation, rents and royalties from real or tangible personal 1,325
property, capital gains, interest, dividends and distributions, 1,326
patent or copyright royalties, or lottery winnings, prizes, and 1,327
awards. 1,328
(D) "Compensation" means any form of remuneration paid to 1,330
an employee for personal services. 1,331
(E) "Fiduciary" means a guardian, trustee, executor, 1,333
administrator, receiver, conservator, or any other person acting 1,334
in any fiduciary capacity for any individual, trust, or estate. 1,335
(F) "Fiscal year" means an accounting period of twelve 1,337
months ending on the last day of any month other than December. 1,338
(G) "Individual" means any natural person. 1,340
(H) "Internal Revenue Code" means the "Internal Revenue 1,342
Code of 1986," 100 Stat. 2085, 26 U.S.C.A. 1, as amended. 1,343
33
(I) "Resident" means: 1,345
(1) An individual who is domiciled in this state, subject 1,347
to section 5747.24 of the Revised Code; 1,348
(2) The estate of a decedent who at the time of death was 1,351
domiciled in this state. The domicile tests of section 5747.24 1,352
of the Revised Code and any election under section 5747.25 of the 1,353
Revised Code are not controlling for purposes of division (I)(2) 1,354
of this section.
(J) "Nonresident" means an individual or estate that is 1,356
not a resident. An individual who is a resident for only part of 1,357
a taxable year is a nonresident for the remainder of that taxable 1,358
year. 1,359
(K) "Pass-through entity" has the same meaning as in 1,361
section 5733.04 of the Revised Code. 1,362
(L) "Return" means the notifications and reports required 1,364
to be filed pursuant to this chapter for the purpose of reporting 1,365
the tax due and includes declarations of estimated tax when so 1,366
required. 1,367
(M) "Taxable year" means the calendar year or the 1,369
taxpayer's fiscal year ending during the calendar year, or 1,370
fractional part thereof, upon which the adjusted gross income is 1,371
calculated pursuant to this chapter. 1,372
(N) "Taxpayer" means any person subject to the tax imposed 1,374
by section 5747.02 of the Revised Code or any pass-through entity 1,375
that makes the election under division (D) of section 5747.08 of 1,376
the Revised Code.
(O) "Dependents" means dependents as defined in the 1,378
Internal Revenue Code and as claimed in the taxpayer's federal 1,379
income tax return for the taxable year or which the taxpayer 1,380
would have been permitted to claim had the taxpayer filed a 1,381
federal income tax return. 1,383
(P) "Principal county of employment" means, in the case of 1,385
a nonresident, the county within the state in which a taxpayer 1,386
performs services for an employer or, if those services are 1,387
34
performed in more than one county, the county in which the major 1,388
portion of the services are performed. 1,389
(Q) As used in sections 5747.50 to 5747.55 of the Revised 1,391
Code:
(1) "Subdivision" means any county, municipal corporation, 1,393
park district, or township. 1,394
(2) "Essential local government purposes" includes all 1,396
functions that any subdivision is required by general law to 1,397
exercise, including like functions that are exercised under a 1,398
charter adopted pursuant to the Ohio Constitution. 1,399
(R) "Overpayment" means any amount already paid that 1,401
exceeds the figure determined to be the correct amount of the 1,402
tax. 1,403
(S) "Taxable income" applies to estates only and means 1,405
taxable income as defined and used in the Internal Revenue Code 1,406
adjusted as follows: 1,407
(1) Add interest or dividends on obligations or securities 1,409
of any state or of any political subdivision or authority of any 1,410
state, other than this state and its subdivisions and 1,411
authorities; 1,412
(2) Add interest or dividends on obligations of any 1,414
authority, commission, instrumentality, territory, or possession 1,415
of the United States that are exempt from federal income taxes 1,416
but not from state income taxes; 1,417
(3) Add the amount of personal exemption allowed to the 1,419
estate pursuant to section 642(b) of the Internal Revenue Code; 1,420
(4) Deduct interest or dividends on obligations of the 1,422
United States and its territories and possessions or of any 1,423
authority, commission, or instrumentality of the United States 1,424
that are exempt from state taxes under the laws of the United 1,425
States; 1,426
(5) Deduct the amount of wages and salaries, if any, not 1,428
otherwise allowable as a deduction but that would have been 1,429
allowable as a deduction in computing federal taxable income for 1,430
35
the taxable year, had the targeted jobs credit allowed under 1,431
sections 38, 51, and 52 of the Internal Revenue Code not been in 1,432
effect; 1,433
(6) Deduct any interest or interest equivalent on public 1,435
obligations and purchase obligations to the extent included in 1,436
federal taxable income; 1,437
(7) Add any loss or deduct any gain resulting from sale, 1,439
exchange, or other disposition of public obligations to the 1,440
extent included in federal taxable income; 1,441
(8) Except in the case of the final return of an estate, 1,443
add any amount deducted by the taxpayer on both its Ohio estate 1,444
tax return pursuant to section 5731.14 of the Revised Code, and 1,445
on its federal income tax return in determining either federal 1,446
adjusted gross income or federal taxable income; 1,447
(9)(a) Deduct any amount included in federal taxable 1,449
income solely because the amount represents a reimbursement or 1,450
refund of expenses that in a previous year the decedent had 1,451
deducted as an itemized deduction pursuant to section 63 of the 1,452
Internal Revenue Code and applicable treasury regulations. The 1,454
deduction otherwise allowed under division (S)(9)(a) of this 1,455
section shall be reduced to the extent the reimbursement is 1,456
attributable to an amount the taxpayer or decedent deducted under 1,457
this section in any taxable year. 1,458
(b) Add any amount not otherwise included in Ohio taxable 1,460
income for any taxable year to the extent that the amount is 1,461
attributable to the recovery during the taxable year of any 1,462
amount deducted or excluded in computing federal or Ohio taxable 1,463
income in any taxable year. 1,464
(10) Deduct any portion of the deduction described in 1,466
section 1341(a)(2) of the Internal Revenue Code, for repaying 1,467
previously reported income received under a claim of right, that 1,468
meets both of the following requirements: 1,469
(a) It is allowable for repayment of an item that was 1,471
included in the taxpayer's taxable income or the decedent's 1,472
36
adjusted gross income for a prior taxable year and did not 1,473
qualify for a credit under division (A) or (B) of section 5747.05 1,474
of the Revised Code for that year. 1,475
(b) It does not otherwise reduce the taxpayer's taxable 1,477
income or the decedent's adjusted gross income for the current or 1,478
any other taxable year. 1,479
(11) Add any amount claimed as a credit under section 1,481
5747.059 of the Revised Code to the extent that the amount 1,482
satisfies either of the following: 1,483
(a) The amount was deducted or excluded from the 1,485
computation of the taxpayer's federal taxable income as required 1,486
to be reported for the taxpayer's taxable year under the Internal 1,487
Revenue Code;
(b) The amount resulted in a reduction in the taxpayer's 1,489
federal taxable income as required to be reported for any of the 1,490
taxpayer's taxable years under the Internal Revenue Code. 1,491
(T) "School district income" and "school district income 1,493
tax" have the same meanings as in section 5748.01 of the Revised 1,494
Code. 1,495
(U) As used in divisions (A)(8), (A)(9), (S)(6), and 1,497
(S)(7) of this section, "public obligations," "purchase 1,498
obligations," and "interest or interest equivalent" have the same 1,499
meanings as in section 5709.76 of the Revised Code. 1,500
(V) "Limited liability company" means any limited 1,502
liability company formed under Chapter 1705. of the Revised Code 1,503
or under the laws of any other state. 1,504
(W) "Pass-through entity investor" means any person who, 1,506
during any portion of a taxable year of a pass-through entity, is 1,507
a partner, member, shareholder, or investor in that pass-through 1,508
entity.
(X) "Banking day" has the same meaning as in section 1,510
1304.01 of the Revised Code. 1,511
(Y) "Month" means a calendar month. 1,513
(Z) "Quarter" means the first three months, the second 1,515
37
three months, the third three months, or the last three months of 1,516
the taxpayer's taxable year.
(AA)(1) "Eligible institution" means a state university or 1,518
state institution of higher education as defined in section 1,519
3345.011 of the Revised Code, or a private, nonprofit college, 1,520
university, or other post-secondary institution located in this 1,521
state that possesses a certificate of authorization issued by the 1,522
Ohio board of regents pursuant to Chapter 1713. of the Revised
Code or a certificate of registration issued by the state board 1,523
of proprietary school registration under Chapter 3332. of the 1,524
Revised Code.
(2) "Qualified tuition and fees" means tuition and fees 1,526
imposed by an eligible institution as a condition of enrollment 1,527
or attendance, not exceeding two thousand five hundred dollars in 1,528
each of the individual's first two years of post-secondary 1,529
education. If the individual is a part-time student, "qualified 1,530
tuition and fees" includes tuition and fees paid for the academic
equivalent of the first two years of post-secondary education 1,531
during a maximum of five taxable years, not exceeding a total of 1,532
five thousand dollars. "Qualified tuition and fees" does not 1,533
include:
(a) Expenses for any course or activity involving sports, 1,535
games, or hobbies unless the course or activity is part of the 1,536
individual's degree or diploma program; 1,537
(b) The cost of books, room and board, student activity 1,539
fees, athletic fees, insurance expenses, or other expenses 1,540
unrelated to the individual's academic course of instruction; 1,541
(c) Tuition, fees, or other expenses paid or reimbursed 1,543
through an employer, scholarship, grant in aid, or other 1,544
educational benefit program.
(BB) Any term used in this chapter that is not otherwise 1,546
defined in this section and that is not used in a comparable 1,547
context in the Internal Revenue Code and other statutes of the 1,548
United States relating to federal income taxes has the same 1,549
38
meaning as in section 5733.40 of the Revised Code. 1,550
Sec. 5747.70. (A) IN COMPUTING OHIO ADJUSTED GROSS 1,552
INCOME, A DEDUCTION FROM FEDERAL ADJUSTED GROSS INCOME IS ALLOWED 1,553
TO A CONTRIBUTOR FOR THE AMOUNT CONTRIBUTED DURING THE TAXABLE 1,554
YEAR TO A VARIABLE COLLEGE SAVINGS PROGRAM ACCOUNT AND TO A 1,556
PURCHASER OF TUITION CREDITS UNDER THE OHIO COLLEGE SAVINGS 1,557
PROGRAM CREATED BY CHAPTER 3334. OF THE REVISED CODE TO THE 1,559
EXTENT THAT THE AMOUNTS OF SUCH CONTRIBUTIONS AND PURCHASES WERE 1,560
NOT DEDUCTED IN DETERMINING THE CONTRIBUTOR'S OR PURCHASER'S 1,561
FEDERAL ADJUSTED GROSS INCOME FOR THE TAXABLE YEAR. THE COMBINED
AMOUNT OF CONTRIBUTIONS AND PURCHASES DEDUCTED ON THE INCOME TAX 1,562
RETURNS OF ANY PERSON AND THE PERSON'S SPOUSE IN ANY TAXABLE YEAR 1,563
IS LIMITED TO TWO THOUSAND DOLLARS FOR EACH BENEFICIARY FOR WHOM 1,564
CONTRIBUTIONS OR PURCHASES ARE MADE. IF THE COMBINED ANNUAL 1,565
CONTRIBUTIONS AND PURCHASES FOR A BENEFICIARY EXCEED TWO THOUSAND 1,566
DOLLARS, THE EXCESS MAY BE CARRIED FORWARD AND DEDUCTED IN FUTURE 1,567
TAXABLE YEARS UNTIL THE CONTRIBUTIONS AND PURCHASES HAVE BEEN 1,568
FULLY DEDUCTED. 1,569
(B) IN COMPUTING OHIO ADJUSTED GROSS INCOME, A DEDUCTION 1,571
FROM FEDERAL ADJUSTED GROSS INCOME IS ALLOWED FOR: 1,572
(1) INCOME RELATED TO CREDITS AND CONTRIBUTIONS THAT AS OF 1,574
THE END OF THE TAXABLE YEAR HAVE NOT BEEN REFUNDED PURSUANT TO 1,575
THE TERMINATION OF A TUITION PAYMENT CONTRACT OR VARIABLE COLLEGE 1,576
SAVINGS PROGRAM ACCOUNT UNDER SECTION 3334.10 OF THE REVISED 1,577
CODE, TO THE EXTENT THAT SUCH INCOME IS INCLUDED IN FEDERAL 1,578
ADJUSTED GROSS INCOME. 1,579
(2) THE EXCESS OF THE TOTAL PURCHASE PRICE OF TUITION 1,581
CREDITS REFUNDED DURING THE TAXABLE YEAR PURSUANT TO THE 1,582
TERMINATION OF A TUITION PAYMENT CONTRACT UNDER SECTION 3334.10 1,583
OF THE REVISED CODE OVER THE AMOUNT OF THE REFUND, TO THE EXTENT 1,584
THE AMOUNT OF THE EXCESS WAS NOT DEDUCTED IN DETERMINING FEDERAL 1,585
ADJUSTED GROSS INCOME. DIVISION (B)(2) OF THIS SECTION APPLIES 1,586
ONLY TO CREDITS FOR WHICH NO DEDUCTION WAS ALLOWABLE UNDER 1,587
DIVISION (A) OF THIS SECTION.
39
(C) IN COMPUTING OHIO ADJUSTED GROSS INCOME, THERE SHALL 1,589
BE ADDED TO FEDERAL ADJUSTED GROSS INCOME THE AMOUNT OF LOSS 1,590
RELATED TO CREDITS AND CONTRIBUTIONS THAT AS OF THE END OF THE 1,591
TAXABLE YEAR HAVE NOT BEEN REFUNDED PURSUANT TO THE TERMINATION 1,592
OF A TUITION PAYMENT CONTRACT OR VARIABLE COLLEGE SAVINGS PROGRAM 1,593
ACCOUNT UNDER SECTION 3334.10 OF THE REVISED CODE, TO THE EXTENT 1,594
THAT SUCH LOSS WAS DEDUCTED IN DETERMINING FEDERAL ADJUSTED GROSS 1,595
INCOME.
(D) FOR TAXABLE YEARS IN WHICH DISTRIBUTIONS OR REFUNDS 1,597
ARE MADE UNDER A TUITION PAYMENT OR VARIABLE COLLEGE SAVINGS 1,598
PROGRAM CONTRACT FOR ANY REASON OTHER THAN PAYMENT OF TUITION OR 1,599
OTHER HIGHER EDUCATION EXPENSES, OR THE BENEFICIARY'S DEATH, 1,600
DISABILITY, OR RECEIPT OF A SCHOLARSHIP AS DESCRIBED IN SECTION 1,601
3334.10 OF THE REVISED CODE:
(1) IF THE DISTRIBUTION OR REFUND IS PAID TO THE PURCHASER 1,603
OR CONTRIBUTOR OR BENEFICIARY, ANY PORTION OF THE DISTRIBUTION OR 1,604
REFUND NOT INCLUDED IN THE RECIPIENT'S FEDERAL ADJUSTED GROSS 1,605
INCOME SHALL BE ADDED TO THE RECIPIENT'S OHIO ADJUSTED GROSS 1,606
INCOME, EXCEPT THAT THE AMOUNT ADDED SHALL NOT EXCEED AMOUNTS 1,607
PREVIOUSLY DEDUCTED UNDER DIVISION (A) OF THIS SECTION LESS ANY 1,608
AMOUNTS ADDED UNDER DIVISION (D)(1) OF THIS SECTION IN A PRIOR 1,609
TAXABLE YEAR.
(2) IF AMOUNTS PAID BY A PURCHASER OR CONTRIBUTOR ON OR 1,611
AFTER JANUARY 1, 1999, ARE PAID TO SOMEONE OTHER THAN THE 1,612
PURCHASER OR CONTRIBUTOR OR BENEFICIARY, THE AMOUNT OF THE 1,613
PAYMENT NOT INCLUDED IN THE RECIPIENT'S FEDERAL ADJUSTED GROSS 1,614
INCOME, LESS ANY AMOUNTS ADDED UNDER DIVISION (D) OF THIS SECTION 1,615
IN A PRIOR TAXABLE YEAR, SHALL BE ADDED TO THE RECIPIENT'S OHIO 1,616
ADJUSTED GROSS INCOME.
Section 2. That existing sections 3334.01, 3334.02, 1,618
3334.08, 3334.10, 3334.11, 3334.12, 3334.15, and 5747.01 of the 1,619
Revised Code are hereby repealed. 1,620
Section 3. Section 5747.01 of the Revised Code, as amended 1,622
by this act, and section 5747.70 of the Revised Code, as enacted 1,623
40
by this act, apply to tax years beginning on and after January 1, 1,624
1999.
Section 4. Section 5747.01 of the Revised Code is 1,626
presented in this act as a composite of the section as amended by 1,627
both Am. Sub. H.B. 4 and Am. Sub. H.B. 282 of the 123rd General 1,628
Assembly, with the new language of neither of the acts shown in 1,629
capital letters. This is in recognition of the principle stated 1,630
in division (B) of section 1.52 of the Revised Code that such 1,631
amendments are to be harmonized where not substantively 1,632
irreconcilable and constitutes a legislative finding that such is 1,633
the resulting version in effect prior to the effective date of 1,634
this act.