As Reported by House Financial Institutions Committee 1
123rd General Assembly 4
Regular Session Sub. S. B. No. 161 5
1999-2000 6
SENATORS GARDNER-KEARNS-SCHAFRATH-SHOEMAKER-PRENTISS- 8
OELSLAGER-MUMPER-CUPP-FINGERHUT-SPADA-NEIN-DRAKE-LATELL- 9
WATTS-HAGAN-BRADY-DiDONATO-WHITE-WACHTMANN-ARMBRUSTER-LATTA- 10
REPRESENTATIVES ALLEN-AUSTRIA-BARNES-KILBANE-GERBERRY-JACOBSON- 11
D. MILLER-MYERS-OLMAN-ROBINSON-SALERNO-SCHULER-STAPLETON-TRAKAS- 12
VERICH 13
_________________________________________________________________ 14
A B I L L
To amend sections 3334.01, 3334.02, 3334.08, 16
3334.10, 3334.11, 3334.12, 3334.15, 3366.01, 17
3366.03, 3366.04, and 5747.01 and to enact
sections 3333.37, 3333.371, 3333.372, 3333.373, 18
3333.374, 3333.375, 3334.18, 3334.19, 3334.20, 19
3334.21, and 5747.70 of the Revised Code to
require the Ohio tuition trust authority to 20
establish a variable college savings program, to 21
make other changes in the Ohio College Savings
Program, to expand the scope of education loans 22
eligible to be financed by obligations issued by 23
the Treasurer of State, to authorize the "Ohio
Outstanding Scholarship" and "Ohio Priority Needs 24
Fellowship" Programs to be administered by the 25
Ohio Board of Regents, and to maintain the
provisions of this act on and after July 1, 2000, 26
by amending the version of section 5747.01 of the 27
Revised Code that takes effect on that date. 28
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO: 30
Section 1. That sections 3334.01, 3334.02, 3334.08, 32
3334.10, 3334.11, 3334.12, 3334.15, 3366.01, 3366.03, 3366.04, 33
2
and 5747.01 be amended and sections 3333.37, 3333.371, 3333.372, 34
3333.373, 3333.374, 3333.375, 3334.18, 3334.19, 3334.20, 3334.21, 36
and 5747.70 of the Revised Code be enacted to read as follows: 37
Sec. 3333.37. AS USED IN SECTIONS 3333.37 TO 3333.375 OF 39
THE REVISED CODE, THE FOLLOWING WORDS AND TERMS HAVE THE 40
FOLLOWING MEANINGS UNLESS THE CONTEXT INDICATES A DIFFERENT 41
MEANING OR INTENT:
(A) "COST OF ATTENDANCE" MEANS ALL COSTS OF A STUDENT 43
INCURRED IN CONNECTION WITH A PROGRAM OF STUDY AT AN ELIGIBLE 44
INSTITUTION, AS DETERMINED BY THE INSTITUTION, INCLUDING TUITION; 45
INSTRUCTIONAL FEES; ROOM AND BOARD; BOOKS, COMPUTERS, AND 46
SUPPLIES; AND OTHER RELATED FEES, CHARGES, AND EXPENSES.
(B) "ELIGIBLE INSTITUTION" MEANS EITHER OF THE FOLLOWING: 48
(1) A STATE-ASSISTED POST-SECONDARY EDUCATIONAL 50
INSTITUTION WITHIN THE STATE; 51
(2) A NONPROFIT INSTITUTION OF HIGHER EDUCATION WITHIN THE 53
STATE THAT HOLDS A CERTIFICATE OF AUTHORIZATION FROM THE OHIO 54
BOARD OF REGENTS PURSUANT TO CHAPTER 1713. OF THE REVISED CODE, 55
THAT IS ACCREDITED BY THE APPROPRIATE REGIONAL AND, WHEN 56
APPROPRIATE, PROFESSIONAL ACCREDITING ASSOCIATIONS WITHIN WHOSE 57
JURSIDICTION IT FALLS, IS AUTHORIZED TO GRANT A BACHELOR'S DEGREE 58
OR HIGHER, AND SATISFIES OTHER CONDITIONS AS SET FORTH IN THE 59
POLICY GUIDELINES.
(C) "ELIGIBLE STUDENT" MEANS EITHER OF THE FOLLOWING: 61
(1) AN UNDERGRADUATE STUDENT WHO MEETS ALL OF THE 63
FOLLOWING:
(a) IS A RESIDENT OF THIS STATE; 65
(b) HAS GRADUATED FROM ANY OHIO SECONDARY SCHOOL FOR WHICH 68
THE STATE BOARD OF EDUCATION PRESCRIBES MINIMUM STANDARDS IN
ACCORDANCE WITH SECTION 3301.07 OF THE REVISED CODE; 69
(c) IS ATTENDING AND IN GOOD STANDING, OR HAS BEEN 71
ACCEPTED FOR ATTENDANCE, AT ANY ELIGIBLE INSTITUTION AS A 72
FULL-TIME STUDENT TO PURSUE A BACHELOR'S DEGREE. 73
(2) A GRADUATE STUDENT WHO IS A RESIDENT OF THIS STATE, 76
3
AND IS ATTENDING AND IN GOOD STANDING, OR HAS BEEN ACCEPTED FOR 77
ATTENDANCE, AT ANY ELIGIBLE INSTITUTION.
(D) "FELLOWSHIP" OR "FELLOWSHIP PROGRAM" MEANS THE OHIO 79
PRIORITY NEEDS FELLOWSHIP CREATED BY SECTIONS 3333.37 TO 3333.375 80
OF THE REVISED CODE. 81
(E) "FULL-TIME STUDENT" HAS THE MEANING AS DEFINED BY RULE 83
OF THE OHIO BOARD OF REGENTS. 84
(F) "OHIO OUTSTANDING SCHOLAR" MEANS A STUDENT WHO IS THE 86
RECIPIENT OF A SCHOLARSHIP UNDER SECTIONS 3333.37 TO 3333.375 OF 87
THE REVISED CODE. 88
(G) "POLICY GUIDELINES" MEANS THE RULES ADOPTED BY THE 91
OHIO BOARD OF REGENTS PURSUANT TO SECTION 3333.374 OF THE REVISED 92
CODE.
(H) "PRIORITY NEEDS FELLOW" MEANS A STUDENT WHO IS THE 94
RECIPIENT OF A FELLOWSHIP UNDER SECTIONS 3333.37 TO 3333.375 OF 95
THE REVISED CODE. 96
(I) "PRIORITY NEEDS FIELD OF STUDY" MEANS THOSE ACADEMIC 98
MAJORS AND DISCIPLINES AS DETERMINED BY THE OHIO BOARD OF REGENTS 99
THAT SUPPORT THE PURPOSES AND INTENT OF SECTIONS 3333.37 TO 100
3333.375 OF THE REVISED CODE AS DESCRIBED IN SECTION 3333.371 OF 101
THE REVISED CODE. 102
(J) "SCHOLARSHIP" OR "SCHOLARSHIP PROGRAM" MEANS THE OHIO 105
OUTSTANDING SCHOLARSHIP CREATED BY SECTIONS 3333.37 TO 3333.375
OF THE REVISED CODE. 106
Sec. 3333.371. THE PURPOSES OF SECTIONS 3333.37 TO 108
3333.375 OF THE REVISED CODE ARE TO CREATE BOTH OF THE FOLLOWING: 109
(A) A SCHOLARSHIP PROGRAM FOR UNDERGRADUATE STUDENTS WHO 111
ARE RESIDENTS OF THIS STATE AND ARE PURSUING A BACCALAUREATE 113
DEGREE IN ANY FIELD OF STUDY TO ENCOURAGE THE RETENTION OF OHIO 114
OUTSTANDING STUDENTS;
(B) A FELLOWSHIP PROGRAM FOR GRADUATE STUDENTS WHO ARE 116
RESIDENTS OF THIS STATE FOR ATTENDANCE AT OHIO INSTITUTIONS OF 118
HIGHER EDUCATION TO ENCOURAGE SUCH STUDENTS TO PURSUE FIELDS OF 119
STUDY THAT ARE DETERMINED TO BE A PRIORITY FOR THE STATE IN
4
ADVANCING ITS ECONOMIC, TECHNOLOGICAL, AND ACADEMIC INTERESTS. 120
Sec. 3333.372. (A) THERE IS HEREBY AUTHORIZED THE "OHIO 122
OUTSTANDING SCHOLARSHIP" AND THE "OHIO PRIORITY NEEDS FELLOWSHIP" 123
PROGRAMS, WHICH SHALL BE ESTABLISHED AND ADMINISTERED BY THE OHIO 124
BOARD OF REGENTS FOR ELIGIBLE STUDENTS. THE PROGRAMS SHALL 125
PROVIDE SCHOLARSHIPS TO ELIGIBLE UNDERGRADUATE STUDENTS AND 127
FELLOWSHIPS TO ELIGIBLE GRADUATE STUDENTS, EQUAL TO THE ANNUAL 128
COST OF ATTENDANCE AT ELIGIBLE INSTITUTIONS, TO PURSUE
BACCALAUREATE DEGREES AND POST-BACCALAUREATE DEGREES IN PRIORITY 130
NEEDS FIELD OF STUDY CONSISTENT WITH SECTION 3333.371 OF THE 131
REVISED CODE.
(B) THE SCHOLARSHIP AND FELLOWSHIP PROGRAMS CREATED UNDER 133
SECTIONS 3333.37 TO 3333.375 OF THE REVISED CODE AND ANY 134
NECESSARY ADMINISTRATIVE EXPENSES SHALL BE FUNDED SOLELY FROM THE 135
OHIO OUTSTANDING SCHOLARSHIP AND THE OHIO PRIORITY NEEDS 136
FELLOWSHIP PROGRAMS PAYMENT FUNDS ESTABLISHED PURSUANT TO SECTION 137
3333.375 OF THE REVISED CODE. 138
(C) THE SCHOLARSHIPS SHALL BE RENEWABLE FOR EACH OF THREE 140
ADDITIONAL YEARS FOR UNDERGRADUATE STUDY, AND THE FELLOWSHIPS 142
SHALL BE RENEWABLE FOR EACH OF TWO ADDITIONAL YEARS FOR GRADUATE 143
STUDY, PROVIDED THE OHIO OUTSTANDING SCHOLAR OR PRIORITY NEEDS 144
FELLOW REMAINS AN ELIGIBLE STUDENT AT AN ELIGIBLE INSTITUTION. 145
Sec. 3333.373. (A) THE BOARD OF REGENTS SHALL ESTABLISH 147
THE RULES ADVISORY COMMITTEE, WHICH SHALL CONSIST OF THE 148
CHANCELLOR OF THE OHIO BOARD OF REGENTS OR THE CHANCELLOR'S 149
DESIGNEE, THE TREASURER OF STATE OR THE TREASURER OF STATE'S 150
DESIGNEE, THE DIRECTOR OF DEVELOPMENT OR THE DIRECTOR'S DESIGNEE, 151
ONE STATE SENATOR APPOINTED BY THE PRESIDENT OF THE SENATE, ONE 152
STATE REPRESENTATIVE APPOINTED BY THE SPEAKER OF THE HOUSE OF
REPRESENTATIVES, AND TWO PUBLIC MEMBERS APPOINTED BY THE 153
CHANCELLOR REPRESENTING THE INTERESTS OF THE STATE-ASSISTED 154
ELIGIBLE INSTITUTIONS AND PRIVATE NONPROFIT ELIGIBLE 155
INSTITUTIONS, RESPECTIVELY.
(B) THE COMMITTEE, WITHIN ONE HUNDRED TWENTY DAYS AFTER 157
5
THE EFFECTIVE DATE OF THIS SECTION, SHALL PROVIDE RECOMMENDATIONS 158
TO THE OHIO BOARD OF REGENTS AS TO SUCH RULES, CRITERIA, AND 159
GUIDELINES AS ARE NECESSARY AND APPROPRIATE TO IMPLEMENT THE 160
SCHOLARSHIP AND FELLOWSHIP PROGRAMS CREATED BY SECTIONS 3333.37 161
TO 3333.375 OF THE REVISED CODE. 162
(C) THE COMMITTEE SHALL MEET AT LEAST ANNUALLY TO REVIEW 164
THE SCHOLARSHIP AND FELLOWSHIP PROGRAMS GUIDELINES; MAKE 165
RECOMMENDATIONS TO AMEND, RESCIND, OR MODIFY THE POLICY 166
GUIDELINES; AND APPROVE SCHOLARSHIP AND FELLOWSHIP AWARDS TO 167
ELIGIBLE STUDENTS.
(D) SECTION 101.84 OF THE REVISED CODE DOES NOT APPLY TO 170
THIS SECTION.
Sec. 3333.374. (A) AFTER RECEIPT OF RECOMMENDATIONS FROM 172
THE RULES ADVISORY COMMITTEE OR IF NO RECOMMENDATIONS ARE 173
RECEIVED, THE OHIO BOARD OF REGENTS, NOT LATER THAN ONE HUNDRED 174
EIGHTY DAYS AFTER THE EFFECTIVE DATE OF THIS SECTION AND WITH THE 175
APPROVAL OF THE TREASURER OF STATE, SHALL ADOPT RULES, IN 176
ACCORDANCE WITH CHAPTER 119. OF THE REVISED CODE, ESTABLISHING 177
SUCH POLICY GUIDELINES AS THE BOARD CONSIDERS NECESSARY AND 178
APPROPRIATE TO PROVIDE FOR THE IMPLEMENTATION OF THE SCHOLARSHIP 179
AND FELLOWSHIP PROGRAMS.
(B) NOTHING IN THIS SECTION OR SECTION 3333.373 OF THE 182
REVISED CODE SHALL PREVENT THE BOARD, WITH THE APPROVAL OF THE 183
TREASURER OF STATE, FROM AMENDING OR RESCINDING RULES ADOPTED
PURSUANT TO DIVISION (A) OF THIS SECTION, OR FROM ADOPTING NEW 184
RULES, IN ACCORDANCE WITH CHAPTER 119. OF THE REVISED CODE, FROM 186
TIME TO TIME AS ARE NECESSARY TO FURTHER THE PURPOSES OF SECTIONS
3333.37 TO 3333.375 OF THE REVISED CODE. 187
Sec. 3333.375. (A)(1) THERE IS HEREBY CREATED THE OHIO 189
OUTSTANDING SCHOLARSHIP AND THE OHIO PRIORITY NEEDS FELLOWSHIP 190
PROGRAMS PAYMENT FUNDS, WHICH SHALL BE IN THE CUSTODY OF THE 191
TREASURER OF STATE, BUT SHALL NOT BE A PART OF THE STATE 192
TREASURY.
(2) THE PAYMENT FUNDS SHALL CONSIST SOLELY OF ALL MONEYS 194
6
RETURNED TO THE TREASURER OF STATE, AS ISSUER OF CERTAIN 195
TAX-EXEMPT STUDENT LOAN REVENUE BONDS, FROM ALL INDENTURES OF 196
TRUST, BOTH PRESENTLY EXISTING AND FUTURE, CREATED AS A RESULT OF 197
TAX-EXEMPT STUDENT LOAN REVENUE BONDS ISSUED UNDER CHAPTER 3366. 198
OF THE REVISED CODE, AND ANY MONEYS EARNED FROM ALLOWABLE 199
INVESTMENTS OF THE PAYMENT FUNDS UNDER DIVISION (B) OF THIS 200
SECTION.
(3) THE PAYMENT FUNDS SHALL BE USED SOLELY FOR SCHOLARSHIP 202
AND FELLOWSHIPS AWARDED UNDER SECTIONS 3333.37 TO 3333.375 OF THE 203
REVISED CODE BY THE OHIO BOARD OF REGENTS AND FOR ANY NECESSARY 204
ADMINISTRATIVE EXPENSES INCURRED BY THE BOARD IN ADMINISTERING 205
THE SCHOLARSHIP AND FELLOWSHIP PROGRAMS. 206
(B) THE TREASURER OF STATE MAY INVEST ANY MONEYS IN THE 208
PAYMENT FUNDS NOT CURRENTLY NEEDED FOR SCHOLARSHIP AND FELLOWSHIP 209
PAYMENTS IN ANY KIND OF INVESTMENTS IN WHICH MONEYS OF THE PUBLIC 210
EMPLOYEES RETIREMENT SYSTEM MAY BE INVESTED UNDER CHAPTER 145. OF 211
THE REVISED CODE.
(C)(1) THE INSTRUMENTS OF TITLE OF ALL INVESTMENTS SHALL 213
BE DELIVERED TO THE TREASURER OF STATE OR TO A QUALIFIED TRUSTEE 214
DESIGNATED BY THE TREASURER OF STATE AS PROVIDED IN SECTION 215
135.18 OF THE REVISED CODE. 216
(2) THE TREASURER OF STATE SHALL COLLECT BOTH PRINCIPAL 218
AND INVESTMENT EARNINGS ON ALL INVESTMENTS AS THEY BECOME DUE AND 219
PAY THEM INTO THE PAYMENT FUNDS. 220
(3) ALL DEPOSITS TO THE PAYMENT FUNDS SHALL BE MADE IN 222
PUBLIC DEPOSITORIES OF THIS STATE AND SECURED AS PROVIDED IN 223
SECTION 135.18 OF THE REVISED CODE. 224
(D) ON OR BEFORE MARCH 1, 2001, AND ON OR BEFORE THE FIRST 227
DAY OF MARCH IN EACH SUBSEQUENT YEAR, THE TREASURER OF STATE
SHALL PROVIDE TO THE CHANCELLOR OF THE OHIO BOARD OF REGENTS A 228
STATEMENT INDICATING THE MONEYS IN THE OHIO OUTSTANDING 229
SCHOLARSHIP AND THE OHIO PRIORITY NEEDS FELLOWSHIP PROGRAMS 230
PAYMENT FUNDS THAT ARE AVAILABLE FOR THE UPCOMING ACADEMIC YEAR 231
TO AWARD SCHOLARSHIPS AND FELLOWSHIPS UNDER SECTIONS 3333.37 TO 232
7
3333.375 OF THE REVISED CODE. 233
Sec. 3334.01. As used in this chapter: 242
(A) "Aggregate original principal amount" means the 244
aggregate of the initial offering prices to the public of college 245
savings bonds, exclusive of accrued interest, if any. "Aggregate 246
original principal amount" does not mean the aggregate accreted 247
amount payable at maturity or redemption of such bonds. 248
(B) "Beneficiary" means an: 250
(1) AN individual designated by the purchaser under a 252
tuition payment contract or through a scholarship program as the 254
individual on whose behalf tuition credits purchased under the 255
contract or awarded through the scholarship program will be
applied toward the payment of undergraduate, graduate, or 256
professional tuition; OR 257
(2) AN INDIVIDUAL DESIGNATED BY THE CONTRIBUTOR UNDER A 259
VARIABLE COLLEGE SAVINGS PROGRAM CONTRACT AS THE INDIVIDUAL WHOSE 260
TUITION AND OTHER HIGHER EDUCATION EXPENSES WILL BE PAID FROM A 261
VARIABLE COLLEGE SAVINGS PROGRAM ACCOUNT. 262
(C) "Capital appreciation bond" means a bond for which the 264
following is true:
(1) The principal amount is less than the amount payable 266
at maturity or early redemption; and 267
(2) No interest is payable on a current basis. 269
(D) "Tuition credit" means a credit of the Ohio tuition 271
trust authority purchased under section 3334.09 of the Revised 272
Code.
(E) "College savings bonds" means revenue and other 274
obligations issued on behalf of the state or any agency or 275
issuing authority thereof as a zero-coupon or capital 276
appreciation bond, and designated as college savings bonds as 277
provided in this chapter. "College savings bond issue" means any 278
issue of bonds of which any part has been designated as college 279
savings bonds. 280
(F) "Institution of higher education" means a state 282
8
institution of higher education, a private college, university, 284
or other postsecondary institution located in this state that
possesses a certificate of authorization issued by the Ohio board 285
of regents pursuant to Chapter 1713. of the Revised Code or a 286
certificate of registration issued by the state board of 287
proprietary school registration under Chapter 3332. of the 288
Revised Code, or an accredited college, university, or other 289
postsecondary institution located outside this state that is 290
accredited by an accrediting organization or professional 291
association recognized by the authority. To be considered an 292
institution of higher education, an institution shall meet the 293
definition of an eligible educational institution under section 294
529 of the Internal Revenue Code.
(G) "Issuing authority" means any authority, commission, 296
body, agency, or individual empowered by the Ohio Constitution or 298
the Revised Code to issue bonds or any other debt obligation of 299
the state or any agency or department thereof. "Issuer" means
the issuing authority or, if so designated under division (B) of 300
section 3334.04 of the Revised Code, the treasurer of state. 301
(H) "Tuition" means the charges imposed to attend an 303
institution of higher education as an undergraduate, graduate, or 304
professional student and all fees required as a condition of 305
enrollment, as determined by the Ohio tuition trust authority. 306
"Tuition" does not include fees charged to out-of-state residents 307
by state institutions of higher education, laboratory fees, room 308
and board, or other similar fees and charges. 309
(I) "Weighted average tuition" means the tuition cost 311
resulting from the following calculation: 312
(1) Add the products of the annual undergraduate tuition 314
CHARGED TO OHIO RESIDENTS at each four-year state university 316
multiplied by that institution's total number of undergraduate 317
fiscal year equated students; and 318
(2) Divide the gross total of the products from division 320
(J)(I)(1) of this section by the total number of undergraduate 321
9
fiscal year equated students attending four-year state 322
universities. 323
(J) "Zero-coupon bond" means a bond which has a stated 325
interest rate of zero per cent and on which no interest is 326
payable until the maturity or early redemption of the bond, and 327
is offered at a substantial discount from its original stated 328
principal amount. 329
(K) "State institution of higher education" includes the 331
state universities listed in section 3345.011 of the Revised 332
Code, community colleges created pursuant to Chapter 3354. of the 333
Revised Code, university branches created pursuant to Chapter 334
3355. of the Revised Code, technical colleges created pursuant to 335
Chapter 3357. of the Revised Code, state community colleges 336
created pursuant to Chapter 3358. of the Revised Code, the 337
medical college of Ohio at Toledo, and the northeastern Ohio 338
universities college of medicine.
(L) "Four-year state university" means those state 340
universities listed in section 3345.011 of the Revised Code. 341
(M) "Principal amount" refers to the initial offering 343
price to the public of an obligation, exclusive of the accrued 344
interest, if any. "Principal amount" does not refer to the 345
aggregate accreted amount payable at maturity or redemption of an 346
obligation. 347
(N) "Scholarship program" means a program registered with 349
the Ohio tuition trust authority pursuant to section 3334.18 350
3334.17 of the Revised Code. 351
(O) "Internal Revenue Code" means the "Internal Revenue 354
Code of 1986," 100 Stat. 2085, 26 U.S.C.A. 1 et seq., as amended. 355
(P) "Other higher education expenses" means room and board 358
and books, supplies, equipment, and nontuition-related fees 359
associated with the cost of attendance of a beneficiary at an 360
institution of higher education, but only to the extent that such 361
expenses meet the definition of "qualified higher education 362
expenses" under section 529 of the Internal Revenue Code. "Other 363
10
higher education expenses" does not include tuition as defined in 364
division (H) of this section. 365
(Q) "Purchaser" means the person signing the tuition 368
payment contract, who controls the account and acquires tuition 369
credits for an account under the terms and conditions of the 370
contract.
(R) "CONTRIBUTOR" MEANS A PERSON WHO SIGNS A VARIABLE 372
COLLEGE SAVINGS PROGRAM CONTRACT WITH THE OHIO TUITION TRUST 373
AUTHORITY AND CONTRIBUTES TO AND OWNS THE ACCOUNT CREATED UNDER 374
THE CONTRACT.
Sec. 3334.02. (A) In order to help make higher education 383
affordable and accessible to all citizens of Ohio, to maintain 384
state institutions of higher education by helping to provide a 385
stable financial base to these institutions, to provide the 386
citizens of Ohio with financing assistance for higher education 387
and protection against rising tuition costs, to encourage saving 388
to enhance the ability of citizens of Ohio to obtain financial 389
access to institutions of higher education, to encourage 390
elementary and secondary students in this state to achieve 391
academic excellence, and to promote a well-educated and 392
financially secure population to the ultimate benefit of all 393
citizens of the state of Ohio, there is hereby created the Ohio 394
college savings program. The program shall consist of the 395
issuance of college savings bonds and the sale of tuition credits 396
and, if offered, supplemental credits. 397
(B) The provisions of Chapter 1707. of the Revised Code 399
shall not apply to tuition credits or any agreement or 401
transaction related thereto.
(C) TO PROVIDE THE CITIZENS OF OHIO WITH A CHOICE OF 403
TAX-ADVANTAGED COLLEGE SAVINGS PROGRAMS AND THE OPPORTUNITY TO 404
PARTICIPATE IN MORE THAN ONE TYPE OF COLLEGE SAVINGS PROGRAM AT A 406
TIME, THE OHIO TUITION TRUST AUTHORITY SHALL ESTABLISH AND 407
ADMINISTER A VARIABLE COLLEGE SAVINGS PROGRAM AS A QUALIFIED 408
STATE TUITION PROGRAM UNDER SECTION 529 OF THE INTERNAL REVENUE 409
11
CODE. THE PROGRAM SHALL ALLOW CONTRIBUTORS TO MAKE CASH 410
CONTRIBUTIONS TO VARIABLE COLLEGE SAVINGS PROGRAM ACCOUNTS 411
CREATED FOR THE PURPOSE OF PAYING FUTURE TUITION AND OTHER HIGHER 412
EDUCATION EXPENSES AND PROVIDING VARIABLE RATES OF RETURN ON 413
CONTRIBUTIONS.
(D) A PERSON MAY PARTICIPATE SIMULTANEOUSLY IN BOTH THE 416
OHIO COLLEGE SAVINGS PROGRAM AND THE VARIABLE COLLEGE SAVINGS 417
PROGRAM.
Sec. 3334.08. (A) In SUBJECT TO DIVISION (B) OF THIS 426
SECTION, IN addition to any other powers conferred by this 428
chapter, the Ohio tuition trust authority may do any of the 429
following:
(1) Impose reasonable residency requirements for 431
beneficiaries of tuition credits; 432
(2) Impose reasonable limits on the number of tuition 434
credit participants; 435
(3) Impose and collect administrative fees and charges in 437
connection with any transaction under this chapter; 438
(4) Purchase insurance from insurers licensed to do 440
business in this state providing for coverage against any loss in 441
connection with the authority's property, assets, or activities 442
or to further ensure the value of tuition credits; 443
(5) Indemnify or purchase policies of insurance on behalf 445
of members, officers, and employees of the authority from 446
insurers licensed to do business in this state providing for 447
coverage for any liability incurred in connection with any civil 448
action, demand, or claim against a director, officer, or employee 449
by reason of an act or omission by the director, officer, or 450
employee that was not manifestly outside the scope of the 451
employment or official duties of the director, officer, or 452
employee or with malicious purpose, in bad faith, or in a wanton 454
or reckless manner;
(6) Make, execute, and deliver contracts, conveyances, and 456
other instruments necessary to the exercise and discharge of the 457
12
powers and duties of the authority; 458
(7) Promote, advertise, and publicize the OHIO college 460
savings program AND THE VARIABLE COLLEGE SAVINGS PROGRAM; 462
(8) Adopt rules under section 111.15 of the Revised Code 464
for the implementation of the OHIO college savings program AND 466
THE VARIABLE COLLEGE SAVINGS PROGRAM; 467
(9) Contract, for the provision of all or part of the 469
services necessary for the management and operation of the OHIO 471
college savings program AND THE VARIABLE COLLEGE SAVINGS PROGRAM, 472
with a bank, trust company, savings and loan association, 474
insurance company, or licensed dealer in securities if the bank, 475
company, association, or dealer is authorized to do business in 476
this state and information about the contract is filed with the 477
controlling board pursuant to division (D)(6) of section 127.16 478
of the Revised Code;
(10) Contract for other services, or for goods, needed by 480
the authority in the conduct of its business, including but not 481
limited to credit card services; 482
(11) Employ an executive director and other personnel as 484
necessary to carry out its responsibilities under this chapter, 485
and fix the compensation of these persons. All employees of the 486
authority shall be in the unclassified civil service and shall be 487
eligible for membership in the public employees retirement 488
system. 489
(12) Contract with financial consultants, actuaries, 491
auditors, and other consultants as necessary to carry out its 492
responsibilities under this chapter; 493
(13) Enter into agreements with any agency of the state or 495
its political subdivisions or with private employers under which 496
an employee may agree to have a designated amount deducted in 497
each payroll period from the wages or salary due the employee for 498
the purpose of purchasing tuition credits pursuant to a tuition 499
payment contract OR MAKING CONTRIBUTIONS PURSUANT TO A VARIABLE 500
COLLEGE SAVINGS PROGRAM CONTRACT; 501
13
(14) Enter into an agreement with the treasurer of state 503
under which the treasurer of state will receive, and credit to 504
the Ohio tuition trust fund OR VARIABLE COLLEGE SAVINGS PROGRAM 505
FUND, from any bank or savings and loan association authorized to 507
do business in this state, amounts that a depositor of the bank 508
or association authorizes the bank or association to withdraw 509
periodically from the depositor's account for the purpose of 511
purchasing tuition credits pursuant to a tuition payment contract 512
OR MAKING CONTRIBUTIONS PURSUANT TO A VARIABLE COLLEGE SAVINGS 513
PROGRAM CONTRACT;
(15) Solicit and accept gifts, grants, and loans from any 515
person or governmental agency and participate in any governmental 516
program; 517
(16) Impose limits on the number of credits which may be 520
purchased on behalf of or assigned or awarded to any beneficiary 521
AND ON THE TOTAL AMOUNT OF CONTRIBUTIONS THAT MAY BE MADE ON 522
BEHALF OF A BENEFICIARY;
(17) Impose restrictions on the substitution of another 524
individual for the original beneficiary UNDER THE OHIO COLLEGE 525
SAVINGS PROGRAM; 526
(18) Impose a limit on the age of a beneficiary, above 528
which tuition credits may not be purchased on behalf of that 530
beneficiary; 531
(19) Enter into a cooperative agreement with the treasurer 533
of state to provide for the direct disbursement of payments under 534
tuition payment OR VARIABLE COLLEGE SAVINGS PROGRAM contracts; 535
(20) Determine the other higher education expenses for 537
which tuition credits OR CONTRIBUTIONS may be used; 538
(21) Terminate any prepaid tuition PAYMENT OR VARIABLE 540
COLLEGE SAVINGS PROGRAM contract if no purchases OR CONTRIBUTIONS 542
are made for a period of three years or more and there are fewer 544
than a total of five tuition units or tuition credits OR LESS
THAN A DOLLAR AMOUNT SET BY RULE on account, provided that notice 546
of a possible termination shall be provided in advance, 547
14
explaining any options to prevent termination, and a reasonable 548
amount of time shall be provided within which to act to prevent a 549
termination;
(22) MAINTAIN A SEPARATE ACCOUNT FOR EACH TUITION PAYMENT 551
OR VARIABLE COLLEGE SAVINGS PROGRAM CONTRACT; 552
(23) Perform all acts necessary and proper to carry out 554
the duties and responsibilities of the authority pursuant to this 555
chapter. 556
(B) THE AUTHORITY SHALL ADOPT RULES UNDER SECTION 111.15 559
OF THE REVISED CODE FOR THE IMPLEMENTATION AND ADMINISTRATION OF 561
THE VARIABLE COLLEGE SAVINGS PROGRAM. THE RULES SHALL PROVIDE 562
TAXPAYERS WITH THE MAXIMUM TAX ADVANTAGES AND FLEXIBILITY
CONSISTENT WITH SECTION 529 OF THE INTERNAL REVENUE CODE AND 564
REGULATIONS ADOPTED THEREUNDER WITH REGARD TO DISPOSITION OF 566
CONTRIBUTIONS AND EARNINGS, DESIGNATION OF BENEFICIARIES, AND 567
ROLLOVER OF ACCOUNT ASSETS TO OTHER PROGRAMS. 568
(C) Except as otherwise specified in this chapter, the 570
provisions of Chapters 123., 125., and 4117. of the Revised Code 571
shall not apply to the authority. The department of 572
administrative services shall, upon the request of the authority, 573
act as the authority's agent for the purchase of equipment, 574
supplies, insurance, or services, or the performance of 575
administrative services pursuant to Chapter 125. of the Revised 576
Code. 577
Sec. 3334.10. Divisions (A) and, (B), (C), AND (D) of this 587
section do not apply to scholarship programs established under 588
section 3334.17 of the Revised Code.
(A) Unless otherwise provided for in the contract, a 591
tuition payment contract may be terminated by the purchaser under 592
any of the following circumstances upon the written request of 593
the purchaser to the authority: 594
(1) Upon the death or permanent disability of the 596
beneficiary;
(2) Upon notification to the Ohio tuition trust authority 598
15
in writing that the beneficiary is age eighteen or older, has 599
decided not to attend an institution of higher education, and 600
requests that the tuition payment contract be terminated; 601
(3) Upon the beneficiary's completion of the degree 603
requirements at an institution of higher education; 604
(4) Upon the rollover of all contributions to AMOUNTS IN a 607
tuition credit account to the prepaid tuition plan of AN 609
EQUIVALENT ACCOUNT IN another state; 610
(5) Upon the occurrence of other circumstances determined 612
by the authority to be grounds for termination. 613
(B) The authority shall determine the method and schedule 615
for payment of refunds upon termination of a tuition payment 616
contract. 617
(1) In cases described by division (A)(2) or (3) of this 619
section, the amount of the refund shall be equal to ninety-nine 620
one-hundredths of NOT LESS THAN one per cent of the weighted 621
average tuition in the academic year the contract REFUND is 623
terminated PAID, multiplied by the number of tuition credits 625
purchased and not used, minus any reasonable charges and fees
provided for by the authority, or such other lesser sum as shall 626
be determined by the authority but only to the extent that such a 627
lesser sum is necessary to meet the refund penalty requirements 628
for qualified state tuition programs under section 529 of the 629
Internal Revenue Code. 630
(2) In cases described by division (A)(1) of this section, 632
the amount of the refund shall be equal to the greater of the 633
following:
(a) One per cent of the weighted average tuition in the 635
academic year the contract REFUND is terminated PAID, multiplied 636
by the number of tuition credits purchased and not used; 638
(b) The total purchase price of all tuition credits 640
purchased for the beneficiary and not used. 641
(3) In cases described by division (A)(5) of this section, 643
the amount of the refund shall be either of the following as 644
16
determined by the authority: 645
(a) The refund provided by division (B)(1) of this 647
section;
(b) The refund provided by division (B)(2) of this 649
section, or such other lesser sum as shall be determined by the 651
authority but only to the extent that such a lesser sum is 652
necessary to meet the refund penalty requirements for qualified 653
state tuition programs under section 529 of the Internal Revenue 654
Code.
(C) UNLESS OTHERWISE PROVIDED FOR IN THE CONTRACT, A 657
VARIABLE COLLEGE SAVINGS PROGRAM ACCOUNT MAY BE TERMINATED BY THE 658
CONTRIBUTOR FOR ANY REASON UPON THE WRITTEN REQUEST OF THE 659
CONTRIBUTOR TO THE AUTHORITY. TERMINATION OF A VARIABLE COLLEGE 660
SAVINGS PROGRAM ACCOUNT SHALL OCCUR NO EARLIER THAN A MATURITY 661
PERIOD SET BY THE AUTHORITY AFTER THE FIRST CONTRIBUTION IS MADE 662
TO THE ACCOUNT.
(D) THE AUTHORITY SHALL DETERMINE THE METHOD AND SCHEDULE 664
FOR PAYMENT OF REFUNDS UPON TERMINATION OF A VARIABLE SAVINGS 665
PROGRAM ACCOUNT. 666
(1) THE CONTRIBUTOR UNDER A VARIABLE SAVINGS PROGRAM 668
CONTRACT MAY RECEIVE A REFUND OF THE BALANCE IN AN ACCOUNT, LESS 669
ANY ADMINISTRATIVE FEES, IF THE ACCOUNT IS TERMINATED UPON THE 670
DEATH OR PERMANENT DISABILITY OF THE BENEFICIARY OR, TO THE 671
EXTENT ALLOWED UNDER RULES OF THE AUTHORITY, UPON THE ROLLOVER OF 672
ALL AMOUNTS IN A VARIABLE COLLEGE SAVINGS PROGRAM ACCOUNT TO AN 673
EQUIVALENT ACCOUNT IN ANOTHER STATE. 674
(2) IF A VARIABLE COLLEGE SAVINGS PROGRAM ACCOUNT IS 676
TERMINATED FOR ANY REASON OTHER THAN THOSE SET FORTH IN DIVISION 677
(D)(1) OF THIS SECTION, THE CONTRIBUTOR MAY RECEIVE A REFUND OF 678
THE BALANCE IN THE ACCOUNT, LESS ANY ADMINISTRATIVE FEES, AND 679
LESS ANY ADDITIONAL AMOUNT NECESSARY TO MEET THE MINIMUM REFUND 680
PENALTY REQUIREMENTS FOR A QUALIFIED STATE TUITION PROGRAM UNDER 681
SECTION 529 OF THE INTERNAL REVENUE CODE. 682
(3) EARNINGS SHALL BE CALCULATED AS THE TOTAL VALUE OF THE 684
17
VARIABLE SAVINGS PROGRAM ACCOUNT LESS THE AGGREGATE 686
CONTRIBUTIONS, OR IN SUCH OTHER MANNER AS PRESCRIBED BY SECTION 687
529 OF THE INTERNAL REVENUE CODE. 688
(E) In the case of a scholarship program, a refund of 690
tuition credits in the program's account may be made only for 692
just cause with the approval of the authority. The refund shall 693
be paid to the entity that established the scholarship program 694
or, with that entity's approval, to the authority if this is 695
authorized by federal tax law. The amount of any refund shall be 696
determined by the authority and shall meet the requirements for 697
refunds made on account of scholarships under section 529 of the 698
Internal Revenue Code. 699
(D)(F) If a beneficiary is awarded a scholarship other 701
than under a scholarship program, a waiver of tuition, or similar 702
subvention that the authority determines cannot be converted into 705
money by the beneficiary, the authority shall, during each 706
academic term that the beneficiary furnishes the authority such 707
information about the scholarship, waiver, or similar subvention 708
as the authority requires, refund to the person designated in the 709
contract, or, in the case of a beneficiary under a scholarship 710
program, to the beneficiary an amount equal to the value that the 711
tuition credits OR THE AMOUNTS IN THE VARIABLE COLLEGE SAVINGS 712
PROGRAM ACCOUNT that are not needed on account of the 714
scholarship, waiver, or similar subvention would otherwise have 715
to the beneficiary that term at the institution of higher
education where the beneficiary is enrolled. The authority may, 716
at its sole option, designate the institution of higher education 717
at which the beneficiary is enrolled as the agent of the 718
authority for purposes of refunds pursuant to this division. 719
(E)(G) If, in any academic term for which tuition credits 721
OR ANY AMOUNTS IN A VARIABLE COLLEGE SAVINGS PROGRAM ACCOUNT have 723
been used to pay all or part of a beneficiary's tuition, the
beneficiary withdraws from the institution of higher education at 724
which the beneficiary is enrolled prior to the end of the 725
18
academic term, a pro rata share of any refund of tuition as a 726
result of the withdrawal equal to that portion of the tuition 727
paid with tuition credits OR THE AMOUNTS IN A VARIABLE COLLEGE 728
SAVINGS PROGRAM ACCOUNT shall be made to the authority, unless 729
the authority designates a different procedure. The authority 730
shall credit any refund received, less any reasonable charges and 731
fees provided for by the authority, to the appropriate account 732
established under division (F)(1) or (2) of section 3334.11 of 734
the Revised Code OR DIVISION (H) OF THIS SECTION.
(H) THE AUTHORITY SHALL MAINTAIN A SEPARATE ACCOUNT FOR 736
EACH VARIABLE COLLEGE SAVINGS CONTRACT ENTERED INTO PURSUANT TO 737
DIVISION (A) OF SECTION 3334.18 OF THE REVISED CODE FOR 738
CONTRIBUTIONS MADE ON BEHALF OF A BENEFICIARY, SHOWING THE NAME 741
OF THE BENEFICIARY OF THAT CONTRACT AND THE AMOUNT OF 742
CONTRIBUTIONS MADE PURSUANT TO THAT CONTRACT. UPON REQUEST OF 743
ANY BENEFICIARY OR CONTRIBUTOR, THE AUTHORITY SHALL PROVIDE A 744
STATEMENT INDICATING, IN THE CASE OF A BENEFICIARY, THE AMOUNT OF 745
CONTRIBUTIONS MADE PURSUANT TO THAT CONTRACT ON BEHALF OF THE 746
BENEFICIARY, OR, IN THE CASE OF A CONTRIBUTOR, CONTRIBUTIONS 747
MADE, DISBURSED, OR REFUNDED PURSUANT TO THAT CONTRACT. 748
Sec. 3334.11. (A) The assets of the Ohio tuition trust 757
authority reserved for payment of the obligations of the 758
authority pursuant to tuition payment contracts shall be placed 759
in a fund, which is hereby created and shall be known as the Ohio 761
tuition trust fund. The fund shall be in the custody of the 762
treasurer of state, but shall not be part of the state treasury. 763
That portion of payments received by the authority or the 764
treasurer of state from persons purchasing tuition credits under 765
tuition payment contracts that the authority determines is 766
actuarially necessary for the payment of obligations of the 767
authority pursuant to tuition payment contracts, all interest and 768
investment income earned by the fund, and all other receipts of 769
the authority from any other source that the authority determines 771
appropriate, shall be deposited in the fund. No purchaser or 772
19
beneficiary of tuition credits shall have any claim against the 773
funds of any state institution of higher education. All 774
investment fees and other costs incurred in connection with the 775
exercise of the investment powers of the authority pursuant to 776
divisions (D) and (E) of this section shall be paid from the
assets of the fund. 777
(B) Unless otherwise provided by the authority, the assets 779
of the Ohio tuition trust fund shall be expended in the following 780
order: 781
(1) To make payments to beneficiaries, or institutions of 783
higher education on behalf of beneficiaries, under division (B) 784
of section 3334.09 of the Revised Code; 785
(2) To make refunds as provided in divisions (B), (C)(E), 787
and (D)(F) of section 3334.10 of the Revised Code; 788
(3) To pay the investment fees and other costs of 790
administering the fund. 791
(C)(1) Except as may be provided in an agreement under 793
division (A)(19) of section 3334.08 of the Revised Code, all 795
disbursements from the Ohio tuition trust fund shall be made by
the treasurer of state on order of a designee of the authority. 796
(2) The treasurer of state shall deposit any portion of 798
the Ohio tuition trust fund not needed for immediate use in the 799
same manner as state funds are deposited. 800
(D) The authority is the trustee of the Ohio tuition trust 802
fund. The authority shall have full power to invest the assets 804
of the fund and in exercising this power shall be subject to the
limitations and requirements contained in divisions (K) to (M) of 806
this section and sections 145.112 and 145.113 of the Revised 807
Code. The evidences of title of all investments shall be 808
delivered to the treasurer of state or to a qualified trustee 810
designated by the treasurer of state as provided in section 812
135.18 of the Revised Code. Assets of the fund shall be 813
administered by the authority in a manner designed to be 814
actuarially sound so that the assets of the fund will be
20
sufficient to satisfy the obligations of the authority pursuant 815
to tuition payment contracts and defray the reasonable expenses 816
of administering the fund. 817
(E) The public employees retirement board shall, with the 819
approval of the authority, exercise the investment powers of the 820
authority as set forth in division (D) of this section until the 821
authority determines that assumption and exercise by the 822
authority of the investment powers is financially and 823
administratively feasible. The investment powers shall be 824
exercised by the public employees retirement board in a manner 825
agreed upon by the authority that maximizes the return on 826
investment and minimizes the administrative expenses. 827
(F)(1) The authority shall maintain a separate account for 829
each tuition payment contract entered into pursuant to division 831
(A) of section 3334.09 of the Revised Code for the purchase of 832
tuition credits on behalf of a beneficiary or beneficiaries 833
showing the beneficiary or beneficiaries of that contract and the 834
number of tuition credits purchased pursuant to that contract. 835
Upon request of any beneficiary or person who has entered into a 836
tuition payment contract, the authority shall provide a statement 837
indicating, in the case of a beneficiary, the number of tuition 838
credits purchased on behalf of the beneficiary, or in the case of 839
a person who has entered into a tuition payment contract, the 840
number of tuition credits purchased, used, or refunded pursuant 841
to that contract. A beneficiary and person that have entered 842
into a tuition payment contract each may file only one request 843
under this division in any year. 844
(2) The authority shall maintain an account for each 846
scholarship program showing the number of tuition credits that 847
have been purchased for or donated to the program and the number 848
of tuition credits that have been used. Upon the request of the 849
entity that established the scholarship program, the authority 850
shall provide a statement indicating these numbers. 851
(G) In addition to the Ohio tuition trust fund, there is 853
21
hereby established a reserve fund that shall be in the custody of 856
the treasurer of state but shall not be part of the state
treasury, and shall be known as the Ohio tuition trust reserve 857
fund, and an operating fund that shall be part of the state 859
treasury, and shall be known as the Ohio tuition trust operating 860
fund. That portion of payments received by the authority or the 861
treasurer of state from persons purchasing tuition credits under 862
tuition payment contracts that the authority determines is not 864
actuarially necessary for the payment of obligations of the 865
authority pursuant to tuition payment contracts, any interest and 866
investment income earned by the reserve fund, any administrative 867
charges and fees imposed by the authority on transactions under 868
this chapter or on purchasers or beneficiaries of tuition 869
credits, and all other receipts from any other source that the 871
authority determines appropriate, shall be deposited in the 872
reserve fund to pay the operating expenses of the authority and 873
the costs of administering the program. The assets of the 874
reserve fund may be invested in the same manner and subject to 875
the same limitations set forth in divisions (D), (E), and (K) to 877
(M) of this section and sections 145.112 and 145.113 of the 878
Revised Code. All investment fees and other costs incurred in 880
connection with the exercise of the investment powers shall be 882
paid from the assets of the reserve fund. Except as otherwise 883
provided for in this chapter, all operating expenses of the 884
authority and costs of administering the program shall be paid 885
from the operating fund. The treasurer shall, upon request of 886
the authority, transfer funds from the reserve fund to the 887
operating fund as the authority determines appropriate to pay 888
those current operating expenses of the authority and costs of 889
administering the program as the authority designates. Any 890
interest or investment income earned on the assets of the 891
operating fund shall be deposited in the operating fund. 892
(H) In January of each year the authority shall report to 894
each person who received any payments or refunds from the 895
22
authority during the preceding year information relative to the 896
value of the payments or refunds to assist in determining that 898
person's tax liability. 899
(I) The authority shall report to the tax commissioner any 902
information, and at the times, as the tax commissioner requires 904
to determine any tax liability that a person may have incurred 905
during the preceding year as a result of having received any 906
payments or refunds from the authority.
(J) All records of the authority indicating the identity 908
of purchasers and beneficiaries of tuition credits or college 909
savings bonds, the number of tuition credits purchased, used, or 910
refunded under a tuition payment contract, and the number of 911
college savings bonds purchased, held, or redeemed are not public 912
records within the meaning of section 149.43 of the Revised Code. 913
(K) The authority and other fiduciaries shall discharge 916
their duties with respect to the funds with care, skill, 917
prudence, and diligence under the circumstances then prevailing 918
that a prudent person acting in a like capacity and familiar with 919
such matters would use in the conduct of an enterprise of a like 920
character and with like aims; and by diversifying the investments 921
of the assets of the funds so as to minimize the risk of large 922
losses, unless under the circumstances it is clearly prudent not 924
to do so.
To facilitate investment of the funds, the authority may 926
establish a partnership, trust, limited liability company, 927
corporation, including a corporation exempt from taxation under 928
the Internal Revenue Code, 100 Stat. 2085, 26 U.S.C. 1, as 929
amended, or any other legal entity authorized to transact 930
business in this state.
(L) In exercising its fiduciary responsibility with 932
respect to the investment of the assets of the funds, it shall be 933
the intent of the authority to give consideration to investments 934
that enhance the general welfare of the state and its citizens 935
where the investments offer quality, return, and safety 936
23
comparable to other investments currently available to the 937
authority. In fulfilling this intent, equal consideration shall 938
also be given to investments otherwise qualifying under this 939
section that involve minority owned and controlled firms and 940
firms owned and controlled by women, either alone or in joint 941
venture with other firms.
The authority shall adopt, in regular meeting, policies, 944
objectives, or criteria for the operation of the investment 945
program that include asset allocation targets and ranges, risk 947
factors, asset class benchmarks, time horizons, total return 948
objectives, and performance evaluation guidelines. In adopting 950
policies and criteria for the selection of agents with whom the 951
authority may contract for the administration of the assets of
the funds, the authority shall give equal consideration to 952
minority owned and controlled firms, firms owned and controlled 953
by women, and ventures involving minority owned and controlled 954
firms and firms owned and controlled by women that otherwise meet 955
the policies and criteria established by the authority. 956
Amendments and additions to the policies and criteria shall be 957
adopted in regular meeting. The authority shall publish its
policies, objectives, and criteria under this provision no less 958
often than annually and shall make copies available to interested 960
parties.
When reporting on the performance of investments, the 962
authority shall comply with the performance presentation 964
standards established by the association for investment 965
management and research.
(M) All investments shall be purchased at current market 967
prices and the evidences of title of the investments shall be 968
placed in the hands of the treasurer of state, who is hereby 969
designated as custodian thereof, or in the hands of the treasurer 971
of state's authorized agent. The treasurer of state or the agent 972
shall collect the principal, dividends, distributions, and
interest thereon as they become due and payable and place them 973
24
when so collected into the custodial funds. 974
The treasurer of state shall pay for investments purchased 976
by the authority on receipt of written or electronic instructions 977
from the authority or the authority's designated agent 978
authorizing the purchase and pending receipt of the evidence of 980
title of the investment by the treasurer of state or the
treasurer of state's authorized agent. The authority may sell 981
investments held by the authority, and the treasurer of state or 982
the treasurer of state's authorized agent shall accept payment 983
from the purchaser and deliver evidence of title of the 984
investment to the purchaser on receipt of written or electronic 985
instructions from the authority or the authority's designated 986
agent authorizing the sale, and pending receipt of the moneys for
the investments. The amount received shall be placed in the 987
custodial funds. The authority and the treasurer of state may 988
enter into agreements to establish procedures for the purchase 989
and sale of investments under this division and the custody of 990
the investments.
No purchase or sale of any investment shall be made under 992
this section except as authorized by the authority. 993
Any statement of financial position distributed by the 995
authority shall include fair value, as of the statement date, of 996
all investments held by the authority under this section. 997
Sec. 3334.12. Notwithstanding anything to the contrary in 1,006
sections 3334.07 and 3334.09 of the Revised Code: 1,007
(A) Annually, the Ohio tuition trust authority shall have 1,009
the actuarial soundness of the Ohio tuition trust fund evaluated 1,010
by a nationally recognized actuary and shall determine whether 1,011
additional assets are necessary to defray the obligations of the 1,012
authority. If, after the authority sets the price for tuition 1,013
credits, circumstances arise that the executive director 1,015
determines necessitate an additional evaluation of the actuarial 1,016
soundness of the fund, the executive director shall have a 1,018
nationally recognized actuary conduct the necessary evaluation. 1,019
25
If the assets of the fund are insufficient to ensure the 1,020
actuarial soundness of the fund, the authority shall adjust the 1,021
price of subsequent purchases of tuition credits.
(B) Upon termination of the program or liquidation of the 1,023
Ohio tuition trust fund, the Ohio tuition trust reserve fund, and 1,024
the Ohio tuition trust operating fund, any remaining assets of 1,025
the funds after all obligations of the funds have been satisfied 1,026
pursuant to division (B) of section 3334.11 of the Revised Code 1,027
shall be transferred to the general revenue fund of the state. 1,028
(C) The authority shall prepare and cause to have audited 1,030
an annual financial report on all financial activity of the Ohio 1,031
tuition trust authority within ninety days of the end of the 1,032
fiscal year. The authority shall transmit a copy of the audited 1,033
financial report to the governor, the president of the senate, 1,034
the speaker of the house of representatives, and the minority 1,035
leaders of the senate and the house of representatives. Copies 1,036
of the audited financial report also shall be made available, 1,037
upon request, to the persons entering into contracts with the 1,038
authority and to prospective purchasers of tuition credits AND 1,039
PROSPECTIVE CONTRIBUTORS TO VARIABLE COLLEGE SAVINGS PROGRAM 1,040
ACCOUNTS.
Sec. 3334.15. (A) The right of a person to a tuition 1,049
credit or a payment under section 3334.09 of the Revised Code 1,051
pursuant to a tuition credit contract or, A scholarship program, 1,052
OR A VARIABLE COLLEGE SAVINGS PROGRAM ACCOUNT shall not be 1,054
subject to execution, garnishment, attachment, the operation of 1,056
bankruptcy or the insolvency laws, or other process of law. 1,057
(B) THE RIGHT OF A PERSON TO A TUITION CREDIT OR A PAYMENT 1,059
UNDER SECTION 3334.09 OF THE REVISED CODE PURSUANT TO A TUITION 1,060
CREDIT CONTRACT, A SCHOLARSHIP PROGRAM, OR A VARIABLE COLLEGE 1,061
SAVINGS PROGRAM ACCOUNT SHALL NOT BE USED AS SECURITY OR 1,062
COLLATERAL FOR A LOAN.
Sec. 3334.18. (A) A VARIABLE COLLEGE SAVINGS PROGRAM 1,064
ESTABLISHED BY THE OHIO TUITION TRUST AUTHORITY SHALL INCLUDE 1,065
26
PROVISIONS FOR A CONTRACT TO BE ENTERED INTO BETWEEN A 1,066
CONTRIBUTOR AND THE AUTHORITY THAT WILL AUTHORIZE THE CONTRIBUTOR 1,067
TO OPEN AN ACCOUNT FOR A BENEFICIARY AND AUTHORIZE THE 1,069
CONTRIBUTOR TO SUBSTITUTE A NEW BENEFICIARY FOR ONE ORIGINALLY
NAMED IN THE CONTRACT, TO THE EXTENT PERMITTED BY SECTION 529 OF 1,071
THE INTERNAL REVENUE CODE.
(B) THE AUTHORITY SHALL PROVIDE ADEQUATE SAFEGUARDS TO 1,073
PREVENT TOTAL CONTRIBUTIONS TO A VARIABLE COLLEGE SAVINGS PROGRAM 1,074
ACCOUNT OR PURCHASES OF TUITION CREDITS, EITHER SEPARATELY OR 1,075
COMBINED, THAT ARE MADE ON BEHALF OF A BENEFICIARY FROM EXCEEDING 1,076
THE AMOUNT NECESSARY TO PROVIDE FOR THE TUITION AND OTHER HIGHER 1,077
EDUCATION EXPENSES OF THE BENEFICIARY, CONSISTENT WITH THE 1,078
MAXIMUM CONTRIBUTIONS PERMITTED BY SECTION 529 OF THE INTERNAL 1,080
REVENUE CODE. HOWEVER, IN NO EVENT SHALL CONTRIBUTIONS OR 1,081
PURCHASES EXCEED THE ALLOWABLE LIMIT FOR A QUALIFIED STATE 1,082
TUITION PROGRAM UNDER SECTION 529 OF THE INTERNAL REVENUE CODE. 1,083
(C)(1) PARTICIPATION IN THE VARIABLE COLLEGE SAVINGS 1,085
PROGRAM DOES NOT GUARANTEE THAT CONTRIBUTIONS AND THE INVESTMENT 1,086
RETURN ON CONTRIBUTIONS, IF ANY, WILL BE ADEQUATE TO COVER FUTURE 1,088
TUITION AND OTHER HIGHER EDUCATION EXPENSES OR THAT A BENEFICIARY 1,089
WILL BE ADMITTED TO OR PERMITTED TO CONTINUE TO ATTEND AN 1,090
INSTITUTION OF HIGHER EDUCATION.
(2) RETURNS ON CONTRIBUTORS' INVESTMENTS IN THE VARIABLE 1,092
COLLEGE SAVINGS PROGRAM ARE NOT GUARANTEED BY THE STATE AND THE 1,093
CONTRIBUTORS TO THE VARIABLE COLLEGE SAVINGS PROGRAM ASSUME ALL 1,094
INVESTMENT RISK, INCLUDING THE POTENTIAL LOSS OF PRINCIPAL AND 1,095
LIABILITY FOR PENALTIES SUCH AS THOSE LEVIED FOR NONEDUCATIONAL 1,096
WITHDRAWALS.
(3) THE STATE SHALL HAVE NO DEBT OR OBLIGATION TO ANY 1,099
CONTRIBUTOR, BENEFICIARY, OR ANY OTHER PERSON AS A RESULT OF THE 1,100
ESTABLISHMENT OF THE PROGRAM, AND THE STATE ASSUMES NO RISK OR 1,101
LIABILITY FOR FUNDS INVESTED IN THE VARIABLE COLLEGE SAVINGS 1,102
PROGRAM.
(4) INFORMATIONAL MATERIALS ABOUT THE VARIABLE COLLEGE 1,104
27
SAVINGS PROGRAM PREPARED BY THE AUTHORITY OR ITS AGENTS AND 1,105
PROVIDED TO PROSPECTIVE CONTRIBUTORS SHALL STATE CLEARLY THE 1,106
INFORMATION SET FORTH IN DIVISION (C) OF THIS SECTION. 1,107
Sec. 3334.19. (A) THE OHIO TUITION TRUST AUTHORITY SHALL 1,110
ADOPT AN INVESTMENT PLAN THAT SETS FORTH INVESTMENT POLICIES AND 1,111
GUIDELINES TO BE UTILIZED IN ADMINISTERING THE PROGRAM. EXCEPT 1,112
AS PROVIDED IN SECTION 3334.20 OF THE REVISED CODE, THE AUTHORITY 1,113
SHALL CONTRACT WITH ONE OR MORE INSURANCE COMPANIES, BANKS, OR 1,114
OTHER FINANCIAL INSTITUTIONS TO ACT AS ITS INVESTMENT AGENTS AND 1,115
TO PROVIDE SUCH SERVICES AS THE AUTHORITY CONSIDERS APPROPRIATE 1,116
TO THE INVESTMENT PLAN, INCLUDING: 1,117
(1) PURCHASE, CONTROL, AND SAFEKEEPING OF ASSETS; 1,119
(2) RECORD KEEPING AND ACCOUNTING FOR INDIVIDUAL ACCOUNTS 1,121
AND FOR THE PROGRAM AS A WHOLE; 1,122
(3) PROVISION OF CONSOLIDATED STATEMENTS OF ACCOUNT. 1,125
(B) THE AUTHORITY OR ITS INVESTMENT AGENTS SHALL MAINTAIN 1,127
A SEPARATE ACCOUNT FOR THE BENEFICIARY OF EACH CONTRACT ENTERED 1,128
INTO UNDER THE VARIABLE COLLEGE SAVINGS PROGRAM. IF A 1,129
BENEFICIARY HAS MORE THAN ONE SUCH ACCOUNT, THE AUTHORITY OR ITS 1,130
AGENTS SHALL TRACK TOTAL CONTRIBUTIONS AND EARNINGS AND PROVIDE A 1,131
CONSOLIDATED SYSTEM OF ACCOUNT DISTRIBUTIONS TO INSTITUTIONS OF 1,132
HIGHER EDUCATION.
(C) THE AUTHORITY OR ITS AGENTS MAY PLACE ASSETS OF THE 1,134
PROGRAM IN SAVINGS ACCOUNTS AND MAY PURCHASE FIXED OR VARIABLE 1,135
LIFE INSURANCE OR ANNUITY CONTRACTS, SECURITIES, EVIDENCE OF 1,137
INDEBTEDNESS, OR OTHER INVESTMENT PRODUCTS PURSUANT TO THE 1,138
INVESTMENT PLAN.
(D) CONTRIBUTORS SHALL NOT DIRECT THE INVESTMENT OF THEIR 1,140
CONTRIBUTIONS UNDER THE INVESTMENT PLAN. THE AUTHORITY SHALL 1,141
IMPOSE OTHER LIMITS ON CONTRIBUTORS' INVESTMENT DISCRETION AS 1,142
REQUIRED UNDER SECTION 529 OF THE INTERNAL REVENUE CODE. 1,143
(E) THE INVESTMENT AGENTS WITH WHICH THE AUTHORITY 1,145
CONTRACTS SHALL DISCHARGE THEIR DUTIES WITH RESPECT TO PROGRAM 1,146
FUNDS WITH THE CARE AND DILIGENCE THAT A PRUDENT PERSON FAMILIAR 1,148
28
WITH SUCH MATTERS AND WITH THE CHARACTER AND AIMS OF THE PROGRAM 1,149
WOULD USE.
(F) THE ASSETS OF THE PROGRAM SHALL BE PRESERVED, 1,151
INVESTED, AND EXPENDED SOLELY FOR THE PURPOSES OF THIS CHAPTER 1,152
AND SHALL NOT BE LOANED OR OTHERWISE TRANSFERRED OR USED BY THE 1,154
STATE FOR ANY OTHER PURPOSE. THIS SECTION SHALL NOT BE CONSTRUED
TO PROHIBIT THE INVESTMENT AGENTS OF THE AUTHORITY FROM 1,155
INVESTING, BY PURCHASE OR OTHERWISE, IN BONDS, NOTES, OR OTHER 1,157
OBLIGATIONS OF THE STATE OR ANY AGENCY OR INSTRUMENTALITY OF THE 1,158
STATE. UNLESS OTHERWISE SPECIFIED BY THE AUTHORITY, ASSETS OF 1,159
THE PROGRAM SHALL BE EXPENDED IN THE FOLLOWING ORDER OF PRIORITY: 1,160
(1) TO MAKE PAYMENTS ON BEHALF OF BENEFICIARIES; 1,162
(2) TO MAKE REFUNDS UPON TERMINATION OF VARIABLE COLLEGE 1,164
SAVINGS PROGRAM CONTRACTS; 1,165
(3) TO PAY THE COSTS OF PROGRAM ADMINISTRATION AND 1,167
OPERATIONS.
(G) NO RECORDS OF THE AUTHORITY INDICATING THE IDENTITY OF 1,169
CONTRIBUTORS AND BENEFICIARIES UNDER THE PROGRAM OR AMOUNTS 1,170
CONTRIBUTED TO, EARNED BY, OR DISTRIBUTED FROM PROGRAM ACCOUNTS 1,171
ARE PUBLIC RECORDS WITHIN THE MEANING OF SECTION 149.43 OF THE 1,172
REVISED CODE.
Sec. 3334.20. (A) AS USED IN THIS SECTION, "STATE AGENCY" 1,174
MEANS EVERY DEPARTMENT, BUREAU, BOARD, COMMISSION, OFFICE, OR 1,176
OTHER ORGANIZED BODY ESTABLISHED BY THE CONSTITUTION OR LAWS OF 1,177
THIS STATE FOR THE EXERCISE OF STATE GOVERNMENT. 1,178
(B) IF A CONDITION ARISES CONCERNING THE INVESTMENT OF 1,180
FUNDS RECEIVED UNDER THE VARIABLE COLLEGE SAVINGS PROGRAM AND 1,181
REQUIRING AN INTERIM PERIOD FOR INVESTMENT OF PROGRAM FUNDS, 1,182
WHICH CONDITION IS DETERMINED PURSUANT TO DIVISION (D) OF THIS 1,183
SECTION, THE OHIO TUITION TRUST AUTHORITY SHALL CHOOSE THE 1,185
TREASURER OF STATE, A STATE AGENCY HAVING INVESTMENT AUTHORITY, 1,186
OR AN INVESTMENT AGENT UNDER CONTRACT WITH THE AUTHORITY TO 1,187
INVEST PROGRAM FUNDS PURSUANT TO THE INVESTMENT PLAN ESTABLISHED 1,188
UNDER DIVISION (A) OF SECTION 3334.19 OF THE REVISED CODE. THE 1,189
29
TREASURER OF STATE, STATE AGENCY, OR INVESTMENT AGENT CHOSEN BY 1,190
THE AUTHORITY PURSUANT TO THIS DIVISION SHALL BE SUBJECT TO THE 1,191
REQUIREMENTS AND CONDITIONS THAT APPLY TO INVESTMENT AGENTS 1,192
SPECIFIED IN SECTION 3334.19 OF THE REVISED CODE. 1,193
(C) THE AUTHORITY SHALL BE THE TRUSTEE OF THE PROGRAM. 1,195
DURING THE INTERIM PERIOD, THE AUTHORITY SHALL RECEIVE AND HOLD 1,196
ALL PAYMENTS, DEPOSITS, AND CONTRIBUTIONS, AS WELL AS GIFTS, 1,197
BEQUESTS, ENDOWMENTS, AND FEDERAL, STATE, OR LOCAL GRANTS AND ANY 1,198
FUNDS FROM ANY OTHER SOURCE, PUBLIC OR PRIVATE, AND ALL EARNINGS, 1,199
UNTIL DISBURSED TO PAY TUITION OR OTHER HIGHER EDUCATION EXPENSES 1,200
OR REFUNDS PURSUANT TO COLLEGE SAVINGS PLANS CONTRACTS. THE 1,201
AUTHORITY SHALL KEEP SUCH FUNDS SEGREGATED FROM ALL OTHER ASSETS 1,202
OF THE AUTHORITY. 1,203
(D) THE AUTHORITY SHALL ADOPT RULES UNDER SECTION 111.15 1,205
OF THE REVISED CODE DEFINING THE CONDITIONS UNDER WHICH AN 1,207
INTERIM INVESTMENT PERIOD IS REQUIRED AND THIS SECTION APPLIES. 1,208
THE RULES SHALL INCLUDE ANY CONDITION REQUIRING THE TERMINATION 1,209
OF THE INTERIM PERIOD AND THE AUTHORITY TO CONTRACT WITH 1,210
ALTERNATIVE INVESTMENT AGENTS PURSUANT TO SECTION 3334.19 OF THE 1,211
REVISED CODE AND ANY OTHER REQUIREMENTS THAT APPLY DURING THE 1,213
INTERIM INVESTMENT PERIOD.
(E) WHEN THE INTERIM PERIOD FOR INVESTMENT OF PROGRAM 1,215
FUNDS TERMINATES, THE INVESTMENT AGENTS SELECTED PURSUANT TO 1,216
SECTION 3334.19 OF THE REVISED CODE FOR THE INVESTMENT OF PROGRAM 1,217
FUNDS SHALL HAVE THE SOLE AUTHORITY TO INVEST PROGRAM FUNDS 1,218
PURSUANT TO THE INVESTMENT PLAN ESTABLISHED UNDER DIVISION (A) OF 1,219
THAT SECTION AND SHALL BE SUBJECT TO THAT SECTION. 1,220
Sec. 3334.21. THE VARIABLE COLLEGE SAVINGS PROGRAM MAY BE 1,222
TERMINATED BY STATUTE OR UPON THE DETERMINATION OF THE OHIO 1,223
TUITION TRUST AUTHORITY THAT THE PROGRAM IS NOT FINANCIALLY 1,224
FEASIBLE. UPON TERMINATION, ALL AMOUNTS HELD IN PROGRAM ACCOUNTS 1,225
SHALL BE RETURNED TO ACCOUNT OWNERS, TO THE EXTENT POSSIBLE, AND 1,226
ANY UNCLAIMED ASSETS IN THE PROGRAM SHALL BE TRANSFERRED TO THE 1,227
UNCLAIMED FUNDS TRUST FUND AND DISPOSED OF IN ACCORDANCE WITH 1,228
30
SECTION 169.05 OF THE REVISED CODE.
Sec. 3366.01. As used in this chapter, the following words 1,238
and terms have the following meanings unless the context 1,239
indicates a different meaning or intent:
(A) "Bond proceedings" means the order, trust, agreement, 1,242
indenture and other agreements, or amendments and supplements to 1,243
the foregoing, or any one or more or combination thereof, 1,244
authorizing or providing for the terms and conditions applicable 1,245
to, or providing for the issuance, security, or liquidity of, 1,246
obligations and the provisions contained in such obligations. 1,247
(B) "Bond service charges" means principal, including 1,250
mandatory sinking fund requirements for retirement of 1,251
obligations, and interest, and redemption premium, if any, 1,252
required to be paid on obligations.
(C) "Bond service fund" means the applicable fund and 1,255
accounts therein created in the bond proceedings for and pledged 1,256
to the payment of bond service charges, including all moneys and 1,257
investments, and earnings from investments, credited and to be 1,258
credited thereto.
(D) "Costs of attendance" means all costs of a student 1,261
incurred in connection with a program of study at an eligible 1,262
institution, as determined by the institution, including tuition; 1,263
instructional fees; room and board; books, computers, and 1,264
supplies; and other related fees, charges, and expenses. 1,265
(E) "Designated nonprofit corporation ADMINISTRATOR" 1,268
means, WITH RESPECT TO ALL OBLIGATIONS ISSUED PRIOR TO SEPTEMBER 1,269
1, 1999, AND TO ALL NONFEDERAL EDUCATION LOANS, the nonprofit 1,271
corporation designated ON NOVEMBER 10, 1992, under division (D) 1,273
of section 3351.07 of the Revised Code to operate exclusively for 1,274
charitable and educational purposes by expanding access to higher 1,275
education financing programs for students and families in need of 1,276
student financial aid. FOR ALL OTHER PURPOSES, "DESIGNATED 1,278
ADMINISTRATOR" MEANS THE OHIO CORPORATION THAT IS A SUBSIDIARY OF 1,279
THE NONPROFIT CORPORATION DESIGNATED UNDER DIVISION (D) OF 1,280
31
SECTION 3351.07 OF THE REVISED CODE AND THAT HAS AGREED TO ENTER 1,282
INTO AN ADMINISTRATION AGREEMENT WITH THE ISSUING AUTHORITY AND 1,283
THE DIRECTOR OF DEVELOPMENT, OR ANY OTHER PERSON THAT ENTERS INTO 1,284
AN ADMINISTRATION AGREEMENT WITH THE ISSUING AUTHORITY AND THE 1,285
DIRECTOR OF DEVELOPMENT. 1,286
(F) "Education loan" means a loan made by an eligible 1,289
lender pursuant to the policy guidelines to or for the benefit of 1,291
a student for the purpose of financing part or all of the
student's costs of attendance. 1,292
(G) "Eligible borrower" means any of the following: 1,295
(1) Individuals who are residents of the state, and who 1,297
are attending and are in good standing in, or who have been 1,298
accepted for attendance at, any eligible institution located in 1,299
this state or elsewhere, on a part-time or full-time basis, to 1,300
pursue an associate, baccalaureate, or advanced degree or a 1,301
nursing diploma; 1,302
(2) Individuals who reside outside the state and who have 1,305
been accepted for attendance at, or who are attending and are in 1,306
good standing in, any eligible institution located in this state, 1,307
on a part-time or full-time basis, to pursue an associate,
baccalaureate, or advanced degree or a nursing diploma; 1,308
(3) Individuals who are parents or legal guardians of, or 1,311
other persons, as set forth in the policy guidelines, borrowing 1,312
under an education loan for the benefit of individuals meeting 1,313
requirements set forth in division (G)(1) or (2) of this section, 1,314
in order to assist them in paying costs of attendance. 1,315
(H)(1) "Eligible institution" means an institution 1,318
described in any of divisions (H)(1)(a), (b), or (c) of this 1,319
section that satisfies all of the requirements set forth in 1,321
divisions (H)(2), (3), and (4) of this section. 1,322
(a) The institution is a state-assisted post-secondary 1,325
educational institution within this state.
(b) The institution is a nonprofit institution within this 1,328
state having a certificate of authorization from the Ohio board 1,329
32
of regents pursuant to Chapter 1713. of the Revised Code. 1,330
(c) The institution is a post-secondary educational 1,333
institution similar to one described in division (H)(1)(a) or (b) 1,334
of this section that is located outside this state and that is 1,335
similarly approved by the appropriate agency of that state. 1,336
(2) The institution is accredited by the appropriate 1,338
regional and, when appropriate, professional accrediting 1,339
associations within whose jurisdiction it falls. 1,340
(3) The institution satisfies the eligibility requirements 1,343
for participation in the federal family education loan program 1,344
authorized under Title IV, Part B, of the "Higher Education Act 1,346
of 1965," 20 U.S.C.A. 1071 et seq., as amended, as long as that 1,348
program remains in existence.
(4) The institution satisfies the other conditions set 1,350
forth in the policy guidelines. 1,351
(I) "Eligible lender" means, WITH RESPECT TO LENDERS 1,353
MAKING NONFEDERAL EDUCATION LOANS, a bank, national banking 1,354
association, savings bank, savings and loan association, or 1,355
credit union having an office in this state that satisfies the 1,356
criteria for eligible lenders established pursuant to the policy 1,357
guidelines. WITH RESPECT TO LENDERS MAKING FEDERAL EDUCATION 1,358
LOANS, "ELIGIBLE LENDER" MEANS ANY PERSON THAT IS PERMITTED TO 1,360
MAKE LOANS UNDER THE FEDERAL FAMILY EDUCATION LOAN PROGRAM 1,361
AUTHORIZED UNDER TITLE IV, PART B, OF THE "HIGHER EDUCATION ACT 1,364
OF 1965," 20 U.S.C.A. 1071 ET SEQ., AS AMENDED; THAT HAS AN 1,365
OFFICE IN THIS STATE; AND THAT SATISFIES THE CRITERIA FOR
ELIGIBLE LENDERS ESTABLISHED PURSUANT TO THE POLICY GUIDELINES. 1,366
(J) "FEDERAL EDUCATION LOAN" MEANS AN EDUCATION LOAN THAT 1,368
IS ORIGINATED IN COMPLIANCE WITH THE FEDERAL FAMILY EDUCATION 1,369
LOAN PROGRAM AUTHORIZED UNDER TITLE IV, PART B, OF THE "HIGHER 1,374
EDUCATION ACT OF 1965," 20 U.S.C.A. 1071 ET SEQ., AS AMENDED. 1,375
(J)(K) "Governmental agency" means the state and any state 1,378
department, division, commission, institution, or authority; the 1,379
United States or any agency thereof; or any agency, commission, 1,380
33
or authority established pursuant to an interstate compact or 1,381
agreement; or any combination of the foregoing. 1,382
(K)(L) "Issuing authority" means the treasurer of state, 1,385
or the officer who by law performs the functions of the treasurer 1,386
of state.
(L)(M) "NONFEDERAL EDUCATION LOAN" MEANS ANY EDUCATION 1,388
LOAN THAT IS NOT A FEDERAL EDUCATION LOAN. 1,390
(N) "Obligations" means the bonds, notes, or securities of 1,393
this state issued by the issuing authority pursuant to this 1,394
chapter.
(M)(O) "Person" means any individual, corporation, 1,397
business trust, estate, trust, partnership, or association, any 1,398
federal, state, interstate, regional, or local governmental 1,399
agency, any subdivision of the state, or any combination of 1,400
these.
(N)(P) "Pledged receipts" means, to the extent the 1,403
following are pledged by the bond proceedings for the payment of 1,404
bond service charges: all receipts representing moneys accruing 1,405
from or in connection with the repayment of education loans, 1,406
including interest and payments from any guarantee or insurance 1,407
in respect to such education loans; accrued interest received 1,408
from the sale of obligations; the balances in the special funds; 1,409
income from the investment of the special funds; all right, 1,410
title, or interest of the state in any education loans and any 1,411
guarantees or insurance in respect thereof; all right, title, and 1,412
interest of the STATE AND THE designated nonprofit corporation 1,414
ADMINISTRATOR in the education loans and any guarantees or 1,416
insurance in respect thereof, and any money representing the
proceeds of obligations or any income from or interest on those 1,417
proceeds; or any other gifts, grants, donations, and pledges and 1,418
any income and receipts therefrom, available and pledged for the 1,419
payment of bond service charges. 1,420
(O)(Q) "Policy guidelines" means the rules adopted 1,423
pursuant to division (A) of section 3366.03 of the Revised Code. 1,424
34
(P)(R) "Proceeds loan" means the transfer, pursuant to a 1,427
loan agreement or agency agreement, of the proceeds of the 1,428
obligations, or the deposit of the proceeds of the obligations 1,429
with a trustee in trust under a trust agreement, indenture, or 1,430
other trust document under the bond proceedings pending their 1,431
disbursement for the purposes authorized by this chapter. 1,432
(Q)(S) "Resident" means any student who would qualify as a 1,435
resident of this state for state subsidy and tuition surcharge 1,436
purposes under rules adopted by the Ohio board of regents under 1,437
section 3333.31 of the Revised Code. 1,438
(R)(T) "Special funds" or "funds" means the bond service 1,441
fund and any other funds, including reserve funds, created under 1,442
the bond proceedings, including all moneys and investments, and 1,443
earnings from investment, credited and to be credited thereto. 1,444
(S)(U) "Student" means an individual described in division 1,447
(G)(1) or (2) of this section who meets requirements established 1,448
under the policy guidelines. "Student" includes dependent and 1,449
independent undergraduate, graduate, and professional students. 1,450
(T)(V) "Subdivision" has the same meaning as in division 1,453
(MM) of section 133.01 of the Revised Code. 1,454
Sec. 3366.03. (A) In furtherance of the public policy and 1,464
purpose set forth in section 3366.02 of the Revised Code and to 1,465
implement that purpose, the director of development, with the 1,466
approval of the issuing authority, shall adopt, amend, or rescind 1,467
rules, pursuant to Chapter 119. of the Revised Code, establishing 1,468
such policy guidelines as the director considers necessary or 1,469
appropriate to provide for creating a secondary market for 1,470
education loans as authorized by this chapter. The policy 1,471
guidelines shall include such provisions as the director 1,472
considers appropriate to further the public policy and purpose 1,473
set forth in section 3366.02 of the Revised Code. 1,475
(B) The director of development or the issuing authority 1,478
or both may:
(1) Enter into agreements with the ANY designated 1,480
35
nonprofit corporation ADMINISTRATOR to provide for the proceeds 1,481
loan for the purchase of education loans on the secondary market; 1,483
(2) Enter into agreements with the ANY designated 1,485
nonprofit corporation ADMINISTRATOR to provide for stimulating 1,486
the making of education loans through the the acquisition of such 1,488
loans, in accordance with the policy guidelines; and 1,489
(3) Do all other acts and enter into contracts and execute 1,492
all instruments necessary or appropriate to carry out the
provisions of this chapter. 1,493
(C) All expenses and obligations incurred by the issuing 1,496
authority or the director of development in carrying out duties 1,497
and in exercising powers under this chapter shall be payable 1,498
solely from, as appropriate, pledged receipts, moneys from the 1,499
sale of obligations, or any amounts contributed by the designated 1,500
nonprofit corporation ADMINISTRATOR. This chapter does not 1,501
authorize the issuing authority to incur debt or bonded 1,502
indebtedness of the state, or to obligate or pledge any moneys 1,503
other than pledged receipts for the payment of any obligations. 1,504
(D) The designated nonprofit corporation ADMINISTRATOR, 1,506
subject to the applicable provisions of this chapter, shall 1,507
purchase education loans from eligible lenders directly or 1,508
indirectly, with moneys loaned or otherwise provided to it under 1,510
this chapter from the proceeds of obligations, which education 1,511
loans are used by and for students for paying costs of attendance 1,513
at eligible institutions.
(E) In accordance with the policy guidelines, the 1,516
designated nonprofit corporation ADMINISTRATOR shall do all of 1,517
the following: 1,518
(1) Specify the terms of and procedures for making, 1,520
selling, purchasing, servicing, and collecting those education 1,521
loans eligible for purchase under the guidelines; 1,522
(2) Take such actions as may be necessary or appropriate 1,525
to establish the terms of, purchase, service or otherwise 1,526
administer, and collect any education loan;
36
(3) With respect to those loans acquired pursuant to this 1,528
chapter, establish the fees including, without limitation, 1,529
origination and loan fees; charges; rates of interest; times of 1,530
payment of interest and principal; late charges; aggregate 1,531
amounts of education loans to be issued per year and in total; 1,532
eligibility and credit criteria of eligible borrowers; 1,533
refinancing or consolidation provisions; criteria for 1,535
participation by eligible lenders; criteria for allocating the 1,536
distribution of education loans among students attending or 1,537
planning to attend different eligible institutions; terms of 1,538
sales and purchases of education loans; and other terms, 1,539
conditions, and provisions of and security for education loans. 1,540
The designated nonprofit corporation ADMINISTRATOR shall 1,542
not purchase any education loan unless the loan conforms to the 1,544
policy guidelines. 1,545
(F) If the director of development determines that 1,547
education loans are not being made in the amount or manner 1,548
anticipated, the designated nonprofit corporation ADMINISTRATOR, 1,549
with the consent of the director, may enter into special 1,551
arrangements with certain eligible lenders pursuant to guidelines 1,552
adopted under this chapter to stimulate the provision of 1,553
education loans.
(G) The designated nonprofit corporation ADMINISTRATOR may 1,556
establish additional procedures and set other terms and 1,558
conditions not inconsistent with the policy guidelines as may be 1,559
necessary or appropriate in connection with the program 1,560
authorized under this chapter.
(H) At least annually by a date specified by the director 1,563
of development, the designated nonprofit corporation
ADMINISTRATOR shall provide to the issuing authority and the 1,565
director of development reports on the use of the proceeds of 1,566
obligations.
(I) FOR PURPOSES OF THIS CHAPTER, ANY DESIGNATED 1,568
ADMINISTRATOR OTHER THAN THE NONPROFIT CORPORATION DESIGNATED 1,569
37
UNDER DIVISION (D) OF SECTION 3351.07 OF THE REVISED CODE SHALL 1,570
BE A PERSON THAT MAINTAINS ITS PRINCIPAL PLACE OF BUSINESS IN THE 1,572
STATE AND THAT HAS AS ITS PRINCIPAL BUSINESS THE MAKING, 1,573
PURCHASING, HOLDING, OR SELLING OF LOANS MADE TO FINANCE 1,574
INDIVIDUALS' COST OF POST-SECONDARY EDUCATION. 1,575
Sec. 3366.04. (A) The issuing authority may issue 1,585
obligations under this section to provide money to make proceeds 1,586
loans to the designated nonprofit corporation ADMINISTRATOR for 1,587
the purpose of acquiring education loans, or needed for 1,588
capitalized interest, for funding reserves, and for paying costs 1,589
and expenses incurred in connection with the issuance, carrying, 1,590
securing, paying, redeeming, or retirement of the obligations or 1,591
any obligations refunded thereby, including payment of costs and 1,592
expenses relating to letters of credit, lines of credit, 1,593
insurance, put agreements, standby purchase agreements, indexing, 1,594
marketing, remarketing and administrative arrangements, interest 1,595
swap or hedging agreements, and any other credit enhancement 1,596
facility as defined in division (H) of section 133.01 of the 1,597
Revised Code, liquidity, remarketing, renewal, or refunding 1,598
arrangements, all of which are authorized by this section. The 1,599
proceeds thereof shall, as provided in the bond proceedings, be 1,600
loaned, or otherwise made available as a proceeds loan, to the 1,601
designated nonprofit corporation ADMINISTRATOR. The issuing 1,602
authority may appoint trustees, paying agents, and transfer 1,604
agents and may retain the services of financial advisors, 1,605
accounting experts, and attorneys, and retain or contract for the 1,606
services of marketing, remarketing, indexing, and administrative 1,607
agents, other consultants, and independent contractors, including 1,608
printing services, as are necessary to carry out the provisions 1,609
of this section. The costs of such services are allowable costs 1,610
payable from the proceeds of such obligations. 1,611
(B) The holders or owners of obligations shall have no 1,614
right to have taxes levied by the general assembly, or any moneys 1,615
other than pledged receipts obligated or pledged, and any moneys 1,616
38
other than pledged receipts shall not be obligated or pledged, 1,617
for the payment of bond service charges. The obligations are not 1,618
debts of the state, bond service charges are payable solely from 1,619
the revenues and funds pledged as pledged receipts for their 1,620
payment, and the right of such holders and owners to payment of 1,621
bond service charges is limited to pledged receipts as provided 1,622
in the bond proceedings, and each such obligation shall bear on 1,623
its face a statement to that effect. No money, including money 1,624
from the general revenue fund, shall be appropriated, obligated, 1,625
or used to pay bond service charges or the costs incurred in the 1,626
administration of this chapter, other than pledged receipts. 1,627
(C) Obligations shall be authorized by order of the 1,630
issuing authority at the request of the designated nonprofit
corporation ADMINISTRATOR and with the approval of the director 1,631
of development, and the bond proceedings shall provide for the 1,633
purpose thereof and the principal amount or amounts, and shall 1,634
provide for or authorize the manner for determining the principal 1,635
maturity or maturities, the interest rate or rates or the maximum 1,636
interest rate, the date of the obligations and the dates of 1,637
payment of interest thereon, their denomination, and the 1,638
establishment within or outside this state of a place or places 1,639
of payment of bond service charges. Sections 9.98 to 9.983 of 1,640
the Revised Code apply to obligations issued under this section. 1,642
The purpose of such obligations may be stated in the bond 1,643
proceedings in terms describing the general purpose to be served. 1,644
The bond proceedings shall also provide, subject to the 1,645
provisions of any other applicable bond proceedings, for the
pledge of, and the granting of a security interest in, all, or 1,646
such part as the issuing authority may determine, of the pledged 1,647
receipts to the payment of bond service charges, which pledge may 1,648
be made and security interest granted, subject to the provisions 1,649
of any applicable prior bond proceedings, either prior to or on a 1,650
parity with or subordinate to other expenses, claims, or 1,651
payments, and may be made or granted to secure obligations senior 1,652
39
or subordinate to, or on a parity with, obligations theretofore 1,653
or thereafter issued, if and to the extent provided in the bond 1,654
proceedings. The pledged receipts so pledged or subject to a 1,655
security interest and thereafter received by the issuing 1,656
authority or the designated nonprofit corporation ADMINISTRATOR 1,657
on behalf of the issuing authority or otherwise received are 1,659
immediately subject to such pledge and security interest without 1,661
any physical delivery thereof or further act, and such pledge and 1,662
security interest are valid, binding, and enforceable against all 1,663
parties having claims of any kind against the state or any 1,664
governmental agency, or against the designated nonprofit 1,665
corporation ADMINISTRATOR, whether or not such parties have 1,667
notice thereof, and shall create a perfected security interest 1,668
for all purposes of Chapter 1309. of the Revised Code, without 1,669
the necessity for separation or delivery or possession of the 1,670
pledged receipts, or for the filing or recording of the bond 1,671
proceedings by which such pledge and security interest are 1,672
created or any certificate, statement, or other document with 1,673
respect thereto; and the pledge of such pledged receipts and the 1,674
security interest are effective and the money therefrom and 1,675
thereof may be applied to the purposes for which pledged without 1,676
necessity for any act of appropriation. Every pledge made and 1,677
security interest granted, and every covenant and agreement made 1,678
with respect thereto in the bond proceedings may therein be 1,679
extended to the benefit of the owners and holders of obligations 1,680
authorized by this section, and to any trustee therefor, for the 1,681
further security of the payment of the bond service charges. 1,682
(D) The bond proceedings may contain additional provisions 1,685
as to:
(1) The redemption of obligations prior to maturity at 1,687
such price or prices and under such terms and conditions as are 1,688
provided in the bond proceedings; 1,689
(2) Other terms of the obligations; 1,691
(3) Limitations on the issuance of additional obligations; 1,694
40
(4) The terms of any trust agreement or indenture securing 1,697
the obligations or under which the same may be issued;
(5) The investment of the proceeds of obligations and 1,699
amounts on deposit in the special funds; 1,700
(6) Any or every provision of the bond proceedings being 1,703
binding upon such officer, board, commission, authority, agency, 1,704
department, or other person or body as may from time to time have 1,705
the authority under law to take such actions as may be necessary 1,706
to perform all or any part of the duty required by such
provision; 1,707
(7) Any provision that may be made in a trust agreement or 1,710
indenture;
(8) Provisions for the use of the proceeds of repayment of 1,713
education loans to acquire additional education loans;
(9) Any other or additional agreements with the holders of 1,716
the obligations, the trustee therefor, or the designated
nonprofit corporation ADMINISTRATOR, relating to the obligations 1,717
or the security therefor, including the assignment of security 1,719
obtained or to be obtained for education loans. 1,720
(E) The obligations and any coupons pertaining to 1,723
obligations shall be in the form specified in the bond
proceedings and shall be signed by or bear the facsimile 1,724
signature of the issuing authority. Any obligations or coupons 1,725
may be executed by the person who, on the date of execution, is 1,726
the proper issuing authority although on the date of such bonds 1,727
or coupons such person was not the issuing authority. In case 1,728
the issuing authority whose signature or a facsimile of whose 1,729
signature appears on any such obligation or coupon ceases to be 1,730
the issuing authority before delivery thereof, such signature or 1,731
facsimile is nevertheless valid and sufficient for all purposes 1,732
as if that official had remained the issuing authority until such 1,733
delivery. 1,734
(F) All obligations are negotiable instruments and 1,737
securities under Chapter 1308. of the Revised Code, subject to 1,738
41
the provisions of the bond proceedings as to registration. The 1,739
obligations may be issued in coupon or in registered form, or 1,740
both, as the issuing authority determines. Provision may be 1,741
made for the registration of any obligations with coupons 1,742
attached thereto as to principal alone or as to both principal 1,743
and interest, their exchange for obligations so registered, and 1,744
for the conversion or reconversion into obligations with coupons 1,745
attached thereto of any obligations registered as to both 1,746
principal and interest, and for reasonable charges for such 1,747
registration, exchange, conversion, and reconversion. 1,748
(G) Obligations may be sold at public sale or at private 1,751
sale, as determined by the issuing authority in the bond 1,752
proceedings.
(H) Pending preparation of definitive obligations, the 1,755
issuing authority may issue interim receipts or certificates 1,756
which shall be exchanged for such definitive obligations. 1,757
(I) In the discretion of the issuing authority, 1,759
obligations may be secured additionally by a trust agreement or 1,760
indenture between the issuing authority and a corporate trustee 1,761
and, if so provided for in the bond proceedings, any other 1,762
necessary or appropriate party. Any such trustee shall be a 1,763
trust company, bank, or national banking association authorized 1,764
to exercise trust powers within the state. Any such agreement or 1,765
indenture may contain the order authorizing the issuance of the 1,766
obligations, any provisions that may be contained in any bond 1,767
proceedings, and other provisions which are customary or 1,768
appropriate in an agreement or indenture of such type, including, 1,769
but not limited to: 1,770
(1) Maintenance of each pledge, security interest, and 1,772
trust agreement, indenture, or other instrument comprising part 1,773
of the bond proceedings until the bond service charges on the 1,774
obligations secured thereby have been fully paid, or provision 1,775
therefor has been made in accordance with the bond proceedings; 1,776
(2) In the event of default in any payments required to be 1,779
42
made by the bond proceedings, or any other agreement of the
issuing authority made as a part of the contract under which the 1,780
obligations were issued, enforcement of such payments or 1,781
agreement by mandamus, the appointment of a receiver, suit in 1,782
equity, action at law, or any combination of the foregoing; 1,783
(3) The rights and remedies of the holders of obligations 1,786
and of the trustee, and provisions for protecting and enforcing 1,787
them, including limitations on rights of individual holders of 1,788
obligations;
(4) The replacement of any obligations that become 1,790
mutilated or are destroyed, lost, or stolen; 1,791
(5) Such other provisions as the trustee and the issuing 1,794
authority agree upon, including limitations, conditions, or 1,795
qualifications relating to the education loans that may be made 1,796
or acquired pursuant to the trust agreement or indenture.
(J) Any holder of obligations or a trustee under the bond 1,799
proceedings, except to the extent that rights are restricted by 1,800
the bond proceedings, may by any suitable form of legal 1,801
proceedings, protect and enforce any rights under the laws of 1,802
this state or granted by such bond proceedings. Such rights
include the right to compel the performance of all duties of the 1,803
issuing authority or the director of development required by this 1,804
chapter or the bond proceedings; to enjoin unlawful activities; 1,805
and, in the event of default with respect to the payment of any 1,806
bond service charges on any obligations or in the performance of 1,807
any covenant or agreement on the part of the issuing authority or 1,808
the director of development in the bond proceedings, to apply to 1,809
a court having jurisdiction to appoint a receiver to receive and 1,810
administer the pledged receipts pledged to the payment of the 1,811
bond service charges on such obligations or which are the subject 1,812
of the covenant or agreement, with full power to pay and to 1,813
provide for payment of bond service charges on such obligations 1,814
and with such powers, subject to the direction of the court, as 1,815
are accorded receivers in general equity cases, excluding any 1,816
43
power to pledge revenues or receipts or other income or moneys, 1,817
other than pledged receipts, and excluding any power to take 1,818
possession of, or cause the sale or otherwise dispose of, any 1,819
property other than the pledged receipts. 1,820
Each duty of the issuing authority, of each governmental 1,822
agency including the director of development, of the designated 1,823
nonprofit corporation ADMINISTRATOR, and of any of the officers, 1,824
members, or employees of any of the foregoing, undertaken 1,826
pursuant to the bond proceedings or any agreement made under 1,827
authority of this chapter, and each duty in every agreement by or 1,828
with the issuing authority under this chapter, each governmental 1,829
agency including the director of development, and the designated 1,830
nonprofit corporation ADMINISTRATOR, is hereby established as a 1,831
duty of the issuing authority, the governmental agency, or the 1,833
designated nonprofit corporation ADMINISTRATOR, respectively, and 1,834
of each such officer, member, or employee having authority to 1,836
perform such duty, specifically enjoined by the law resulting 1,837
from an office, trust, or station within the meaning of section 1,838
2731.01 of the Revised Code. 1,839
The person who is at the time the issuing authority or the 1,842
director of development, or the officers or employees of either 1,843
of them, are not liable in their personal capacities on any 1,844
obligations or any agreements of or with the issuing authority or 1,845
the director of development.
(K) The issuing authority may issue obligations for the 1,848
refunding, including funding and retirement, and advance
refunding with or without payment or redemption prior to 1,849
maturity, of any obligations previously issued. Such obligations 1,850
may be issued in amounts sufficient for payment of the principal 1,851
amount of the prior obligations, any redemption premiums thereon, 1,852
principal maturities of any such obligations maturing prior to 1,853
the redemption of the remaining obligations on a parity 1,854
therewith, interest accrued or to accrue to the maturity dates or 1,855
dates of redemption of such obligations, and expenses incurred or 1,856
44
to be incurred in connection with such issuance and such 1,857
refunding, funding, and retirement. Subject to the bond 1,858
proceedings therefor, the portion of proceeds of the sale of 1,859
obligations issued under this division to be applied to bond 1,860
service charges on the prior obligations shall be credited to an 1,861
appropriate account held by the trustee for such prior or new 1,862
obligations or to the appropriate account in the bond service 1,863
fund for such obligations. Obligations authorized under this 1,864
division shall be deemed to be issued for those purposes for 1,865
which such prior obligations were issued and are subject to the 1,866
provisions of this section pertaining to other obligations, 1,867
except as otherwise provided in this section. 1,868
(L) The authority to issue obligations under this section 1,871
includes authority to issue obligations in the form of bond 1,872
anticipation notes and to renew the same from time to time by the 1,873
issuance of new notes. The holders of such notes or interest 1,874
coupons pertaining thereto shall have a right to be paid solely 1,875
from the pledged receipts and special funds that may be pledged 1,876
to the payment of the bonds anticipated, or from the proceeds of 1,877
such anticipated bonds or renewal notes, or both, as the issuing 1,878
authority provides in the order authorizing such notes. Such 1,879
notes may be additionally secured by covenants of the issuing 1,880
authority and the director of development to the effect that the 1,881
issuing authority and the director of development will do such or 1,882
all things necessary for the issuance of such bonds or renewal 1,883
notes in appropriate amounts, and apply the proceeds thereof to 1,884
the extent necessary, to make full payment of the principal of 1,885
and interest on such notes at the time or times contemplated, as 1,886
provided in such order. For such THIS purpose, the issuing 1,888
authority shall issue bonds or renewal notes in such principal 1,889
amount and upon such terms as may be necessary to provide funds 1,890
to pay, when required, the principal of and interest and any 1,892
premium on such notes. Subject to this division, all provisions 1,893
for and references to obligations in this section are applicable 1,894
45
to notes authorized under this division.
The issuing authority in the bond proceedings authorizing 1,897
the issuance of bond anticipation notes shall set forth for such 1,898
bonds an estimated interest rate and a schedule of principal 1,899
payments for such bonds and the annual maturity dates thereof, 1,900
but this provision does not modify any authority in this section 1,901
to pledge receipts to, to grant a security interest in those 1,902
receipts for the purpose of securing, and to covenant to issue 1,903
bonds to fund, the payment of principal of and interest and any 1,904
premium on such notes, or to provide in the bond proceedings
authorizing the issuance of the anticipated bonds interest rates 1,905
and a schedule of principal payments for such bonds and the 1,906
annual maturity dates thereof which differ from the estimates in 1,907
the bond proceedings authorizing the issuance of such bond 1,908
anticipation notes. 1,909
(M) Obligations issued under this section are lawful 1,912
investments for banks; savings banks; savings and loan
associations; credit union share guarantee corporations; trust 1,914
companies; trustees; fiduciaries; insurance companies, including 1,915
domestic for life and domestic not for life; trustees or other 1,916
officers having charge of sinking and bond retirement or other 1,917
special funds of the state and of subdivisions and taxing 1,918
districts of the state; the commissioners of the sinking fund of 1,919
the state; the administrator of workers' compensation, subject to 1,920
the approval of the workers' compensation board; the state 1,921
teachers retirement system; the public employees retirement 1,922
system; the school employees retirement system; and the Ohio 1,923
police and fire pension fund, notwithstanding any other 1,924
provisions of the Revised Code or rules adopted pursuant to those 1,928
provisions by any agency of the state with respect to investments 1,929
by them, and are also eligible as security for the repayment of 1,930
the deposit of public moneys.
(N) Provision may be made in the applicable bond 1,933
proceedings for the establishment of separate accounts in the 1,934
46
bond service fund and for the application of such accounts only 1,935
to the specified bond service charges on obligations pertinent to 1,936
such accounts and bond service fund and for other accounts 1,937
therein within the general purposes of such fund. Unless 1,938
otherwise provided in any applicable bond proceedings, moneys to 1,939
the credit of or in the several special funds established 1,940
pursuant to this section shall be invested and disbursed as 1,941
provided in the bond proceedings.
(O) The issuing authority shall pledge and grant a 1,944
security interest in all, or such portion as the issuing
authority determines, of the pledged receipts to the payment of 1,945
bond service charges on obligations, and for the establishment 1,946
and maintenance of any reserves, as provided in the bond 1,947
proceedings, and make other provisions therein with respect to 1,948
pledged receipts as authorized by this chapter, which provisions 1,949
are controlling notwithstanding any other provisions of law 1,950
pertaining thereto. 1,951
(P) The obligations, the transfer thereof, and the 1,954
interest, accreted amount, and other income therefrom, including 1,955
any profit made on the sale thereof, shall at all times be free 1,956
from taxation, direct or indirect, within this state.
Sec. 5747.01. Except as otherwise expressly provided or 1,966
clearly appearing from the context, any term used in this chapter 1,967
has the same meaning as when used in a comparable context in the 1,968
Internal Revenue Code, and all other statutes of the United 1,969
States relating to federal income taxes. 1,970
As used in this chapter: 1,972
(A) "Adjusted gross income" or "Ohio adjusted gross 1,974
income" means adjusted gross income as defined and used in the 1,975
Internal Revenue Code, adjusted as provided in this section: 1,976
(1) Add interest or dividends on obligations or securities 1,978
of any state or of any political subdivision or authority of any 1,979
state, other than this state and its subdivisions and 1,980
authorities.
47
(2) Add interest or dividends on obligations of any 1,982
authority, commission, instrumentality, territory, or possession 1,983
of the United States that are exempt from federal income taxes 1,984
but not from state income taxes. 1,985
(3) Deduct interest or dividends on obligations of the 1,987
United States and its territories and possessions or of any 1,988
authority, commission, or instrumentality of the United States to 1,989
the extent included in federal adjusted gross income but exempt 1,990
from state income taxes under the laws of the United States. 1,991
(4) Deduct disability and survivor's benefits to the 1,993
extent included in federal adjusted gross income. 1,994
(5) Deduct benefits under Title II of the Social Security 1,996
Act and tier 1 railroad retirement benefits to the extent 1,997
included in federal adjusted gross income under section 86 of the 1,998
Internal Revenue Code. 1,999
(6) Add, in the case of a taxpayer who is a beneficiary of 2,001
a trust that makes an accumulation distribution as defined in 2,002
section 665 of the Internal Revenue Code, the portion, if any, of 2,003
such distribution that does not exceed the undistributed net 2,004
income of the trust for the three taxable years preceding the 2,005
taxable year in which the distribution is made. "Undistributed 2,006
net income of a trust" means the taxable income of the trust 2,007
increased by (a)(i) the additions to adjusted gross income 2,008
required under division (A) of this section and (ii) the personal 2,009
exemptions allowed to the trust pursuant to section 642(b) of the 2,010
Internal Revenue Code, and decreased by (b)(i) the deductions to 2,011
adjusted gross income required under division (A) of this 2,012
section, (ii) the amount of federal income taxes attributable to 2,013
such income, and (iii) the amount of taxable income that has been 2,014
included in the adjusted gross income of a beneficiary by reason 2,015
of a prior accumulation distribution. Any undistributed net 2,016
income included in the adjusted gross income of a beneficiary 2,017
shall reduce the undistributed net income of the trust commencing 2,018
with the earliest years of the accumulation period. 2,019
48
(7) Deduct the amount of wages and salaries, if any, not 2,021
otherwise allowable as a deduction but that would have been 2,022
allowable as a deduction in computing federal adjusted gross 2,023
income for the taxable year, had the targeted jobs credit allowed 2,024
and determined under sections 38, 51, and 52 of the Internal 2,025
Revenue Code not been in effect. 2,026
(8) Deduct any interest or interest equivalent on public 2,028
obligations and purchase obligations to the extent included in 2,029
federal adjusted gross income. 2,030
(9) Add any loss or deduct any gain resulting from the 2,032
sale, exchange, or other disposition of public obligations to the 2,033
extent included in federal adjusted gross income. 2,034
(10) Regarding tuition credits purchased under Chapter 2,036
3334. of the Revised Code: 2,038
(a) Deduct the following: 2,040
(i) For credits that as of the end of the taxable year 2,043
have not been refunded pursuant to the termination of a tuition
payment contract under section 3334.10 of the Revised Code, the 2,045
amount of income related to the credits, to the extent included 2,046
in federal adjusted gross income;
(ii) For credits that during the taxable year have been 2,049
refunded pursuant to the termination of a tuition payment
contract under section 3334.10 of the Revised Code, the excess of 2,050
the total purchase price of the tuition credits refunded over the 2,051
amount of refund, to the extent the amount of the excess was not 2,052
deducted in determining federal adjusted gross income. 2,053
(b) Add the following: 2,055
(i) For credits that as of the end of the taxable year 2,058
have not been refunded pursuant to the termination of a tuition
payment contract under section 3334.10 of the Revised Code, the 2,059
amount of loss related to the credits, to the extent the amount 2,060
of the loss was deducted in determining federal adjusted gross 2,061
income;
(ii) For credits that during the taxable year have been 2,064
49
refunded pursuant to the termination of a tuition payment
contract under section 3334.10 of the Revised Code, the excess of 2,066
the amount of refund over the purchase price of each tuition 2,067
credit refunded, to the extent not included in federal adjusted 2,068
gross income DEDUCT OR ADD AMOUNTS, AS PROVIDED UNDER SECTION 2,069
5747.70 OF THE REVISED CODE, RELATED TO CONTRIBUTIONS TO VARIABLE 2,071
COLLEGE SAVINGS PROGRAM ACCOUNTS MADE OR TUITION CREDITS 2,072
PURCHASED PURSUANT TO CHAPTER 3334. OF THE REVISED CODE. 2,073
(11)(a) Deduct, to the extent not otherwise allowable as a 2,074
deduction or exclusion in computing federal or Ohio adjusted 2,075
gross income for the taxable year, the amount the taxpayer paid 2,076
during the taxable year for medical care insurance and qualified 2,077
long-term care insurance for the taxpayer, the taxpayer's spouse, 2,078
and dependents. No deduction for medical care insurance under 2,079
division (A)(11) of this section shall be allowed either to any
taxpayer who is eligible to participate in any subsidized health 2,080
plan maintained by any employer of the taxpayer or of the 2,081
taxpayer's spouse, or to any taxpayer who is entitled to, or on 2,082
application would be entitled to, benefits under part A of Title 2,083
XVIII of the "Social Security Act," 49 Stat. 620 (1935), 42 2,084
U.S.C. 301, as amended. For the purposes of division (A)(11)(a) 2,085
of this section, "subsidized health plan" means a health plan for 2,086
which the employer pays any portion of the plan's cost. The 2,087
deduction allowed under division (A)(11)(a) of this section shall 2,088
be the net of any related premium refunds, related premium 2,089
reimbursements, or related insurance premium dividends received 2,090
during the taxable year. 2,091
(b) Deduct, to the extent not otherwise deducted or 2,093
excluded in computing federal or Ohio adjusted gross income 2,094
during the taxable year, the amount the taxpayer paid during the 2,095
taxable year, not compensated for by any insurance or otherwise, 2,096
for medical care of the taxpayer, the taxpayer's spouse, and 2,097
dependents, to the extent the expenses exceed seven and one-half 2,098
per cent of the taxpayer's federal adjusted gross income. 2,099
50
(c) For purposes of division (A)(11) of this section, 2,101
"medical care" has the meaning given in section 213 of the 2,102
Internal Revenue Code, subject to the special rules, limitations, 2,103
and exclusions set forth therein, and "qualified long-term care" 2,104
has the same meaning given in section 7702(B)(b) of the Internal 2,105
Revenue Code.
(12)(a) Deduct any amount included in federal adjusted 2,107
gross income solely because the amount represents a reimbursement 2,108
or refund of expenses that in any year the taxpayer had deducted 2,110
as an itemized deduction pursuant to section 63 of the Internal 2,111
Revenue Code and applicable United States department of the 2,112
treasury regulations. The deduction otherwise allowed under 2,113
division (A)(12)(a) of this section shall be reduced to the 2,114
extent the reimbursement is attributable to an amount the 2,115
taxpayer deducted under this section in any taxable year. 2,116
(b) Add any amount not otherwise included in Ohio adjusted 2,118
gross income for any taxable year to the extent that the amount 2,119
is attributable to the recovery during the taxable year of any 2,120
amount deducted or excluded in computing federal or Ohio adjusted 2,121
gross income in any taxable year. 2,122
(13) Deduct any portion of the deduction described in 2,124
section 1341(a)(2) of the Internal Revenue Code, for repaying 2,125
previously reported income received under a claim of right, that 2,126
meets both of the following requirements: 2,127
(a) It is allowable for repayment of an item that was 2,129
included in the taxpayer's adjusted gross income for a prior 2,130
taxable year and did not qualify for a credit under division (A) 2,131
or (B) of section 5747.05 of the Revised Code for that year; 2,132
(b) It does not otherwise reduce the taxpayer's adjusted 2,134
gross income for the current or any other taxable year. 2,135
(14) Deduct an amount equal to the deposits made to, and 2,137
net investment earnings of, a medical savings account during the 2,138
taxable year, in accordance with section 3924.66 of the Revised 2,139
Code. The deduction allowed by division (A)(14) of this section 2,140
51
does not apply to medical savings account deposits and earnings 2,141
otherwise deducted or excluded for the current or any other 2,142
taxable year from the taxpayer's federal adjusted gross income. 2,143
(15)(a) Add an amount equal to the funds withdrawn from a 2,145
medical savings account during the taxable year, and the net 2,146
investment earnings on those funds, when the funds withdrawn were 2,147
used for any purpose other than to reimburse an account holder 2,148
for, or to pay, eligible medical expenses, in accordance with 2,149
section 3924.66 of the Revised Code;
(b) Add the amounts distributed from a medical savings 2,151
account under division (A)(2) of section 3924.68 of the Revised 2,152
Code during the taxable year. 2,153
(16) Add any amount claimed as a credit under section 2,155
5747.059 of the Revised Code to the extent that such amount 2,156
satisfies either of the following:
(a) The amount was deducted or excluded from the 2,158
computation of the taxpayer's federal adjusted gross income as 2,159
required to be reported for the taxpayer's taxable year under the 2,160
Internal Revenue Code;
(b) The amount resulted in a reduction of the taxpayer's 2,162
federal adjusted gross income as required to be reported for any 2,163
of the taxpayer's taxable years under the Internal Revenue Code. 2,164
(17) Deduct the amount contributed by the taxpayer to an 2,166
individual development account program established by a county 2,167
department of human services pursuant to sections 329.11 to 2,168
329.14 of the Revised Code for the purpose of matching funds 2,169
deposited by program participants. On request of the tax 2,170
commissioner, the taxpayer shall provide any information that, in
the tax commissioner's opinion, is necessary to establish the 2,171
amount deducted under division (A)(17) of this section. 2,172
(18) Beginning in taxable year 2001, if the taxpayer is 2,174
married and files a joint return and the combined federal 2,176
adjusted gross income of the taxpayer and the taxpayer's spouse 2,177
for the taxable year does not exceed one hundred thousand
52
dollars, or if the taxpayer is single and has a federal adjusted 2,178
gross income for the taxable year not exceeding fifty thousand 2,180
dollars, deduct amounts paid during the taxable year for 2,181
qualified tuition and fees paid to an eligible institution for 2,182
the taxpayer, the taxpayer's spouse, or any dependent of the
taxpayer, who is a resident of this state and is enrolled in or 2,183
attending a program that culminates in a degree or diploma at an 2,184
eligible institution. The deduction may be claimed only to the 2,185
extent that qualified tuition and fees are not otherwise deducted 2,186
or excluded for any taxable year from federal or Ohio adjusted 2,187
gross income. The deduction may not be claimed for educational 2,188
expenses for which the taxpayer claims a credit under section 2,189
5747.27 of the Revised Code.
(19) Add any reimbursement received during the taxable 2,191
year of any amount the taxpayer deducted under division (A)(18) 2,192
of this section in any previous taxable year to the extent the 2,193
amount is not otherwise included in Ohio adjusted gross income. 2,194
(B) "Business income" means income arising from 2,196
transactions, activities, and sources in the regular course of a 2,197
trade or business and includes income from tangible and 2,198
intangible property if the acquisition, rental, management, and 2,199
disposition of the property constitute integral parts of the 2,200
regular course of a trade or business operation. 2,201
(C) "Nonbusiness income" means all income other than 2,203
business income and may include, but is not limited to, 2,204
compensation, rents and royalties from real or tangible personal 2,205
property, capital gains, interest, dividends and distributions, 2,206
patent or copyright royalties, or lottery winnings, prizes, and 2,207
awards. 2,208
(D) "Compensation" means any form of remuneration paid to 2,210
an employee for personal services. 2,211
(E) "Fiduciary" means a guardian, trustee, executor, 2,213
administrator, receiver, conservator, or any other person acting 2,214
in any fiduciary capacity for any individual, trust, or estate. 2,215
53
(F) "Fiscal year" means an accounting period of twelve 2,217
months ending on the last day of any month other than December. 2,218
(G) "Individual" means any natural person. 2,220
(H) "Internal Revenue Code" means the "Internal Revenue 2,222
Code of 1986," 100 Stat. 2085, 26 U.S.C.A. 1, as amended. 2,223
(I) "Resident" means: 2,225
(1) An individual who is domiciled in this state, subject 2,227
to section 5747.24 of the Revised Code; 2,228
(2) The estate of a decedent who at the time of death was 2,231
domiciled in this state. The domicile tests of section 5747.24 2,232
of the Revised Code and any election under section 5747.25 of the 2,233
Revised Code are not controlling for purposes of division (I)(2) 2,234
of this section.
(J) "Nonresident" means an individual or estate that is 2,236
not a resident. An individual who is a resident for only part of 2,237
a taxable year is a nonresident for the remainder of that taxable 2,238
year. 2,239
(K) "Pass-through entity" has the same meaning as in 2,241
section 5733.04 of the Revised Code. 2,242
(L) "Return" means the notifications and reports required 2,244
to be filed pursuant to this chapter for the purpose of reporting 2,245
the tax due and includes declarations of estimated tax when so 2,246
required. 2,247
(M) "Taxable year" means the calendar year or the 2,249
taxpayer's fiscal year ending during the calendar year, or 2,250
fractional part thereof, upon which the adjusted gross income is 2,251
calculated pursuant to this chapter. 2,252
(N) "Taxpayer" means any person subject to the tax imposed 2,254
by section 5747.02 of the Revised Code or any pass-through entity 2,255
that makes the election under division (D) of section 5747.08 of 2,256
the Revised Code.
(O) "Dependents" means dependents as defined in the 2,258
Internal Revenue Code and as claimed in the taxpayer's federal 2,259
income tax return for the taxable year or which the taxpayer 2,260
54
would have been permitted to claim had the taxpayer filed a 2,261
federal income tax return. 2,263
(P) "Principal county of employment" means, in the case of 2,265
a nonresident, the county within the state in which a taxpayer 2,266
performs services for an employer or, if those services are 2,267
performed in more than one county, the county in which the major 2,268
portion of the services are performed. 2,269
(Q) As used in sections 5747.50 to 5747.55 of the Revised 2,271
Code:
(1) "Subdivision" means any county, municipal corporation, 2,273
park district, or township. 2,274
(2) "Essential local government purposes" includes all 2,276
functions that any subdivision is required by general law to 2,277
exercise, including like functions that are exercised under a 2,278
charter adopted pursuant to the Ohio Constitution. 2,279
(R) "Overpayment" means any amount already paid that 2,281
exceeds the figure determined to be the correct amount of the 2,282
tax. 2,283
(S) "Taxable income" applies to estates only and means 2,285
taxable income as defined and used in the Internal Revenue Code 2,286
adjusted as follows: 2,287
(1) Add interest or dividends on obligations or securities 2,289
of any state or of any political subdivision or authority of any 2,290
state, other than this state and its subdivisions and 2,291
authorities; 2,292
(2) Add interest or dividends on obligations of any 2,294
authority, commission, instrumentality, territory, or possession 2,295
of the United States that are exempt from federal income taxes 2,296
but not from state income taxes; 2,297
(3) Add the amount of personal exemption allowed to the 2,299
estate pursuant to section 642(b) of the Internal Revenue Code; 2,300
(4) Deduct interest or dividends on obligations of the 2,302
United States and its territories and possessions or of any 2,303
authority, commission, or instrumentality of the United States 2,304
55
that are exempt from state taxes under the laws of the United 2,305
States; 2,306
(5) Deduct the amount of wages and salaries, if any, not 2,308
otherwise allowable as a deduction but that would have been 2,309
allowable as a deduction in computing federal taxable income for 2,310
the taxable year, had the targeted jobs credit allowed under 2,311
sections 38, 51, and 52 of the Internal Revenue Code not been in 2,312
effect; 2,313
(6) Deduct any interest or interest equivalent on public 2,315
obligations and purchase obligations to the extent included in 2,316
federal taxable income; 2,317
(7) Add any loss or deduct any gain resulting from sale, 2,319
exchange, or other disposition of public obligations to the 2,320
extent included in federal taxable income; 2,321
(8) Except in the case of the final return of an estate, 2,323
add any amount deducted by the taxpayer on both its Ohio estate 2,324
tax return pursuant to section 5731.14 of the Revised Code, and 2,325
on its federal income tax return in determining either federal 2,326
adjusted gross income or federal taxable income; 2,327
(9)(a) Deduct any amount included in federal taxable 2,329
income solely because the amount represents a reimbursement or 2,330
refund of expenses that in a previous year the decedent had 2,331
deducted as an itemized deduction pursuant to section 63 of the 2,332
Internal Revenue Code and applicable treasury regulations. The 2,334
deduction otherwise allowed under division (S)(9)(a) of this 2,335
section shall be reduced to the extent the reimbursement is 2,336
attributable to an amount the taxpayer or decedent deducted under 2,337
this section in any taxable year. 2,338
(b) Add any amount not otherwise included in Ohio taxable 2,340
income for any taxable year to the extent that the amount is 2,341
attributable to the recovery during the taxable year of any 2,342
amount deducted or excluded in computing federal or Ohio taxable 2,343
income in any taxable year. 2,344
(10) Deduct any portion of the deduction described in 2,346
56
section 1341(a)(2) of the Internal Revenue Code, for repaying 2,347
previously reported income received under a claim of right, that 2,348
meets both of the following requirements: 2,349
(a) It is allowable for repayment of an item that was 2,351
included in the taxpayer's taxable income or the decedent's 2,352
adjusted gross income for a prior taxable year and did not 2,353
qualify for a credit under division (A) or (B) of section 5747.05 2,354
of the Revised Code for that year. 2,355
(b) It does not otherwise reduce the taxpayer's taxable 2,357
income or the decedent's adjusted gross income for the current or 2,358
any other taxable year. 2,359
(11) Add any amount claimed as a credit under section 2,361
5747.059 of the Revised Code to the extent that the amount 2,362
satisfies either of the following: 2,363
(a) The amount was deducted or excluded from the 2,365
computation of the taxpayer's federal taxable income as required 2,366
to be reported for the taxpayer's taxable year under the Internal 2,367
Revenue Code;
(b) The amount resulted in a reduction in the taxpayer's 2,369
federal taxable income as required to be reported for any of the 2,370
taxpayer's taxable years under the Internal Revenue Code. 2,371
(T) "School district income" and "school district income 2,373
tax" have the same meanings as in section 5748.01 of the Revised 2,374
Code. 2,375
(U) As used in divisions (A)(8), (A)(9), (S)(6), and 2,377
(S)(7) of this section, "public obligations," "purchase 2,378
obligations," and "interest or interest equivalent" have the same 2,379
meanings as in section 5709.76 of the Revised Code. 2,380
(V) "Limited liability company" means any limited 2,382
liability company formed under Chapter 1705. of the Revised Code 2,383
or under the laws of any other state. 2,384
(W) "Pass-through entity investor" means any person who, 2,386
during any portion of a taxable year of a pass-through entity, is 2,387
a partner, member, shareholder, or investor in that pass-through 2,388
57
entity.
(X) "Banking day" has the same meaning as in section 2,390
1304.01 of the Revised Code. 2,391
(Y) "Month" means a calendar month. 2,393
(Z) "Quarter" means the first three months, the second 2,395
three months, the third three months, or the last three months of 2,396
the taxpayer's taxable year.
(AA)(1) "Eligible institution" means a state university or 2,398
state institution of higher education as defined in section 2,399
3345.011 of the Revised Code, or a private, nonprofit college, 2,400
university, or other post-secondary institution located in this 2,401
state that possesses a certificate of authorization issued by the 2,402
Ohio board of regents pursuant to Chapter 1713. of the Revised
Code or a certificate of registration issued by the state board 2,403
of proprietary school registration under Chapter 3332. of the 2,404
Revised Code.
(2) "Qualified tuition and fees" means tuition and fees 2,406
imposed by an eligible institution as a condition of enrollment 2,407
or attendance, not exceeding two thousand five hundred dollars in 2,408
each of the individual's first two years of post-secondary 2,409
education. If the individual is a part-time student, "qualified 2,410
tuition and fees" includes tuition and fees paid for the academic
equivalent of the first two years of post-secondary education 2,411
during a maximum of five taxable years, not exceeding a total of 2,412
five thousand dollars. "Qualified tuition and fees" does not 2,413
include:
(a) Expenses for any course or activity involving sports, 2,415
games, or hobbies unless the course or activity is part of the 2,416
individual's degree or diploma program; 2,417
(b) The cost of books, room and board, student activity 2,419
fees, athletic fees, insurance expenses, or other expenses 2,420
unrelated to the individual's academic course of instruction; 2,421
(c) Tuition, fees, or other expenses paid or reimbursed 2,423
through an employer, scholarship, grant in aid, or other 2,424
58
educational benefit program.
(BB) Any term used in this chapter that is not otherwise 2,426
defined in this section and that is not used in a comparable 2,427
context in the Internal Revenue Code and other statutes of the 2,428
United States relating to federal income taxes has the same 2,429
meaning as in section 5733.40 of the Revised Code. 2,430
THIS IS AN INTERIM SECTION EFFECTIVE UNTIL JUNE 1, 2000. 2,432
Sec. 5747.70. (A) IN COMPUTING OHIO ADJUSTED GROSS 2,434
INCOME, A DEDUCTION FROM FEDERAL ADJUSTED GROSS INCOME IS ALLOWED 2,435
TO A CONTRIBUTOR FOR THE AMOUNT CONTRIBUTED DURING THE TAXABLE 2,436
YEAR TO A VARIABLE COLLEGE SAVINGS PROGRAM ACCOUNT AND TO A 2,438
PURCHASER OF TUITION CREDITS UNDER THE OHIO COLLEGE SAVINGS 2,439
PROGRAM CREATED BY CHAPTER 3334. OF THE REVISED CODE TO THE 2,441
EXTENT THAT THE AMOUNTS OF SUCH CONTRIBUTIONS AND PURCHASES WERE 2,442
NOT DEDUCTED IN DETERMINING THE CONTRIBUTOR'S OR PURCHASER'S 2,443
FEDERAL ADJUSTED GROSS INCOME FOR THE TAXABLE YEAR. THE COMBINED
AMOUNT OF CONTRIBUTIONS AND PURCHASES DEDUCTED IN ANY TAXABLE 2,444
YEAR BY A TAXPAYER OR THE TAXPAYER AND THE TAXPAYER'S SPOUSE, 2,445
REGARDLESS OF WHETHER THE TAXPAYER AND THE TAXPAYER'S SPOUSE FILE 2,446
SEPARATE RETURNS OR A JOINT RETURN, IS LIMITED TO TWO THOUSAND 2,448
DOLLARS FOR EACH BENEFICIARY FOR WHOM CONTRIBUTIONS OR PURCHASES 2,449
ARE MADE. IF THE COMBINED ANNUAL CONTRIBUTIONS AND PURCHASES FOR 2,450
A BENEFICIARY EXCEED TWO THOUSAND DOLLARS, THE EXCESS MAY BE 2,451
CARRIED FORWARD AND DEDUCTED IN FUTURE TAXABLE YEARS UNTIL THE 2,452
CONTRIBUTIONS AND PURCHASES HAVE BEEN FULLY DEDUCTED. 2,453
(B) IN COMPUTING OHIO ADJUSTED GROSS INCOME, A DEDUCTION 2,455
FROM FEDERAL ADJUSTED GROSS INCOME IS ALLOWED FOR: 2,456
(1) INCOME RELATED TO TUITION CREDITS AND CONTRIBUTIONS 2,458
THAT AS OF THE END OF THE TAXABLE YEAR HAVE NOT BEEN REFUNDED 2,459
PURSUANT TO THE TERMINATION OF A TUITION PAYMENT CONTRACT OR 2,460
VARIABLE COLLEGE SAVINGS PROGRAM ACCOUNT UNDER SECTION 3334.10 OF 2,461
THE REVISED CODE, TO THE EXTENT THAT SUCH INCOME IS INCLUDED IN 2,462
FEDERAL ADJUSTED GROSS INCOME. 2,463
(2) THE EXCESS OF THE TOTAL PURCHASE PRICE OF TUITION 2,465
59
CREDITS REFUNDED DURING THE TAXABLE YEAR PURSUANT TO THE 2,466
TERMINATION OF A TUITION PAYMENT CONTRACT UNDER SECTION 3334.10 2,467
OF THE REVISED CODE OVER THE AMOUNT OF THE REFUND, TO THE EXTENT 2,468
THE AMOUNT OF THE EXCESS WAS NOT DEDUCTED IN DETERMINING FEDERAL 2,469
ADJUSTED GROSS INCOME. DIVISION (B)(2) OF THIS SECTION APPLIES 2,470
ONLY TO CREDITS FOR WHICH NO DEDUCTION WAS ALLOWABLE UNDER 2,471
DIVISION (A) OF THIS SECTION.
(C) IN COMPUTING OHIO ADJUSTED GROSS INCOME, THERE SHALL 2,473
BE ADDED TO FEDERAL ADJUSTED GROSS INCOME THE AMOUNT OF LOSS 2,474
RELATED TO TUITION CREDITS AND CONTRIBUTIONS THAT AS OF THE END 2,475
OF THE TAXABLE YEAR HAVE NOT BEEN REFUNDED PURSUANT TO THE 2,476
TERMINATION OF A TUITION PAYMENT CONTRACT OR VARIABLE COLLEGE 2,477
SAVINGS PROGRAM ACCOUNT UNDER SECTION 3334.10 OF THE REVISED 2,478
CODE, TO THE EXTENT THAT SUCH LOSS WAS DEDUCTED IN DETERMINING 2,479
FEDERAL ADJUSTED GROSS INCOME.
(D) FOR TAXABLE YEARS IN WHICH DISTRIBUTIONS OR REFUNDS 2,481
ARE MADE UNDER A TUITION PAYMENT OR VARIABLE COLLEGE SAVINGS 2,482
PROGRAM CONTRACT FOR ANY REASON OTHER THAN PAYMENT OF TUITION OR 2,483
OTHER HIGHER EDUCATION EXPENSES, OR THE BENEFICIARY'S DEATH, 2,484
DISABILITY, OR RECEIPT OF A SCHOLARSHIP AS DESCRIBED IN SECTION 2,485
3334.10 OF THE REVISED CODE:
(1) IF THE DISTRIBUTION OR REFUND IS PAID TO THE PURCHASER 2,487
OR CONTRIBUTOR OR BENEFICIARY, ANY PORTION OF THE DISTRIBUTION OR 2,488
REFUND NOT INCLUDED IN THE RECIPIENT'S FEDERAL ADJUSTED GROSS 2,489
INCOME SHALL BE ADDED TO THE RECIPIENT'S FEDERAL ADJUSTED GROSS 2,490
INCOME IN DETERMINING THE RECIPIENT'S OHIO ADJUSTED GROSS INCOME, 2,491
EXCEPT THAT THE AMOUNT ADDED SHALL NOT EXCEED AMOUNTS PREVIOUSLY 2,492
DEDUCTED UNDER DIVISION (A) OF THIS SECTION LESS ANY AMOUNTS 2,493
ADDED UNDER DIVISION (D)(1) OF THIS SECTION IN A PRIOR TAXABLE 2,494
YEAR.
(2) IF AMOUNTS PAID BY A PURCHASER OR CONTRIBUTOR ON OR 2,496
AFTER JANUARY 1, 2000, ARE DISTRIBUTED OR REFUNDED TO SOMEONE 2,497
OTHER THAN THE PURCHASER OR CONTRIBUTOR OR BENEFICIARY, THE 2,499
AMOUNT OF THE PAYMENT NOT INCLUDED IN THE RECIPIENT'S FEDERAL 2,500
60
ADJUSTED GROSS INCOME, LESS ANY AMOUNTS ADDED UNDER DIVISION (D) 2,501
OF THIS SECTION IN A PRIOR TAXABLE YEAR, SHALL BE ADDED TO THE 2,502
RECIPIENT'S FEDERAL ADJUSTED GROSS INCOME IN DETERMINING THE
RECIPIENT'S OHIO ADJUSTED GROSS INCOME. 2,503
Section 2. That existing sections 3334.01, 3334.02, 2,505
3334.08, 3334.10, 3334.11, 3334.12, 3334.15, 3366.01, 3366.03, 2,506
3366.04, and 5747.01 of the Revised Code are hereby repealed. 2,508
Section 3. That section 5747.01 of the Revised Code, as 2,510
amended by H.B. 471 of the 123rd General Assembly, be amended to 2,512
read as follows:
Sec. 5747.01. Except as otherwise expressly provided or 2,521
clearly appearing from the context, any term used in this chapter 2,522
has the same meaning as when used in a comparable context in the 2,523
Internal Revenue Code, and all other statutes of the United 2,524
States relating to federal income taxes. 2,525
As used in this chapter: 2,527
(A) "Adjusted gross income" or "Ohio adjusted gross 2,529
income" means adjusted gross income as defined and used in the 2,530
Internal Revenue Code, adjusted as provided in this section: 2,531
(1) Add interest or dividends on obligations or securities 2,533
of any state or of any political subdivision or authority of any 2,534
state, other than this state and its subdivisions and 2,535
authorities.
(2) Add interest or dividends on obligations of any 2,537
authority, commission, instrumentality, territory, or possession 2,538
of the United States that are exempt from federal income taxes 2,539
but not from state income taxes. 2,540
(3) Deduct interest or dividends on obligations of the 2,542
United States and its territories and possessions or of any 2,543
authority, commission, or instrumentality of the United States to 2,544
the extent included in federal adjusted gross income but exempt 2,545
from state income taxes under the laws of the United States. 2,546
(4) Deduct disability and survivor's benefits to the 2,548
extent included in federal adjusted gross income. 2,549
61
(5) Deduct benefits under Title II of the Social Security 2,551
Act and tier 1 railroad retirement benefits to the extent 2,552
included in federal adjusted gross income under section 86 of the 2,553
Internal Revenue Code. 2,554
(6) Add, in the case of a taxpayer who is a beneficiary of 2,556
a trust that makes an accumulation distribution as defined in 2,557
section 665 of the Internal Revenue Code, the portion, if any, of 2,558
such distribution that does not exceed the undistributed net 2,559
income of the trust for the three taxable years preceding the 2,560
taxable year in which the distribution is made. "Undistributed 2,561
net income of a trust" means the taxable income of the trust 2,562
increased by (a)(i) the additions to adjusted gross income 2,563
required under division (A) of this section and (ii) the personal 2,564
exemptions allowed to the trust pursuant to section 642(b) of the 2,565
Internal Revenue Code, and decreased by (b)(i) the deductions to 2,566
adjusted gross income required under division (A) of this 2,567
section, (ii) the amount of federal income taxes attributable to 2,568
such income, and (iii) the amount of taxable income that has been 2,569
included in the adjusted gross income of a beneficiary by reason 2,570
of a prior accumulation distribution. Any undistributed net 2,571
income included in the adjusted gross income of a beneficiary 2,572
shall reduce the undistributed net income of the trust commencing 2,573
with the earliest years of the accumulation period. 2,574
(7) Deduct the amount of wages and salaries, if any, not 2,576
otherwise allowable as a deduction but that would have been 2,577
allowable as a deduction in computing federal adjusted gross 2,578
income for the taxable year, had the targeted jobs credit allowed 2,579
and determined under sections 38, 51, and 52 of the Internal 2,580
Revenue Code not been in effect. 2,581
(8) Deduct any interest or interest equivalent on public 2,583
obligations and purchase obligations to the extent included in 2,584
federal adjusted gross income. 2,585
(9) Add any loss or deduct any gain resulting from the 2,587
sale, exchange, or other disposition of public obligations to the 2,588
62
extent included in federal adjusted gross income. 2,589
(10) Regarding tuition credits purchased under Chapter 2,591
3334. of the Revised Code: 2,593
(a) Deduct the following: 2,595
(i) For credits that as of the end of the taxable year 2,598
have not been refunded pursuant to the termination of a tuition
payment contract under section 3334.10 of the Revised Code, the 2,600
amount of income related to the credits, to the extent included 2,601
in federal adjusted gross income;
(ii) For credits that during the taxable year have been 2,604
refunded pursuant to the termination of a tuition payment
contract under section 3334.10 of the Revised Code, the excess of 2,605
the total purchase price of the tuition credits refunded over the 2,606
amount of refund, to the extent the amount of the excess was not 2,607
deducted in determining federal adjusted gross income. 2,608
(b) Add the following: 2,610
(i) For credits that as of the end of the taxable year 2,613
have not been refunded pursuant to the termination of a tuition
payment contract under section 3334.10 of the Revised Code, the 2,614
amount of loss related to the credits, to the extent the amount 2,615
of the loss was deducted in determining federal adjusted gross 2,616
income;
(ii) For credits that during the taxable year have been 2,619
refunded pursuant to the termination of a tuition payment
contract under section 3334.10 of the Revised Code, the excess of 2,621
the amount of refund over the purchase price of each tuition 2,622
credit refunded, to the extent not included in federal adjusted 2,623
gross income DEDUCT OR ADD AMOUNTS, AS PROVIDED UNDER SECTION 2,624
5747.70 OF THE REVISED CODE, RELATED TO CONTRIBUTIONS TO VARIABLE 2,626
COLLEGE SAVINGS PROGRAM ACCOUNTS MADE OR TUITION CREDITS 2,627
PURCHASED PURSUANT TO CHAPTER 3334. OF THE REVISED CODE. 2,628
(11)(a) Deduct, to the extent not otherwise allowable as a 2,630
deduction or exclusion in computing federal or Ohio adjusted 2,631
gross income for the taxable year, the amount the taxpayer paid 2,632
63
during the taxable year for medical care insurance and qualified 2,633
long-term care insurance for the taxpayer, the taxpayer's spouse, 2,634
and dependents. No deduction for medical care insurance under 2,635
division (A)(11) of this section shall be allowed either to any
taxpayer who is eligible to participate in any subsidized health 2,636
plan maintained by any employer of the taxpayer or of the 2,637
taxpayer's spouse, or to any taxpayer who is entitled to, or on 2,638
application would be entitled to, benefits under part A of Title 2,639
XVIII of the "Social Security Act," 49 Stat. 620 (1935), 42 2,640
U.S.C. 301, as amended. For the purposes of division (A)(11)(a) 2,641
of this section, "subsidized health plan" means a health plan for 2,642
which the employer pays any portion of the plan's cost. The 2,643
deduction allowed under division (A)(11)(a) of this section shall 2,644
be the net of any related premium refunds, related premium 2,645
reimbursements, or related insurance premium dividends received 2,646
during the taxable year. 2,647
(b) Deduct, to the extent not otherwise deducted or 2,649
excluded in computing federal or Ohio adjusted gross income 2,650
during the taxable year, the amount the taxpayer paid during the 2,651
taxable year, not compensated for by any insurance or otherwise, 2,652
for medical care of the taxpayer, the taxpayer's spouse, and 2,653
dependents, to the extent the expenses exceed seven and one-half 2,654
per cent of the taxpayer's federal adjusted gross income. 2,655
(c) For purposes of division (A)(11) of this section, 2,657
"medical care" has the meaning given in section 213 of the 2,658
Internal Revenue Code, subject to the special rules, limitations, 2,659
and exclusions set forth therein, and "qualified long-term care" 2,660
has the same meaning given in section 7702(B)(b) of the Internal 2,661
Revenue Code.
(12)(a) Deduct any amount included in federal adjusted 2,663
gross income solely because the amount represents a reimbursement 2,664
or refund of expenses that in any year the taxpayer had deducted 2,666
as an itemized deduction pursuant to section 63 of the Internal 2,667
Revenue Code and applicable United States department of the 2,668
64
treasury regulations. The deduction otherwise allowed under 2,669
division (A)(12)(a) of this section shall be reduced to the 2,670
extent the reimbursement is attributable to an amount the 2,671
taxpayer deducted under this section in any taxable year. 2,672
(b) Add any amount not otherwise included in Ohio adjusted 2,674
gross income for any taxable year to the extent that the amount 2,675
is attributable to the recovery during the taxable year of any 2,676
amount deducted or excluded in computing federal or Ohio adjusted 2,677
gross income in any taxable year. 2,678
(13) Deduct any portion of the deduction described in 2,680
section 1341(a)(2) of the Internal Revenue Code, for repaying 2,681
previously reported income received under a claim of right, that 2,682
meets both of the following requirements: 2,683
(a) It is allowable for repayment of an item that was 2,685
included in the taxpayer's adjusted gross income for a prior 2,686
taxable year and did not qualify for a credit under division (A) 2,687
or (B) of section 5747.05 of the Revised Code for that year; 2,688
(b) It does not otherwise reduce the taxpayer's adjusted 2,690
gross income for the current or any other taxable year. 2,691
(14) Deduct an amount equal to the deposits made to, and 2,693
net investment earnings of, a medical savings account during the 2,694
taxable year, in accordance with section 3924.66 of the Revised 2,695
Code. The deduction allowed by division (A)(14) of this section 2,696
does not apply to medical savings account deposits and earnings 2,697
otherwise deducted or excluded for the current or any other 2,698
taxable year from the taxpayer's federal adjusted gross income. 2,699
(15)(a) Add an amount equal to the funds withdrawn from a 2,701
medical savings account during the taxable year, and the net 2,702
investment earnings on those funds, when the funds withdrawn were 2,703
used for any purpose other than to reimburse an account holder 2,704
for, or to pay, eligible medical expenses, in accordance with 2,705
section 3924.66 of the Revised Code;
(b) Add the amounts distributed from a medical savings 2,707
account under division (A)(2) of section 3924.68 of the Revised 2,708
65
Code during the taxable year. 2,709
(16) Add any amount claimed as a credit under section 2,711
5747.059 of the Revised Code to the extent that such amount 2,712
satisfies either of the following:
(a) The amount was deducted or excluded from the 2,714
computation of the taxpayer's federal adjusted gross income as 2,715
required to be reported for the taxpayer's taxable year under the 2,716
Internal Revenue Code;
(b) The amount resulted in a reduction of the taxpayer's 2,718
federal adjusted gross income as required to be reported for any 2,719
of the taxpayer's taxable years under the Internal Revenue Code. 2,720
(17) Deduct the amount contributed by the taxpayer to an 2,722
individual development account program established by a county 2,723
department of job and family services pursuant to sections 329.11 2,724
to 329.14 of the Revised Code for the purpose of matching funds 2,726
deposited by program participants. On request of the tax 2,728
commissioner, the taxpayer shall provide any information that, in
the tax commissioner's opinion, is necessary to establish the 2,729
amount deducted under division (A)(17) of this section. 2,731
(18) Beginning in taxable year 2001, if the taxpayer is 2,733
married and files a joint return and the combined federal 2,735
adjusted gross income of the taxpayer and the taxpayer's spouse 2,736
for the taxable year does not exceed one hundred thousand
dollars, or if the taxpayer is single and has a federal adjusted 2,737
gross income for the taxable year not exceeding fifty thousand 2,739
dollars, deduct amounts paid during the taxable year for 2,740
qualified tuition and fees paid to an eligible institution for 2,741
the taxpayer, the taxpayer's spouse, or any dependent of the
taxpayer, who is a resident of this state and is enrolled in or 2,742
attending a program that culminates in a degree or diploma at an 2,743
eligible institution. The deduction may be claimed only to the 2,744
extent that qualified tuition and fees are not otherwise deducted 2,745
or excluded for any taxable year from federal or Ohio adjusted 2,746
gross income. The deduction may not be claimed for educational 2,747
66
expenses for which the taxpayer claims a credit under section 2,748
5747.27 of the Revised Code.
(19) Add any reimbursement received during the taxable 2,750
year of any amount the taxpayer deducted under division (A)(18) 2,751
of this section in any previous taxable year to the extent the 2,752
amount is not otherwise included in Ohio adjusted gross income. 2,753
(B) "Business income" means income arising from 2,755
transactions, activities, and sources in the regular course of a 2,756
trade or business and includes income from tangible and 2,757
intangible property if the acquisition, rental, management, and 2,758
disposition of the property constitute integral parts of the 2,759
regular course of a trade or business operation. 2,760
(C) "Nonbusiness income" means all income other than 2,762
business income and may include, but is not limited to, 2,763
compensation, rents and royalties from real or tangible personal 2,764
property, capital gains, interest, dividends and distributions, 2,765
patent or copyright royalties, or lottery winnings, prizes, and 2,766
awards. 2,767
(D) "Compensation" means any form of remuneration paid to 2,769
an employee for personal services. 2,770
(E) "Fiduciary" means a guardian, trustee, executor, 2,772
administrator, receiver, conservator, or any other person acting 2,773
in any fiduciary capacity for any individual, trust, or estate. 2,774
(F) "Fiscal year" means an accounting period of twelve 2,776
months ending on the last day of any month other than December. 2,777
(G) "Individual" means any natural person. 2,779
(H) "Internal Revenue Code" means the "Internal Revenue 2,781
Code of 1986," 100 Stat. 2085, 26 U.S.C.A. 1, as amended. 2,782
(I) "Resident" means: 2,784
(1) An individual who is domiciled in this state, subject 2,786
to section 5747.24 of the Revised Code; 2,787
(2) The estate of a decedent who at the time of death was 2,790
domiciled in this state. The domicile tests of section 5747.24 2,791
of the Revised Code and any election under section 5747.25 of the 2,792
67
Revised Code are not controlling for purposes of division (I)(2) 2,793
of this section.
(J) "Nonresident" means an individual or estate that is 2,795
not a resident. An individual who is a resident for only part of 2,796
a taxable year is a nonresident for the remainder of that taxable 2,797
year. 2,798
(K) "Pass-through entity" has the same meaning as in 2,800
section 5733.04 of the Revised Code. 2,801
(L) "Return" means the notifications and reports required 2,803
to be filed pursuant to this chapter for the purpose of reporting 2,804
the tax due and includes declarations of estimated tax when so 2,805
required. 2,806
(M) "Taxable year" means the calendar year or the 2,808
taxpayer's fiscal year ending during the calendar year, or 2,809
fractional part thereof, upon which the adjusted gross income is 2,810
calculated pursuant to this chapter. 2,811
(N) "Taxpayer" means any person subject to the tax imposed 2,813
by section 5747.02 of the Revised Code or any pass-through entity 2,814
that makes the election under division (D) of section 5747.08 of 2,815
the Revised Code.
(O) "Dependents" means dependents as defined in the 2,817
Internal Revenue Code and as claimed in the taxpayer's federal 2,818
income tax return for the taxable year or which the taxpayer 2,819
would have been permitted to claim had the taxpayer filed a 2,820
federal income tax return. 2,822
(P) "Principal county of employment" means, in the case of 2,824
a nonresident, the county within the state in which a taxpayer 2,825
performs services for an employer or, if those services are 2,826
performed in more than one county, the county in which the major 2,827
portion of the services are performed. 2,828
(Q) As used in sections 5747.50 to 5747.55 of the Revised 2,830
Code:
(1) "Subdivision" means any county, municipal corporation, 2,832
park district, or township. 2,833
68
(2) "Essential local government purposes" includes all 2,835
functions that any subdivision is required by general law to 2,836
exercise, including like functions that are exercised under a 2,837
charter adopted pursuant to the Ohio Constitution. 2,838
(R) "Overpayment" means any amount already paid that 2,840
exceeds the figure determined to be the correct amount of the 2,841
tax. 2,842
(S) "Taxable income" applies to estates only and means 2,844
taxable income as defined and used in the Internal Revenue Code 2,845
adjusted as follows: 2,846
(1) Add interest or dividends on obligations or securities 2,848
of any state or of any political subdivision or authority of any 2,849
state, other than this state and its subdivisions and 2,850
authorities; 2,851
(2) Add interest or dividends on obligations of any 2,853
authority, commission, instrumentality, territory, or possession 2,854
of the United States that are exempt from federal income taxes 2,855
but not from state income taxes; 2,856
(3) Add the amount of personal exemption allowed to the 2,858
estate pursuant to section 642(b) of the Internal Revenue Code; 2,859
(4) Deduct interest or dividends on obligations of the 2,861
United States and its territories and possessions or of any 2,862
authority, commission, or instrumentality of the United States 2,863
that are exempt from state taxes under the laws of the United 2,864
States; 2,865
(5) Deduct the amount of wages and salaries, if any, not 2,867
otherwise allowable as a deduction but that would have been 2,868
allowable as a deduction in computing federal taxable income for 2,869
the taxable year, had the targeted jobs credit allowed under 2,870
sections 38, 51, and 52 of the Internal Revenue Code not been in 2,871
effect; 2,872
(6) Deduct any interest or interest equivalent on public 2,874
obligations and purchase obligations to the extent included in 2,875
federal taxable income; 2,876
69
(7) Add any loss or deduct any gain resulting from sale, 2,878
exchange, or other disposition of public obligations to the 2,879
extent included in federal taxable income; 2,880
(8) Except in the case of the final return of an estate, 2,882
add any amount deducted by the taxpayer on both its Ohio estate 2,883
tax return pursuant to section 5731.14 of the Revised Code, and 2,884
on its federal income tax return in determining either federal 2,885
adjusted gross income or federal taxable income; 2,886
(9)(a) Deduct any amount included in federal taxable 2,888
income solely because the amount represents a reimbursement or 2,889
refund of expenses that in a previous year the decedent had 2,890
deducted as an itemized deduction pursuant to section 63 of the 2,891
Internal Revenue Code and applicable treasury regulations. The 2,893
deduction otherwise allowed under division (S)(9)(a) of this 2,894
section shall be reduced to the extent the reimbursement is 2,895
attributable to an amount the taxpayer or decedent deducted under 2,896
this section in any taxable year. 2,897
(b) Add any amount not otherwise included in Ohio taxable 2,899
income for any taxable year to the extent that the amount is 2,900
attributable to the recovery during the taxable year of any 2,901
amount deducted or excluded in computing federal or Ohio taxable 2,902
income in any taxable year. 2,903
(10) Deduct any portion of the deduction described in 2,905
section 1341(a)(2) of the Internal Revenue Code, for repaying 2,906
previously reported income received under a claim of right, that 2,907
meets both of the following requirements: 2,908
(a) It is allowable for repayment of an item that was 2,910
included in the taxpayer's taxable income or the decedent's 2,911
adjusted gross income for a prior taxable year and did not 2,912
qualify for a credit under division (A) or (B) of section 5747.05 2,913
of the Revised Code for that year. 2,914
(b) It does not otherwise reduce the taxpayer's taxable 2,916
income or the decedent's adjusted gross income for the current or 2,917
any other taxable year. 2,918
70
(11) Add any amount claimed as a credit under section 2,920
5747.059 of the Revised Code to the extent that the amount 2,921
satisfies either of the following: 2,922
(a) The amount was deducted or excluded from the 2,924
computation of the taxpayer's federal taxable income as required 2,925
to be reported for the taxpayer's taxable year under the Internal 2,926
Revenue Code;
(b) The amount resulted in a reduction in the taxpayer's 2,928
federal taxable income as required to be reported for any of the 2,929
taxpayer's taxable years under the Internal Revenue Code. 2,930
(T) "School district income" and "school district income 2,932
tax" have the same meanings as in section 5748.01 of the Revised 2,933
Code. 2,934
(U) As used in divisions (A)(8), (A)(9), (S)(6), and 2,936
(S)(7) of this section, "public obligations," "purchase 2,937
obligations," and "interest or interest equivalent" have the same 2,938
meanings as in section 5709.76 of the Revised Code. 2,939
(V) "Limited liability company" means any limited 2,941
liability company formed under Chapter 1705. of the Revised Code 2,942
or under the laws of any other state. 2,943
(W) "Pass-through entity investor" means any person who, 2,945
during any portion of a taxable year of a pass-through entity, is 2,946
a partner, member, shareholder, or investor in that pass-through 2,947
entity.
(X) "Banking day" has the same meaning as in section 2,949
1304.01 of the Revised Code. 2,950
(Y) "Month" means a calendar month. 2,952
(Z) "Quarter" means the first three months, the second 2,954
three months, the third three months, or the last three months of 2,955
the taxpayer's taxable year.
(AA)(1) "Eligible institution" means a state university or 2,957
state institution of higher education as defined in section 2,958
3345.011 of the Revised Code, or a private, nonprofit college, 2,959
university, or other post-secondary institution located in this 2,960
71
state that possesses a certificate of authorization issued by the 2,961
Ohio board of regents pursuant to Chapter 1713. of the Revised
Code or a certificate of registration issued by the state board 2,962
of proprietary school registration under Chapter 3332. of the 2,963
Revised Code.
(2) "Qualified tuition and fees" means tuition and fees 2,965
imposed by an eligible institution as a condition of enrollment 2,966
or attendance, not exceeding two thousand five hundred dollars in 2,967
each of the individual's first two years of post-secondary 2,968
education. If the individual is a part-time student, "qualified 2,969
tuition and fees" includes tuition and fees paid for the academic
equivalent of the first two years of post-secondary education 2,970
during a maximum of five taxable years, not exceeding a total of 2,971
five thousand dollars. "Qualified tuition and fees" does not 2,972
include:
(a) Expenses for any course or activity involving sports, 2,974
games, or hobbies unless the course or activity is part of the 2,975
individual's degree or diploma program; 2,976
(b) The cost of books, room and board, student activity 2,978
fees, athletic fees, insurance expenses, or other expenses 2,979
unrelated to the individual's academic course of instruction; 2,980
(c) Tuition, fees, or other expenses paid or reimbursed 2,982
through an employer, scholarship, grant in aid, or other 2,983
educational benefit program.
(BB) Any term used in this chapter that is not otherwise 2,985
defined in this section and that is not used in a comparable 2,986
context in the Internal Revenue Code and other statutes of the 2,987
United States relating to federal income taxes has the same 2,988
meaning as in section 5733.40 of the Revised Code. 2,989
Section 4. That all existing versions of section 5747.01 2,991
of the Revised Code are hereby repealed. 2,992
Section 5. Sections 3 and 4 of this act shall take effect 2,994
July 1, 2000. 2,995
Section 6. Section 5747.01 of the Revised Code, as amended 2,996
72
by this act, and section 5747.70 of the Revised Code, as enacted 2,997
by this act, apply to tax years beginning on and after January 1, 2,998
2000.
Section 7. Section 5747.01 of the Revised Code is 3,000
presented in Section 1 of this act as a composite of the section 3,002
as amended by both Am. Sub. H.B. 4 and Am. Sub. H.B. 282 of the 3,003
123rd General Assembly, with the new language of neither of the 3,004
acts shown in capital letters. This is in recognition of the 3,005
principle stated in division (B) of section 1.52 of the Revised 3,006
Code that such amendments are to be harmonized where not 3,007
substantively irreconcilable and constitutes a legislative 3,008
finding that such is the resulting version in effect prior to the 3,009
effective date of this act.