As Passed by the House 1
123rd General Assembly 4
Regular Session Am. 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-CALLENDER-ROMAN-TIBERI-SULZER-WOMER BENJAMIN-TERWILLEGER- 13
CORBIN-WILLAMOWSKI-VAN VYVEN-JONES-CATES-FORD-DAMSCHRODER- 14
FLANNERY-CLANCY-WINKLER-HOOPS-PATTON-PERRY-WIDENER-HARRIS-METZGER- 15
BUEHRER-WILSON-SYKES-R. MILLER-HOLLISTER-SCHURING-METTLER-SMITH- 16
KRUPINSKI-DePIERO-J. BEATTY-DISTEL-HARTNETT-JOLIVETTE-O'BRIEN- 17
COUGHLIN-GARDNER-HOUSEHOLDER-BUCHY-YOUNG-MEAD-REDFERN-LOGAN- 18
SULLIVAN-GOODING-BARRETT-MOTTLEY-BRITTON 19
_________________________________________________________________ 20
A B I L L
To amend sections 3334.01, 3334.02, 3334.08, 22
3334.10, 3334.11, 3334.12, 3334.15, 3366.01, 23
3366.03, 3366.04, and 5747.01 and to enact
sections 3333.37, 3333.371, 3333.372, 3333.373, 24
3333.374, 3333.375, 3334.18, 3334.19, 3334.20, 25
3334.21, and 5747.70 of the Revised Code to
require the Ohio tuition trust authority to 26
establish a variable college savings program, to 27
make other changes in the Ohio College Savings
Program, to expand the scope of education loans 28
eligible to be financed by obligations issued by 29
the Treasurer of State, to authorize the "Ohio
Outstanding Scholarship" and "Ohio Priority Needs 30
Fellowship" Programs to be administered by the 31
Ohio Board of Regents, and to maintain the
provisions of this act on and after July 1, 2000, 32
by amending the version of section 5747.01 of the 33
2
Revised Code that takes effect on that date. 34
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO: 36
Section 1. That sections 3334.01, 3334.02, 3334.08, 38
3334.10, 3334.11, 3334.12, 3334.15, 3366.01, 3366.03, 3366.04, 39
and 5747.01 be amended and sections 3333.37, 3333.371, 3333.372, 40
3333.373, 3333.374, 3333.375, 3334.18, 3334.19, 3334.20, 3334.21, 42
and 5747.70 of the Revised Code be enacted to read as follows: 43
Sec. 3333.37. AS USED IN SECTIONS 3333.37 TO 3333.375 OF 45
THE REVISED CODE, THE FOLLOWING WORDS AND TERMS HAVE THE 46
FOLLOWING MEANINGS UNLESS THE CONTEXT INDICATES A DIFFERENT 47
MEANING OR INTENT:
(A) "COST OF ATTENDANCE" MEANS ALL COSTS OF A STUDENT 49
INCURRED IN CONNECTION WITH A PROGRAM OF STUDY AT AN ELIGIBLE 50
INSTITUTION, AS DETERMINED BY THE INSTITUTION, INCLUDING TUITION; 51
INSTRUCTIONAL FEES; ROOM AND BOARD; BOOKS, COMPUTERS, AND 52
SUPPLIES; AND OTHER RELATED FEES, CHARGES, AND EXPENSES.
(B) "ELIGIBLE INSTITUTION" MEANS EITHER OF THE FOLLOWING: 54
(1) A STATE-ASSISTED POST-SECONDARY EDUCATIONAL 56
INSTITUTION WITHIN THE STATE; 57
(2) A NONPROFIT INSTITUTION OF HIGHER EDUCATION WITHIN THE 59
STATE THAT HOLDS A CERTIFICATE OF AUTHORIZATION FROM THE OHIO 60
BOARD OF REGENTS PURSUANT TO CHAPTER 1713. OF THE REVISED CODE, 61
THAT IS ACCREDITED BY THE APPROPRIATE REGIONAL AND, WHEN 62
APPROPRIATE, PROFESSIONAL ACCREDITING ASSOCIATIONS WITHIN WHOSE 63
JURSIDICTION IT FALLS, IS AUTHORIZED TO GRANT A BACHELOR'S DEGREE 64
OR HIGHER, AND SATISFIES OTHER CONDITIONS AS SET FORTH IN THE 65
POLICY GUIDELINES.
(C) "ELIGIBLE STUDENT" MEANS EITHER OF THE FOLLOWING: 67
(1) AN UNDERGRADUATE STUDENT WHO MEETS ALL OF THE 69
FOLLOWING:
(a) IS A RESIDENT OF THIS STATE; 71
(b) HAS GRADUATED FROM ANY OHIO SECONDARY SCHOOL FOR WHICH 74
3
THE STATE BOARD OF EDUCATION PRESCRIBES MINIMUM STANDARDS IN
ACCORDANCE WITH SECTION 3301.07 OF THE REVISED CODE; 75
(c) IS ATTENDING AND IN GOOD STANDING, OR HAS BEEN 77
ACCEPTED FOR ATTENDANCE, AT ANY ELIGIBLE INSTITUTION AS A 78
FULL-TIME STUDENT TO PURSUE A BACHELOR'S DEGREE. 79
(2) A GRADUATE STUDENT WHO IS A RESIDENT OF THIS STATE, 82
AND IS ATTENDING AND IN GOOD STANDING, OR HAS BEEN ACCEPTED FOR 83
ATTENDANCE, AT ANY ELIGIBLE INSTITUTION.
(D) "FELLOWSHIP" OR "FELLOWSHIP PROGRAM" MEANS THE OHIO 85
PRIORITY NEEDS FELLOWSHIP CREATED BY SECTIONS 3333.37 TO 3333.375 86
OF THE REVISED CODE. 87
(E) "FULL-TIME STUDENT" HAS THE MEANING AS DEFINED BY RULE 89
OF THE OHIO BOARD OF REGENTS. 90
(F) "OHIO OUTSTANDING SCHOLAR" MEANS A STUDENT WHO IS THE 92
RECIPIENT OF A SCHOLARSHIP UNDER SECTIONS 3333.37 TO 3333.375 OF 93
THE REVISED CODE. 94
(G) "POLICY GUIDELINES" MEANS THE RULES ADOPTED BY THE 97
OHIO BOARD OF REGENTS PURSUANT TO SECTION 3333.374 OF THE REVISED 98
CODE.
(H) "PRIORITY NEEDS FELLOW" MEANS A STUDENT WHO IS THE 100
RECIPIENT OF A FELLOWSHIP UNDER SECTIONS 3333.37 TO 3333.375 OF 101
THE REVISED CODE. 102
(I) "PRIORITY NEEDS FIELD OF STUDY" MEANS THOSE ACADEMIC 104
MAJORS AND DISCIPLINES AS DETERMINED BY THE OHIO BOARD OF REGENTS 105
THAT SUPPORT THE PURPOSES AND INTENT OF SECTIONS 3333.37 TO 106
3333.375 OF THE REVISED CODE AS DESCRIBED IN SECTION 3333.371 OF 107
THE REVISED CODE. 108
(J) "SCHOLARSHIP" OR "SCHOLARSHIP PROGRAM" MEANS THE OHIO 111
OUTSTANDING SCHOLARSHIP CREATED BY SECTIONS 3333.37 TO 3333.375
OF THE REVISED CODE. 112
Sec. 3333.371. THE PURPOSES OF SECTIONS 3333.37 TO 114
3333.375 OF THE REVISED CODE ARE TO CREATE BOTH OF THE FOLLOWING: 115
(A) A SCHOLARSHIP PROGRAM FOR UNDERGRADUATE STUDENTS WHO 117
ARE RESIDENTS OF THIS STATE AND ARE PURSUING A BACCALAUREATE 119
4
DEGREE IN ANY FIELD OF STUDY TO ENCOURAGE THE RETENTION OF OHIO 120
OUTSTANDING STUDENTS;
(B) A FELLOWSHIP PROGRAM FOR GRADUATE STUDENTS WHO ARE 122
RESIDENTS OF THIS STATE FOR ATTENDANCE AT OHIO INSTITUTIONS OF 124
HIGHER EDUCATION TO ENCOURAGE SUCH STUDENTS TO PURSUE FIELDS OF 125
STUDY THAT ARE DETERMINED TO BE A PRIORITY FOR THE STATE IN
ADVANCING ITS ECONOMIC, TECHNOLOGICAL, AND ACADEMIC INTERESTS. 126
Sec. 3333.372. (A) THERE IS HEREBY AUTHORIZED THE "OHIO 128
OUTSTANDING SCHOLARSHIP" AND THE "OHIO PRIORITY NEEDS FELLOWSHIP" 129
PROGRAMS, WHICH SHALL BE ESTABLISHED AND ADMINISTERED BY THE OHIO 130
BOARD OF REGENTS FOR ELIGIBLE STUDENTS. THE PROGRAMS SHALL 131
PROVIDE SCHOLARSHIPS TO ELIGIBLE UNDERGRADUATE STUDENTS AND 133
FELLOWSHIPS TO ELIGIBLE GRADUATE STUDENTS, EQUAL TO THE ANNUAL 134
COST OF ATTENDANCE AT ELIGIBLE INSTITUTIONS, TO PURSUE
BACCALAUREATE DEGREES AND POST-BACCALAUREATE DEGREES IN PRIORITY 136
NEEDS FIELD OF STUDY CONSISTENT WITH SECTION 3333.371 OF THE 137
REVISED CODE.
(B) THE SCHOLARSHIP AND FELLOWSHIP PROGRAMS CREATED UNDER 139
SECTIONS 3333.37 TO 3333.375 OF THE REVISED CODE AND ANY 140
NECESSARY ADMINISTRATIVE EXPENSES SHALL BE FUNDED SOLELY FROM THE 141
OHIO OUTSTANDING SCHOLARSHIP AND THE OHIO PRIORITY NEEDS 142
FELLOWSHIP PROGRAMS PAYMENT FUNDS ESTABLISHED PURSUANT TO SECTION 143
3333.375 OF THE REVISED CODE. 144
(C) THE SCHOLARSHIPS SHALL BE RENEWABLE FOR EACH OF THREE 146
ADDITIONAL YEARS FOR UNDERGRADUATE STUDY, AND THE FELLOWSHIPS 148
SHALL BE RENEWABLE FOR EACH OF TWO ADDITIONAL YEARS FOR GRADUATE 149
STUDY, PROVIDED THE OHIO OUTSTANDING SCHOLAR OR PRIORITY NEEDS 150
FELLOW REMAINS AN ELIGIBLE STUDENT AT AN ELIGIBLE INSTITUTION. 151
Sec. 3333.373. (A) THE BOARD OF REGENTS SHALL ESTABLISH 153
THE RULES ADVISORY COMMITTEE, WHICH SHALL CONSIST OF THE 154
CHANCELLOR OF THE OHIO BOARD OF REGENTS OR THE CHANCELLOR'S 155
DESIGNEE, THE TREASURER OF STATE OR THE TREASURER OF STATE'S 156
DESIGNEE, THE DIRECTOR OF DEVELOPMENT OR THE DIRECTOR'S DESIGNEE, 157
ONE STATE SENATOR APPOINTED BY THE PRESIDENT OF THE SENATE, ONE 158
5
STATE REPRESENTATIVE APPOINTED BY THE SPEAKER OF THE HOUSE OF
REPRESENTATIVES, AND TWO PUBLIC MEMBERS APPOINTED BY THE 159
CHANCELLOR REPRESENTING THE INTERESTS OF THE STATE-ASSISTED 160
ELIGIBLE INSTITUTIONS AND PRIVATE NONPROFIT ELIGIBLE 161
INSTITUTIONS, RESPECTIVELY.
(B) THE COMMITTEE, WITHIN ONE HUNDRED TWENTY DAYS AFTER 163
THE EFFECTIVE DATE OF THIS SECTION, SHALL PROVIDE RECOMMENDATIONS 164
TO THE OHIO BOARD OF REGENTS AS TO SUCH RULES, CRITERIA, AND 165
GUIDELINES AS ARE NECESSARY AND APPROPRIATE TO IMPLEMENT THE 166
SCHOLARSHIP AND FELLOWSHIP PROGRAMS CREATED BY SECTIONS 3333.37 167
TO 3333.375 OF THE REVISED CODE. 168
(C) THE COMMITTEE SHALL MEET AT LEAST ANNUALLY TO REVIEW 170
THE SCHOLARSHIP AND FELLOWSHIP PROGRAMS GUIDELINES; MAKE 171
RECOMMENDATIONS TO AMEND, RESCIND, OR MODIFY THE POLICY 172
GUIDELINES; AND APPROVE SCHOLARSHIP AND FELLOWSHIP AWARDS TO 173
ELIGIBLE STUDENTS.
(D) SECTION 101.84 OF THE REVISED CODE DOES NOT APPLY TO 176
THIS SECTION.
Sec. 3333.374. (A) AFTER RECEIPT OF RECOMMENDATIONS FROM 178
THE RULES ADVISORY COMMITTEE OR IF NO RECOMMENDATIONS ARE 179
RECEIVED, THE OHIO BOARD OF REGENTS, NOT LATER THAN ONE HUNDRED 180
EIGHTY DAYS AFTER THE EFFECTIVE DATE OF THIS SECTION AND WITH THE 181
APPROVAL OF THE TREASURER OF STATE, SHALL ADOPT RULES, IN 182
ACCORDANCE WITH CHAPTER 119. OF THE REVISED CODE, ESTABLISHING 183
SUCH POLICY GUIDELINES AS THE BOARD CONSIDERS NECESSARY AND 184
APPROPRIATE TO PROVIDE FOR THE IMPLEMENTATION OF THE SCHOLARSHIP 185
AND FELLOWSHIP PROGRAMS.
(B) NOTHING IN THIS SECTION OR SECTION 3333.373 OF THE 188
REVISED CODE SHALL PREVENT THE BOARD, WITH THE APPROVAL OF THE 189
TREASURER OF STATE, FROM AMENDING OR RESCINDING RULES ADOPTED
PURSUANT TO DIVISION (A) OF THIS SECTION, OR FROM ADOPTING NEW 190
RULES, IN ACCORDANCE WITH CHAPTER 119. OF THE REVISED CODE, FROM 192
TIME TO TIME AS ARE NECESSARY TO FURTHER THE PURPOSES OF SECTIONS
3333.37 TO 3333.375 OF THE REVISED CODE. 193
6
Sec. 3333.375. (A)(1) THERE IS HEREBY CREATED THE OHIO 195
OUTSTANDING SCHOLARSHIP AND THE OHIO PRIORITY NEEDS FELLOWSHIP 196
PROGRAMS PAYMENT FUNDS, WHICH SHALL BE IN THE CUSTODY OF THE 197
TREASURER OF STATE, BUT SHALL NOT BE A PART OF THE STATE 198
TREASURY.
(2) THE PAYMENT FUNDS SHALL CONSIST SOLELY OF ALL MONEYS 200
RETURNED TO THE TREASURER OF STATE, AS ISSUER OF CERTAIN 201
TAX-EXEMPT STUDENT LOAN REVENUE BONDS, FROM ALL INDENTURES OF 202
TRUST, BOTH PRESENTLY EXISTING AND FUTURE, CREATED AS A RESULT OF 203
TAX-EXEMPT STUDENT LOAN REVENUE BONDS ISSUED UNDER CHAPTER 3366. 204
OF THE REVISED CODE, AND ANY MONEYS EARNED FROM ALLOWABLE 205
INVESTMENTS OF THE PAYMENT FUNDS UNDER DIVISION (B) OF THIS 206
SECTION.
(3) THE PAYMENT FUNDS SHALL BE USED SOLELY FOR SCHOLARSHIP 208
AND FELLOWSHIPS AWARDED UNDER SECTIONS 3333.37 TO 3333.375 OF THE 209
REVISED CODE BY THE OHIO BOARD OF REGENTS AND FOR ANY NECESSARY 210
ADMINISTRATIVE EXPENSES INCURRED BY THE BOARD IN ADMINISTERING 211
THE SCHOLARSHIP AND FELLOWSHIP PROGRAMS. 212
(B) THE TREASURER OF STATE MAY INVEST ANY MONEYS IN THE 214
PAYMENT FUNDS NOT CURRENTLY NEEDED FOR SCHOLARSHIP AND FELLOWSHIP 215
PAYMENTS IN ANY KIND OF INVESTMENTS IN WHICH MONEYS OF THE PUBLIC 216
EMPLOYEES RETIREMENT SYSTEM MAY BE INVESTED UNDER CHAPTER 145. OF 217
THE REVISED CODE.
(C)(1) THE INSTRUMENTS OF TITLE OF ALL INVESTMENTS SHALL 219
BE DELIVERED TO THE TREASURER OF STATE OR TO A QUALIFIED TRUSTEE 220
DESIGNATED BY THE TREASURER OF STATE AS PROVIDED IN SECTION 221
135.18 OF THE REVISED CODE. 222
(2) THE TREASURER OF STATE SHALL COLLECT BOTH PRINCIPAL 224
AND INVESTMENT EARNINGS ON ALL INVESTMENTS AS THEY BECOME DUE AND 225
PAY THEM INTO THE PAYMENT FUNDS. 226
(3) ALL DEPOSITS TO THE PAYMENT FUNDS SHALL BE MADE IN 228
PUBLIC DEPOSITORIES OF THIS STATE AND SECURED AS PROVIDED IN 229
SECTION 135.18 OF THE REVISED CODE. 230
(D) ON OR BEFORE MARCH 1, 2001, AND ON OR BEFORE THE FIRST 233
7
DAY OF MARCH IN EACH SUBSEQUENT YEAR, THE TREASURER OF STATE
SHALL PROVIDE TO THE CHANCELLOR OF THE OHIO BOARD OF REGENTS A 234
STATEMENT INDICATING THE MONEYS IN THE OHIO OUTSTANDING 235
SCHOLARSHIP AND THE OHIO PRIORITY NEEDS FELLOWSHIP PROGRAMS 236
PAYMENT FUNDS THAT ARE AVAILABLE FOR THE UPCOMING ACADEMIC YEAR 237
TO AWARD SCHOLARSHIPS AND FELLOWSHIPS UNDER SECTIONS 3333.37 TO 238
3333.375 OF THE REVISED CODE. 239
Sec. 3334.01. As used in this chapter: 248
(A) "Aggregate original principal amount" means the 250
aggregate of the initial offering prices to the public of college 251
savings bonds, exclusive of accrued interest, if any. "Aggregate 252
original principal amount" does not mean the aggregate accreted 253
amount payable at maturity or redemption of such bonds. 254
(B) "Beneficiary" means an: 256
(1) AN individual designated by the purchaser under a 258
tuition payment contract or through a scholarship program as the 260
individual on whose behalf tuition credits purchased under the 261
contract or awarded through the scholarship program will be
applied toward the payment of undergraduate, graduate, or 262
professional tuition; OR 263
(2) AN INDIVIDUAL DESIGNATED BY THE CONTRIBUTOR UNDER A 265
VARIABLE COLLEGE SAVINGS PROGRAM CONTRACT AS THE INDIVIDUAL WHOSE 266
TUITION AND OTHER HIGHER EDUCATION EXPENSES WILL BE PAID FROM A 267
VARIABLE COLLEGE SAVINGS PROGRAM ACCOUNT. 268
(C) "Capital appreciation bond" means a bond for which the 270
following is true:
(1) The principal amount is less than the amount payable 272
at maturity or early redemption; and 273
(2) No interest is payable on a current basis. 275
(D) "Tuition credit" means a credit of the Ohio tuition 277
trust authority purchased under section 3334.09 of the Revised 278
Code.
(E) "College savings bonds" means revenue and other 280
obligations issued on behalf of the state or any agency or 281
8
issuing authority thereof as a zero-coupon or capital 282
appreciation bond, and designated as college savings bonds as 283
provided in this chapter. "College savings bond issue" means any 284
issue of bonds of which any part has been designated as college 285
savings bonds. 286
(F) "Institution of higher education" means a state 288
institution of higher education, a private college, university, 290
or other postsecondary institution located in this state that
possesses a certificate of authorization issued by the Ohio board 291
of regents pursuant to Chapter 1713. of the Revised Code or a 292
certificate of registration issued by the state board of 293
proprietary school registration under Chapter 3332. of the 294
Revised Code, or an accredited college, university, or other 295
postsecondary institution located outside this state that is 296
accredited by an accrediting organization or professional 297
association recognized by the authority. To be considered an 298
institution of higher education, an institution shall meet the 299
definition of an eligible educational institution under section 300
529 of the Internal Revenue Code.
(G) "Issuing authority" means any authority, commission, 302
body, agency, or individual empowered by the Ohio Constitution or 304
the Revised Code to issue bonds or any other debt obligation of 305
the state or any agency or department thereof. "Issuer" means
the issuing authority or, if so designated under division (B) of 306
section 3334.04 of the Revised Code, the treasurer of state. 307
(H) "Tuition" means the charges imposed to attend an 309
institution of higher education as an undergraduate, graduate, or 310
professional student and all fees required as a condition of 311
enrollment, as determined by the Ohio tuition trust authority. 312
"Tuition" does not include fees charged to out-of-state residents 313
by state institutions of higher education, laboratory fees, room 314
and board, or other similar fees and charges. 315
(I) "Weighted average tuition" means the tuition cost 317
resulting from the following calculation: 318
9
(1) Add the products of the annual undergraduate tuition 320
CHARGED TO OHIO RESIDENTS at each four-year state university 322
multiplied by that institution's total number of undergraduate 323
fiscal year equated students; and 324
(2) Divide the gross total of the products from division 326
(J)(I)(1) of this section by the total number of undergraduate 327
fiscal year equated students attending four-year state 328
universities. 329
(J) "Zero-coupon bond" means a bond which has a stated 331
interest rate of zero per cent and on which no interest is 332
payable until the maturity or early redemption of the bond, and 333
is offered at a substantial discount from its original stated 334
principal amount. 335
(K) "State institution of higher education" includes the 337
state universities listed in section 3345.011 of the Revised 338
Code, community colleges created pursuant to Chapter 3354. of the 339
Revised Code, university branches created pursuant to Chapter 340
3355. of the Revised Code, technical colleges created pursuant to 341
Chapter 3357. of the Revised Code, state community colleges 342
created pursuant to Chapter 3358. of the Revised Code, the 343
medical college of Ohio at Toledo, and the northeastern Ohio 344
universities college of medicine.
(L) "Four-year state university" means those state 346
universities listed in section 3345.011 of the Revised Code. 347
(M) "Principal amount" refers to the initial offering 349
price to the public of an obligation, exclusive of the accrued 350
interest, if any. "Principal amount" does not refer to the 351
aggregate accreted amount payable at maturity or redemption of an 352
obligation. 353
(N) "Scholarship program" means a program registered with 355
the Ohio tuition trust authority pursuant to section 3334.18 356
3334.17 of the Revised Code. 357
(O) "Internal Revenue Code" means the "Internal Revenue 360
Code of 1986," 100 Stat. 2085, 26 U.S.C.A. 1 et seq., as amended. 361
10
(P) "Other higher education expenses" means room and board 364
and books, supplies, equipment, and nontuition-related fees 365
associated with the cost of attendance of a beneficiary at an 366
institution of higher education, but only to the extent that such 367
expenses meet the definition of "qualified higher education 368
expenses" under section 529 of the Internal Revenue Code. "Other 369
higher education expenses" does not include tuition as defined in 370
division (H) of this section. 371
(Q) "Purchaser" means the person signing the tuition 374
payment contract, who controls the account and acquires tuition 375
credits for an account under the terms and conditions of the 376
contract.
(R) "CONTRIBUTOR" MEANS A PERSON WHO SIGNS A VARIABLE 378
COLLEGE SAVINGS PROGRAM CONTRACT WITH THE OHIO TUITION TRUST 379
AUTHORITY AND CONTRIBUTES TO AND OWNS THE ACCOUNT CREATED UNDER 380
THE CONTRACT.
Sec. 3334.02. (A) In order to help make higher education 389
affordable and accessible to all citizens of Ohio, to maintain 390
state institutions of higher education by helping to provide a 391
stable financial base to these institutions, to provide the 392
citizens of Ohio with financing assistance for higher education 393
and protection against rising tuition costs, to encourage saving 394
to enhance the ability of citizens of Ohio to obtain financial 395
access to institutions of higher education, to encourage 396
elementary and secondary students in this state to achieve 397
academic excellence, and to promote a well-educated and 398
financially secure population to the ultimate benefit of all 399
citizens of the state of Ohio, there is hereby created the Ohio 400
college savings program. The program shall consist of the 401
issuance of college savings bonds and the sale of tuition credits 402
and, if offered, supplemental credits. 403
(B) The provisions of Chapter 1707. of the Revised Code 405
shall not apply to tuition credits or any agreement or 407
transaction related thereto.
11
(C) TO PROVIDE THE CITIZENS OF OHIO WITH A CHOICE OF 409
TAX-ADVANTAGED COLLEGE SAVINGS PROGRAMS AND THE OPPORTUNITY TO 410
PARTICIPATE IN MORE THAN ONE TYPE OF COLLEGE SAVINGS PROGRAM AT A 412
TIME, THE OHIO TUITION TRUST AUTHORITY SHALL ESTABLISH AND 413
ADMINISTER A VARIABLE COLLEGE SAVINGS PROGRAM AS A QUALIFIED 414
STATE TUITION PROGRAM UNDER SECTION 529 OF THE INTERNAL REVENUE 415
CODE. THE PROGRAM SHALL ALLOW CONTRIBUTORS TO MAKE CASH 416
CONTRIBUTIONS TO VARIABLE COLLEGE SAVINGS PROGRAM ACCOUNTS 417
CREATED FOR THE PURPOSE OF PAYING FUTURE TUITION AND OTHER HIGHER 418
EDUCATION EXPENSES AND PROVIDING VARIABLE RATES OF RETURN ON 419
CONTRIBUTIONS.
(D) A PERSON MAY PARTICIPATE SIMULTANEOUSLY IN BOTH THE 422
OHIO COLLEGE SAVINGS PROGRAM AND THE VARIABLE COLLEGE SAVINGS 423
PROGRAM.
Sec. 3334.08. (A) In SUBJECT TO DIVISION (B) OF THIS 432
SECTION, IN addition to any other powers conferred by this 434
chapter, the Ohio tuition trust authority may do any of the 435
following:
(1) Impose reasonable residency requirements for 437
beneficiaries of tuition credits; 438
(2) Impose reasonable limits on the number of tuition 440
credit participants; 441
(3) Impose and collect administrative fees and charges in 443
connection with any transaction under this chapter; 444
(4) Purchase insurance from insurers licensed to do 446
business in this state providing for coverage against any loss in 447
connection with the authority's property, assets, or activities 448
or to further ensure the value of tuition credits; 449
(5) Indemnify or purchase policies of insurance on behalf 451
of members, officers, and employees of the authority from 452
insurers licensed to do business in this state providing for 453
coverage for any liability incurred in connection with any civil 454
action, demand, or claim against a director, officer, or employee 455
by reason of an act or omission by the director, officer, or 456
12
employee that was not manifestly outside the scope of the 457
employment or official duties of the director, officer, or 458
employee or with malicious purpose, in bad faith, or in a wanton 460
or reckless manner;
(6) Make, execute, and deliver contracts, conveyances, and 462
other instruments necessary to the exercise and discharge of the 463
powers and duties of the authority; 464
(7) Promote, advertise, and publicize the OHIO college 466
savings program AND THE VARIABLE COLLEGE SAVINGS PROGRAM; 468
(8) Adopt rules under section 111.15 of the Revised Code 470
for the implementation of the OHIO college savings program; 471
(9) Contract, for the provision of all or part of the 473
services necessary for the management and operation of the OHIO 475
college savings program AND THE VARIABLE COLLEGE SAVINGS PROGRAM, 476
with a bank, trust company, savings and loan association, 478
insurance company, or licensed dealer in securities if the bank, 479
company, association, or dealer is authorized to do business in 480
this state and information about the contract is filed with the 481
controlling board pursuant to division (D)(6) of section 127.16 482
of the Revised Code;
(10) Contract for other services, or for goods, needed by 484
the authority in the conduct of its business, including but not 485
limited to credit card services; 486
(11) Employ an executive director and other personnel as 488
necessary to carry out its responsibilities under this chapter, 489
and fix the compensation of these persons. All employees of the 490
authority shall be in the unclassified civil service and shall be 491
eligible for membership in the public employees retirement 492
system. 493
(12) Contract with financial consultants, actuaries, 495
auditors, and other consultants as necessary to carry out its 496
responsibilities under this chapter; 497
(13) Enter into agreements with any agency of the state or 499
its political subdivisions or with private employers under which 500
13
an employee may agree to have a designated amount deducted in 501
each payroll period from the wages or salary due the employee for 502
the purpose of purchasing tuition credits pursuant to a tuition 503
payment contract OR MAKING CONTRIBUTIONS PURSUANT TO A VARIABLE 504
COLLEGE SAVINGS PROGRAM CONTRACT; 505
(14) Enter into an agreement with the treasurer of state 507
under which the treasurer of state will receive, and credit to 508
the Ohio tuition trust fund OR VARIABLE COLLEGE SAVINGS PROGRAM 509
FUND, from any bank or savings and loan association authorized to 511
do business in this state, amounts that a depositor of the bank 512
or association authorizes the bank or association to withdraw 513
periodically from the depositor's account for the purpose of 515
purchasing tuition credits pursuant to a tuition payment contract 516
OR MAKING CONTRIBUTIONS PURSUANT TO A VARIABLE COLLEGE SAVINGS 517
PROGRAM CONTRACT;
(15) Solicit and accept gifts, grants, and loans from any 519
person or governmental agency and participate in any governmental 520
program; 521
(16) Impose limits on the number of credits which may be 524
purchased on behalf of or assigned or awarded to any beneficiary 525
AND ON THE TOTAL AMOUNT OF CONTRIBUTIONS THAT MAY BE MADE ON 526
BEHALF OF A BENEFICIARY;
(17) Impose restrictions on the substitution of another 528
individual for the original beneficiary UNDER THE OHIO COLLEGE 529
SAVINGS PROGRAM; 530
(18) Impose a limit on the age of a beneficiary, above 532
which tuition credits may not be purchased on behalf of that 534
beneficiary; 535
(19) Enter into a cooperative agreement with the treasurer 537
of state to provide for the direct disbursement of payments under 538
tuition payment OR VARIABLE COLLEGE SAVINGS PROGRAM contracts; 539
(20) Determine the other higher education expenses for 541
which tuition credits OR CONTRIBUTIONS may be used; 542
(21) Terminate any prepaid tuition PAYMENT OR VARIABLE 544
14
COLLEGE SAVINGS PROGRAM contract if no purchases OR CONTRIBUTIONS 546
are made for a period of three years or more and there are fewer 548
than a total of five tuition units or tuition credits OR LESS
THAN A DOLLAR AMOUNT SET BY RULE on account, provided that notice 550
of a possible termination shall be provided in advance, 551
explaining any options to prevent termination, and a reasonable 552
amount of time shall be provided within which to act to prevent a 553
termination;
(22) MAINTAIN A SEPARATE ACCOUNT FOR EACH TUITION PAYMENT 555
OR VARIABLE COLLEGE SAVINGS PROGRAM CONTRACT; 556
(23) Perform all acts necessary and proper to carry out 558
the duties and responsibilities of the authority pursuant to this 559
chapter. 560
(B) THE AUTHORITY SHALL ADOPT RULES UNDER SECTION 111.15 563
OF THE REVISED CODE FOR THE IMPLEMENTATION AND ADMINISTRATION OF 565
THE VARIABLE COLLEGE SAVINGS PROGRAM. THE RULES SHALL PROVIDE 566
TAXPAYERS WITH THE MAXIMUM TAX ADVANTAGES AND FLEXIBILITY
CONSISTENT WITH SECTION 529 OF THE INTERNAL REVENUE CODE AND 568
REGULATIONS ADOPTED THEREUNDER WITH REGARD TO DISPOSITION OF 570
CONTRIBUTIONS AND EARNINGS, DESIGNATION OF BENEFICIARIES, AND 571
ROLLOVER OF ACCOUNT ASSETS TO OTHER PROGRAMS. 572
(C) Except as otherwise specified in this chapter, the 574
provisions of Chapters 123., 125., and 4117. of the Revised Code 575
shall not apply to the authority. The department of 576
administrative services shall, upon the request of the authority, 577
act as the authority's agent for the purchase of equipment, 578
supplies, insurance, or services, or the performance of 579
administrative services pursuant to Chapter 125. of the Revised 580
Code. 581
Sec. 3334.10. Divisions (A) and, (B), (C), AND (D) of this 591
section do not apply to scholarship programs established under 592
section 3334.17 of the Revised Code.
(A) Unless otherwise provided for in the contract, a 595
tuition payment contract may be terminated by the purchaser under 596
15
any of the following circumstances upon the written request of 597
the purchaser to the authority: 598
(1) Upon the death or permanent disability of the 600
beneficiary;
(2) Upon notification to the Ohio tuition trust authority 602
in writing that the beneficiary is age eighteen or older, has 603
decided not to attend an institution of higher education, and 604
requests that the tuition payment contract be terminated; 605
(3) Upon the beneficiary's completion of the degree 607
requirements at an institution of higher education; 608
(4) Upon the rollover of all contributions to AMOUNTS IN a 611
tuition credit account to the prepaid tuition plan of AN 613
EQUIVALENT ACCOUNT IN another state; 614
(5) Upon the occurrence of other circumstances determined 616
by the authority to be grounds for termination. 617
(B) The authority shall determine the method and schedule 619
for payment of refunds upon termination of a tuition payment 620
contract. 621
(1) In cases described by division (A)(2) or (3) of this 623
section, the amount of the refund shall be equal to ninety-nine 624
one-hundredths of NOT LESS THAN one per cent of the weighted 625
average tuition in the academic year the contract REFUND is 627
terminated PAID, multiplied by the number of tuition credits 629
purchased and not used, minus any reasonable charges and fees
provided for by the authority, or such other lesser sum as shall 630
be determined by the authority but only to the extent that such a 631
lesser sum is necessary to meet the refund penalty requirements 632
for qualified state tuition programs under section 529 of the 633
Internal Revenue Code. 634
(2) In cases described by division (A)(1) of this section, 636
the amount of the refund shall be equal to the greater of the 637
following:
(a) One per cent of the weighted average tuition in the 639
academic year the contract REFUND is terminated PAID, multiplied 640
16
by the number of tuition credits purchased and not used; 642
(b) The total purchase price of all tuition credits 644
purchased for the beneficiary and not used. 645
(3) In cases described by division (A)(5) of this section, 647
the amount of the refund shall be either of the following as 648
determined by the authority: 649
(a) The refund provided by division (B)(1) of this 651
section;
(b) The refund provided by division (B)(2) of this 653
section, or such other lesser sum as shall be determined by the 655
authority but only to the extent that such a lesser sum is 656
necessary to meet the refund penalty requirements for qualified 657
state tuition programs under section 529 of the Internal Revenue 658
Code.
(C) UNLESS OTHERWISE PROVIDED FOR IN THE CONTRACT, A 661
VARIABLE COLLEGE SAVINGS PROGRAM ACCOUNT MAY BE TERMINATED BY THE 662
CONTRIBUTOR FOR ANY REASON UPON THE WRITTEN REQUEST OF THE 663
CONTRIBUTOR TO THE AUTHORITY. TERMINATION OF A VARIABLE COLLEGE 664
SAVINGS PROGRAM ACCOUNT SHALL OCCUR NO EARLIER THAN A MATURITY 665
PERIOD SET BY THE AUTHORITY AFTER THE FIRST CONTRIBUTION IS MADE 666
TO THE ACCOUNT.
(D) THE AUTHORITY SHALL DETERMINE THE METHOD AND SCHEDULE 668
FOR PAYMENT OF REFUNDS UPON TERMINATION OF A VARIABLE SAVINGS 669
PROGRAM ACCOUNT. 670
(1) THE CONTRIBUTOR UNDER A VARIABLE SAVINGS PROGRAM 672
CONTRACT MAY RECEIVE A REFUND OF THE BALANCE IN AN ACCOUNT, LESS 673
ANY ADMINISTRATIVE FEES, IF THE ACCOUNT IS TERMINATED UPON THE 674
DEATH OR PERMANENT DISABILITY OF THE BENEFICIARY OR, TO THE 675
EXTENT ALLOWED UNDER RULES OF THE AUTHORITY, UPON THE ROLLOVER OF 676
ALL AMOUNTS IN A VARIABLE COLLEGE SAVINGS PROGRAM ACCOUNT TO AN 677
EQUIVALENT ACCOUNT IN ANOTHER STATE. 678
(2) IF A VARIABLE COLLEGE SAVINGS PROGRAM ACCOUNT IS 680
TERMINATED FOR ANY REASON OTHER THAN THOSE SET FORTH IN DIVISION 681
(D)(1) OF THIS SECTION, THE CONTRIBUTOR MAY RECEIVE A REFUND OF 682
17
THE BALANCE IN THE ACCOUNT, LESS ANY ADMINISTRATIVE FEES, AND 683
LESS ANY ADDITIONAL AMOUNT NECESSARY TO MEET THE MINIMUM REFUND 684
PENALTY REQUIREMENTS FOR A QUALIFIED STATE TUITION PROGRAM UNDER 685
SECTION 529 OF THE INTERNAL REVENUE CODE. 686
(3) EARNINGS SHALL BE CALCULATED AS THE TOTAL VALUE OF THE 688
VARIABLE SAVINGS PROGRAM ACCOUNT LESS THE AGGREGATE 690
CONTRIBUTIONS, OR IN SUCH OTHER MANNER AS PRESCRIBED BY SECTION 691
529 OF THE INTERNAL REVENUE CODE. 692
(E) In the case of a scholarship program, a refund of 694
tuition credits in the program's account may be made only for 696
just cause with the approval of the authority. The refund shall 697
be paid to the entity that established the scholarship program 698
or, with that entity's approval, to the authority if this is 699
authorized by federal tax law. The amount of any refund shall be 700
determined by the authority and shall meet the requirements for 701
refunds made on account of scholarships under section 529 of the 702
Internal Revenue Code. 703
(D)(F) If a beneficiary is awarded a scholarship other 705
than under a scholarship program, a waiver of tuition, or similar 706
subvention that the authority determines cannot be converted into 709
money by the beneficiary, the authority shall, during each 710
academic term that the beneficiary furnishes the authority such 711
information about the scholarship, waiver, or similar subvention 712
as the authority requires, refund to the person designated in the 713
contract, or, in the case of a beneficiary under a scholarship 714
program, to the beneficiary an amount equal to the value that the 715
tuition credits OR THE AMOUNTS IN THE VARIABLE COLLEGE SAVINGS 716
PROGRAM ACCOUNT that are not needed on account of the 718
scholarship, waiver, or similar subvention would otherwise have 719
to the beneficiary that term at the institution of higher
education where the beneficiary is enrolled. The authority may, 720
at its sole option, designate the institution of higher education 721
at which the beneficiary is enrolled as the agent of the 722
authority for purposes of refunds pursuant to this division. 723
18
(E)(G) If, in any academic term for which tuition credits 725
OR ANY AMOUNTS IN A VARIABLE COLLEGE SAVINGS PROGRAM ACCOUNT have 727
been used to pay all or part of a beneficiary's tuition, the
beneficiary withdraws from the institution of higher education at 728
which the beneficiary is enrolled prior to the end of the 729
academic term, a pro rata share of any refund of tuition as a 730
result of the withdrawal equal to that portion of the tuition 731
paid with tuition credits OR THE AMOUNTS IN A VARIABLE COLLEGE 732
SAVINGS PROGRAM ACCOUNT shall be made to the authority, unless 733
the authority designates a different procedure. The authority 734
shall credit any refund received, less any reasonable charges and 735
fees provided for by the authority, to the appropriate account 736
established under division (F)(1) or (2) of section 3334.11 of 738
the Revised Code OR DIVISION (H) OF THIS SECTION.
(H) THE AUTHORITY SHALL MAINTAIN A SEPARATE ACCOUNT FOR 740
EACH VARIABLE COLLEGE SAVINGS CONTRACT ENTERED INTO PURSUANT TO 741
DIVISION (A) OF SECTION 3334.18 OF THE REVISED CODE FOR 742
CONTRIBUTIONS MADE ON BEHALF OF A BENEFICIARY, SHOWING THE NAME 745
OF THE BENEFICIARY OF THAT CONTRACT AND THE AMOUNT OF 746
CONTRIBUTIONS MADE PURSUANT TO THAT CONTRACT. UPON REQUEST OF 747
ANY BENEFICIARY OR CONTRIBUTOR, THE AUTHORITY SHALL PROVIDE A 748
STATEMENT INDICATING, IN THE CASE OF A BENEFICIARY, THE AMOUNT OF 749
CONTRIBUTIONS MADE PURSUANT TO THAT CONTRACT ON BEHALF OF THE 750
BENEFICIARY, OR, IN THE CASE OF A CONTRIBUTOR, CONTRIBUTIONS 751
MADE, DISBURSED, OR REFUNDED PURSUANT TO THAT CONTRACT. 752
Sec. 3334.11. (A) The assets of the Ohio tuition trust 761
authority reserved for payment of the obligations of the 762
authority pursuant to tuition payment contracts shall be placed 763
in a fund, which is hereby created and shall be known as the Ohio 765
tuition trust fund. The fund shall be in the custody of the 766
treasurer of state, but shall not be part of the state treasury. 767
That portion of payments received by the authority or the 768
treasurer of state from persons purchasing tuition credits under 769
tuition payment contracts that the authority determines is 770
19
actuarially necessary for the payment of obligations of the 771
authority pursuant to tuition payment contracts, all interest and 772
investment income earned by the fund, and all other receipts of 773
the authority from any other source that the authority determines 775
appropriate, shall be deposited in the fund. No purchaser or 776
beneficiary of tuition credits shall have any claim against the 777
funds of any state institution of higher education. All 778
investment fees and other costs incurred in connection with the 779
exercise of the investment powers of the authority pursuant to 780
divisions (D) and (E) of this section shall be paid from the
assets of the fund. 781
(B) Unless otherwise provided by the authority, the assets 783
of the Ohio tuition trust fund shall be expended in the following 784
order: 785
(1) To make payments to beneficiaries, or institutions of 787
higher education on behalf of beneficiaries, under division (B) 788
of section 3334.09 of the Revised Code; 789
(2) To make refunds as provided in divisions (B), (C)(E), 791
and (D)(F) of section 3334.10 of the Revised Code; 792
(3) To pay the investment fees and other costs of 794
administering the fund. 795
(C)(1) Except as may be provided in an agreement under 797
division (A)(19) of section 3334.08 of the Revised Code, all 799
disbursements from the Ohio tuition trust fund shall be made by
the treasurer of state on order of a designee of the authority. 800
(2) The treasurer of state shall deposit any portion of 802
the Ohio tuition trust fund not needed for immediate use in the 803
same manner as state funds are deposited. 804
(D) The authority is the trustee of the Ohio tuition trust 806
fund. The authority shall have full power to invest the assets 808
of the fund and in exercising this power shall be subject to the
limitations and requirements contained in divisions (K) to (M) of 810
this section and sections 145.112 and 145.113 of the Revised 811
Code. The evidences of title of all investments shall be 812
20
delivered to the treasurer of state or to a qualified trustee 814
designated by the treasurer of state as provided in section 816
135.18 of the Revised Code. Assets of the fund shall be 817
administered by the authority in a manner designed to be 818
actuarially sound so that the assets of the fund will be
sufficient to satisfy the obligations of the authority pursuant 819
to tuition payment contracts and defray the reasonable expenses 820
of administering the fund. 821
(E) The public employees retirement board shall, with the 823
approval of the authority, exercise the investment powers of the 824
authority as set forth in division (D) of this section until the 825
authority determines that assumption and exercise by the 826
authority of the investment powers is financially and 827
administratively feasible. The investment powers shall be 828
exercised by the public employees retirement board in a manner 829
agreed upon by the authority that maximizes the return on 830
investment and minimizes the administrative expenses. 831
(F)(1) The authority shall maintain a separate account for 833
each tuition payment contract entered into pursuant to division 835
(A) of section 3334.09 of the Revised Code for the purchase of 836
tuition credits on behalf of a beneficiary or beneficiaries 837
showing the beneficiary or beneficiaries of that contract and the 838
number of tuition credits purchased pursuant to that contract. 839
Upon request of any beneficiary or person who has entered into a 840
tuition payment contract, the authority shall provide a statement 841
indicating, in the case of a beneficiary, the number of tuition 842
credits purchased on behalf of the beneficiary, or in the case of 843
a person who has entered into a tuition payment contract, the 844
number of tuition credits purchased, used, or refunded pursuant 845
to that contract. A beneficiary and person that have entered 846
into a tuition payment contract each may file only one request 847
under this division in any year. 848
(2) The authority shall maintain an account for each 850
scholarship program showing the number of tuition credits that 851
21
have been purchased for or donated to the program and the number 852
of tuition credits that have been used. Upon the request of the 853
entity that established the scholarship program, the authority 854
shall provide a statement indicating these numbers. 855
(G) In addition to the Ohio tuition trust fund, there is 857
hereby established a reserve fund that shall be in the custody of 860
the treasurer of state but shall not be part of the state
treasury, and shall be known as the Ohio tuition trust reserve 861
fund, and an operating fund that shall be part of the state 863
treasury, and shall be known as the Ohio tuition trust operating 864
fund. That portion of payments received by the authority or the 865
treasurer of state from persons purchasing tuition credits under 866
tuition payment contracts that the authority determines is not 868
actuarially necessary for the payment of obligations of the 869
authority pursuant to tuition payment contracts, any interest and 870
investment income earned by the reserve fund, any administrative 871
charges and fees imposed by the authority on transactions under 872
this chapter or on purchasers or beneficiaries of tuition 873
credits, and all other receipts from any other source that the 875
authority determines appropriate, shall be deposited in the 876
reserve fund to pay the operating expenses of the authority and 877
the costs of administering the program. The assets of the 878
reserve fund may be invested in the same manner and subject to 879
the same limitations set forth in divisions (D), (E), and (K) to 881
(M) of this section and sections 145.112 and 145.113 of the 882
Revised Code. All investment fees and other costs incurred in 884
connection with the exercise of the investment powers shall be 886
paid from the assets of the reserve fund. Except as otherwise 887
provided for in this chapter, all operating expenses of the 888
authority and costs of administering the program shall be paid 889
from the operating fund. The treasurer shall, upon request of 890
the authority, transfer funds from the reserve fund to the 891
operating fund as the authority determines appropriate to pay 892
those current operating expenses of the authority and costs of 893
22
administering the program as the authority designates. Any 894
interest or investment income earned on the assets of the 895
operating fund shall be deposited in the operating fund. 896
(H) In January of each year the authority shall report to 898
each person who received any payments or refunds from the 899
authority during the preceding year information relative to the 900
value of the payments or refunds to assist in determining that 902
person's tax liability. 903
(I) The authority shall report to the tax commissioner any 906
information, and at the times, as the tax commissioner requires 908
to determine any tax liability that a person may have incurred 909
during the preceding year as a result of having received any 910
payments or refunds from the authority.
(J) All records of the authority indicating the identity 912
of purchasers and beneficiaries of tuition credits or college 913
savings bonds, the number of tuition credits purchased, used, or 914
refunded under a tuition payment contract, and the number of 915
college savings bonds purchased, held, or redeemed are not public 916
records within the meaning of section 149.43 of the Revised Code. 917
(K) The authority and other fiduciaries shall discharge 920
their duties with respect to the funds with care, skill, 921
prudence, and diligence under the circumstances then prevailing 922
that a prudent person acting in a like capacity and familiar with 923
such matters would use in the conduct of an enterprise of a like 924
character and with like aims; and by diversifying the investments 925
of the assets of the funds so as to minimize the risk of large 926
losses, unless under the circumstances it is clearly prudent not 928
to do so.
To facilitate investment of the funds, the authority may 930
establish a partnership, trust, limited liability company, 931
corporation, including a corporation exempt from taxation under 932
the Internal Revenue Code, 100 Stat. 2085, 26 U.S.C. 1, as 933
amended, or any other legal entity authorized to transact 934
business in this state.
23
(L) In exercising its fiduciary responsibility with 936
respect to the investment of the assets of the funds, it shall be 937
the intent of the authority to give consideration to investments 938
that enhance the general welfare of the state and its citizens 939
where the investments offer quality, return, and safety 940
comparable to other investments currently available to the 941
authority. In fulfilling this intent, equal consideration shall 942
also be given to investments otherwise qualifying under this 943
section that involve minority owned and controlled firms and 944
firms owned and controlled by women, either alone or in joint 945
venture with other firms.
The authority shall adopt, in regular meeting, policies, 948
objectives, or criteria for the operation of the investment 949
program that include asset allocation targets and ranges, risk 951
factors, asset class benchmarks, time horizons, total return 952
objectives, and performance evaluation guidelines. In adopting 954
policies and criteria for the selection of agents with whom the 955
authority may contract for the administration of the assets of
the funds, the authority shall give equal consideration to 956
minority owned and controlled firms, firms owned and controlled 957
by women, and ventures involving minority owned and controlled 958
firms and firms owned and controlled by women that otherwise meet 959
the policies and criteria established by the authority. 960
Amendments and additions to the policies and criteria shall be 961
adopted in regular meeting. The authority shall publish its
policies, objectives, and criteria under this provision no less 962
often than annually and shall make copies available to interested 964
parties.
When reporting on the performance of investments, the 966
authority shall comply with the performance presentation 968
standards established by the association for investment 969
management and research.
(M) All investments shall be purchased at current market 971
prices and the evidences of title of the investments shall be 972
24
placed in the hands of the treasurer of state, who is hereby 973
designated as custodian thereof, or in the hands of the treasurer 975
of state's authorized agent. The treasurer of state or the agent 976
shall collect the principal, dividends, distributions, and
interest thereon as they become due and payable and place them 977
when so collected into the custodial funds. 978
The treasurer of state shall pay for investments purchased 980
by the authority on receipt of written or electronic instructions 981
from the authority or the authority's designated agent 982
authorizing the purchase and pending receipt of the evidence of 984
title of the investment by the treasurer of state or the
treasurer of state's authorized agent. The authority may sell 985
investments held by the authority, and the treasurer of state or 986
the treasurer of state's authorized agent shall accept payment 987
from the purchaser and deliver evidence of title of the 988
investment to the purchaser on receipt of written or electronic 989
instructions from the authority or the authority's designated 990
agent authorizing the sale, and pending receipt of the moneys for
the investments. The amount received shall be placed in the 991
custodial funds. The authority and the treasurer of state may 992
enter into agreements to establish procedures for the purchase 993
and sale of investments under this division and the custody of 994
the investments.
No purchase or sale of any investment shall be made under 996
this section except as authorized by the authority. 997
Any statement of financial position distributed by the 999
authority shall include fair value, as of the statement date, of 1,000
all investments held by the authority under this section. 1,001
Sec. 3334.12. Notwithstanding anything to the contrary in 1,010
sections 3334.07 and 3334.09 of the Revised Code: 1,011
(A) Annually, the Ohio tuition trust authority shall have 1,013
the actuarial soundness of the Ohio tuition trust fund evaluated 1,014
by a nationally recognized actuary and shall determine whether 1,015
additional assets are necessary to defray the obligations of the 1,016
25
authority. If, after the authority sets the price for tuition 1,017
credits, circumstances arise that the executive director 1,019
determines necessitate an additional evaluation of the actuarial 1,020
soundness of the fund, the executive director shall have a 1,022
nationally recognized actuary conduct the necessary evaluation. 1,023
If the assets of the fund are insufficient to ensure the 1,024
actuarial soundness of the fund, the authority shall adjust the 1,025
price of subsequent purchases of tuition credits.
(B) Upon termination of the program or liquidation of the 1,027
Ohio tuition trust fund, the Ohio tuition trust reserve fund, and 1,028
the Ohio tuition trust operating fund, any remaining assets of 1,029
the funds after all obligations of the funds have been satisfied 1,030
pursuant to division (B) of section 3334.11 of the Revised Code 1,031
shall be transferred to the general revenue fund of the state. 1,032
(C) The authority shall prepare and cause to have audited 1,034
an annual financial report on all financial activity of the Ohio 1,035
tuition trust authority within ninety days of the end of the 1,036
fiscal year. The authority shall transmit a copy of the audited 1,037
financial report to the governor, the president of the senate, 1,038
the speaker of the house of representatives, and the minority 1,039
leaders of the senate and the house of representatives. Copies 1,040
of the audited financial report also shall be made available, 1,041
upon request, to the persons entering into contracts with the 1,042
authority and to prospective purchasers of tuition credits AND 1,043
PROSPECTIVE CONTRIBUTORS TO VARIABLE COLLEGE SAVINGS PROGRAM 1,044
ACCOUNTS.
Sec. 3334.15. (A) The right of a person to a tuition 1,053
credit or a payment under section 3334.09 of the Revised Code 1,055
pursuant to a tuition credit contract or, A scholarship program, 1,056
OR A VARIABLE COLLEGE SAVINGS PROGRAM ACCOUNT shall not be 1,058
subject to execution, garnishment, attachment, the operation of 1,060
bankruptcy or the insolvency laws, or other process of law. 1,061
(B) THE RIGHT OF A PERSON TO A TUITION CREDIT OR A PAYMENT 1,063
UNDER SECTION 3334.09 OF THE REVISED CODE PURSUANT TO A TUITION 1,064
26
CREDIT CONTRACT, A SCHOLARSHIP PROGRAM, OR A VARIABLE COLLEGE 1,065
SAVINGS PROGRAM ACCOUNT SHALL NOT BE USED AS SECURITY OR 1,066
COLLATERAL FOR A LOAN.
Sec. 3334.18. (A) A VARIABLE COLLEGE SAVINGS PROGRAM 1,068
ESTABLISHED BY THE OHIO TUITION TRUST AUTHORITY SHALL INCLUDE 1,069
PROVISIONS FOR A CONTRACT TO BE ENTERED INTO BETWEEN A 1,070
CONTRIBUTOR AND THE AUTHORITY THAT WILL AUTHORIZE THE CONTRIBUTOR 1,071
TO OPEN AN ACCOUNT FOR A BENEFICIARY AND AUTHORIZE THE 1,073
CONTRIBUTOR TO SUBSTITUTE A NEW BENEFICIARY FOR ONE ORIGINALLY
NAMED IN THE CONTRACT, TO THE EXTENT PERMITTED BY SECTION 529 OF 1,075
THE INTERNAL REVENUE CODE.
(B) THE AUTHORITY SHALL PROVIDE ADEQUATE SAFEGUARDS TO 1,077
PREVENT TOTAL CONTRIBUTIONS TO A VARIABLE COLLEGE SAVINGS PROGRAM 1,078
ACCOUNT OR PURCHASES OF TUITION CREDITS, EITHER SEPARATELY OR 1,079
COMBINED, THAT ARE MADE ON BEHALF OF A BENEFICIARY FROM EXCEEDING 1,080
THE AMOUNT NECESSARY TO PROVIDE FOR THE TUITION AND OTHER HIGHER 1,081
EDUCATION EXPENSES OF THE BENEFICIARY, CONSISTENT WITH THE 1,082
MAXIMUM CONTRIBUTIONS PERMITTED BY SECTION 529 OF THE INTERNAL 1,084
REVENUE CODE. HOWEVER, IN NO EVENT SHALL CONTRIBUTIONS OR 1,085
PURCHASES EXCEED THE ALLOWABLE LIMIT FOR A QUALIFIED STATE 1,086
TUITION PROGRAM UNDER SECTION 529 OF THE INTERNAL REVENUE CODE. 1,087
(C)(1) PARTICIPATION IN THE VARIABLE COLLEGE SAVINGS 1,089
PROGRAM DOES NOT GUARANTEE THAT CONTRIBUTIONS AND THE INVESTMENT 1,090
RETURN ON CONTRIBUTIONS, IF ANY, WILL BE ADEQUATE TO COVER FUTURE 1,092
TUITION AND OTHER HIGHER EDUCATION EXPENSES OR THAT A BENEFICIARY 1,093
WILL BE ADMITTED TO OR PERMITTED TO CONTINUE TO ATTEND AN 1,094
INSTITUTION OF HIGHER EDUCATION.
(2) RETURNS ON CONTRIBUTORS' INVESTMENTS IN THE VARIABLE 1,096
COLLEGE SAVINGS PROGRAM ARE NOT GUARANTEED BY THE STATE AND THE 1,097
CONTRIBUTORS TO THE VARIABLE COLLEGE SAVINGS PROGRAM ASSUME ALL 1,098
INVESTMENT RISK, INCLUDING THE POTENTIAL LOSS OF PRINCIPAL AND 1,099
LIABILITY FOR PENALTIES SUCH AS THOSE LEVIED FOR NONEDUCATIONAL 1,100
WITHDRAWALS.
(3) THE STATE SHALL HAVE NO DEBT OR OBLIGATION TO ANY 1,103
27
CONTRIBUTOR, BENEFICIARY, OR ANY OTHER PERSON AS A RESULT OF THE 1,104
ESTABLISHMENT OF THE PROGRAM, AND THE STATE ASSUMES NO RISK OR 1,105
LIABILITY FOR FUNDS INVESTED IN THE VARIABLE COLLEGE SAVINGS 1,106
PROGRAM.
(4) INFORMATIONAL MATERIALS ABOUT THE VARIABLE COLLEGE 1,108
SAVINGS PROGRAM PREPARED BY THE AUTHORITY OR ITS AGENTS AND 1,109
PROVIDED TO PROSPECTIVE CONTRIBUTORS SHALL STATE CLEARLY THE 1,110
INFORMATION SET FORTH IN DIVISION (C) OF THIS SECTION. 1,111
Sec. 3334.19. (A) THE OHIO TUITION TRUST AUTHORITY SHALL 1,114
ADOPT AN INVESTMENT PLAN THAT SETS FORTH INVESTMENT POLICIES AND 1,115
GUIDELINES TO BE UTILIZED IN ADMINISTERING THE VARIABLE COLLEGE 1,116
SAVINGS PROGRAM. EXCEPT AS PROVIDED IN SECTION 3334.20 OF THE 1,118
REVISED CODE, THE AUTHORITY SHALL CONTRACT WITH ONE OR MORE 1,119
INSURANCE COMPANIES, BANKS, OR OTHER FINANCIAL INSTITUTIONS TO 1,120
ACT AS ITS INVESTMENT AGENTS AND TO PROVIDE SUCH SERVICES AS THE 1,121
AUTHORITY CONSIDERS APPROPRIATE TO THE INVESTMENT PLAN, 1,122
INCLUDING:
(1) PURCHASE, CONTROL, AND SAFEKEEPING OF ASSETS; 1,124
(2) RECORD KEEPING AND ACCOUNTING FOR INDIVIDUAL ACCOUNTS 1,126
AND FOR THE PROGRAM AS A WHOLE; 1,127
(3) PROVISION OF CONSOLIDATED STATEMENTS OF ACCOUNT. 1,130
(B) THE AUTHORITY OR ITS INVESTMENT AGENTS SHALL MAINTAIN 1,132
A SEPARATE ACCOUNT FOR THE BENEFICIARY OF EACH CONTRACT ENTERED 1,133
INTO UNDER THE VARIABLE COLLEGE SAVINGS PROGRAM. IF A 1,134
BENEFICIARY HAS MORE THAN ONE SUCH ACCOUNT, THE AUTHORITY OR ITS 1,135
AGENTS SHALL TRACK TOTAL CONTRIBUTIONS AND EARNINGS AND PROVIDE A 1,136
CONSOLIDATED SYSTEM OF ACCOUNT DISTRIBUTIONS TO INSTITUTIONS OF 1,137
HIGHER EDUCATION.
(C) THE AUTHORITY OR ITS AGENTS MAY PLACE ASSETS OF THE 1,139
PROGRAM IN SAVINGS ACCOUNTS AND MAY PURCHASE FIXED OR VARIABLE 1,140
LIFE INSURANCE OR ANNUITY CONTRACTS, SECURITIES, EVIDENCE OF 1,142
INDEBTEDNESS, OR OTHER INVESTMENT PRODUCTS PURSUANT TO THE 1,143
INVESTMENT PLAN.
(D) CONTRIBUTORS SHALL NOT DIRECT THE INVESTMENT OF THEIR 1,145
28
CONTRIBUTIONS UNDER THE INVESTMENT PLAN. THE AUTHORITY SHALL 1,146
IMPOSE OTHER LIMITS ON CONTRIBUTORS' INVESTMENT DISCRETION AS 1,147
REQUIRED UNDER SECTION 529 OF THE INTERNAL REVENUE CODE. 1,148
(E) THE INVESTMENT AGENTS WITH WHICH THE AUTHORITY 1,150
CONTRACTS SHALL DISCHARGE THEIR DUTIES WITH RESPECT TO PROGRAM 1,151
FUNDS WITH THE CARE AND DILIGENCE THAT A PRUDENT PERSON FAMILIAR 1,153
WITH SUCH MATTERS AND WITH THE CHARACTER AND AIMS OF THE PROGRAM 1,154
WOULD USE.
(F) THE ASSETS OF THE PROGRAM SHALL BE PRESERVED, 1,156
INVESTED, AND EXPENDED SOLELY FOR THE PURPOSES OF THIS CHAPTER 1,157
AND SHALL NOT BE LOANED OR OTHERWISE TRANSFERRED OR USED BY THE 1,159
STATE FOR ANY OTHER PURPOSE. THIS SECTION SHALL NOT BE CONSTRUED
TO PROHIBIT THE INVESTMENT AGENTS OF THE AUTHORITY FROM 1,160
INVESTING, BY PURCHASE OR OTHERWISE, IN BONDS, NOTES, OR OTHER 1,162
OBLIGATIONS OF THE STATE OR ANY AGENCY OR INSTRUMENTALITY OF THE 1,163
STATE. UNLESS OTHERWISE SPECIFIED BY THE AUTHORITY, ASSETS OF 1,164
THE PROGRAM SHALL BE EXPENDED IN THE FOLLOWING ORDER OF PRIORITY: 1,165
(1) TO MAKE PAYMENTS ON BEHALF OF BENEFICIARIES; 1,167
(2) TO MAKE REFUNDS UPON TERMINATION OF VARIABLE COLLEGE 1,169
SAVINGS PROGRAM CONTRACTS; 1,170
(3) TO PAY THE COSTS OF PROGRAM ADMINISTRATION AND 1,172
OPERATIONS.
(G) NO RECORDS OF THE AUTHORITY INDICATING THE IDENTITY OF 1,174
CONTRIBUTORS AND BENEFICIARIES UNDER THE PROGRAM OR AMOUNTS 1,175
CONTRIBUTED TO, EARNED BY, OR DISTRIBUTED FROM PROGRAM ACCOUNTS 1,176
ARE PUBLIC RECORDS WITHIN THE MEANING OF SECTION 149.43 OF THE 1,177
REVISED CODE.
Sec. 3334.20. (A) AS USED IN THIS SECTION, "STATE AGENCY" 1,179
MEANS EVERY DEPARTMENT, BUREAU, BOARD, COMMISSION, OFFICE, OR 1,181
OTHER ORGANIZED BODY ESTABLISHED BY THE CONSTITUTION OR LAWS OF 1,182
THIS STATE FOR THE EXERCISE OF STATE GOVERNMENT. 1,183
(B) IF A CONDITION ARISES CONCERNING THE INVESTMENT OF 1,185
FUNDS RECEIVED UNDER THE VARIABLE COLLEGE SAVINGS PROGRAM AND 1,186
REQUIRING AN INTERIM PERIOD FOR INVESTMENT OF PROGRAM FUNDS, 1,187
29
WHICH CONDITION IS DETERMINED PURSUANT TO DIVISION (D) OF THIS 1,188
SECTION, THE OHIO TUITION TRUST AUTHORITY SHALL CHOOSE THE 1,190
TREASURER OF STATE, A STATE AGENCY HAVING INVESTMENT AUTHORITY, 1,191
OR AN INVESTMENT AGENT UNDER CONTRACT WITH THE AUTHORITY TO 1,192
INVEST PROGRAM FUNDS PURSUANT TO THE INVESTMENT PLAN ESTABLISHED 1,193
UNDER DIVISION (A) OF SECTION 3334.19 OF THE REVISED CODE. THE 1,194
TREASURER OF STATE, STATE AGENCY, OR INVESTMENT AGENT CHOSEN BY 1,195
THE AUTHORITY PURSUANT TO THIS DIVISION SHALL BE SUBJECT TO THE 1,196
REQUIREMENTS AND CONDITIONS THAT APPLY TO INVESTMENT AGENTS 1,197
SPECIFIED IN SECTION 3334.19 OF THE REVISED CODE. 1,198
(C) THE AUTHORITY SHALL BE THE TRUSTEE OF THE PROGRAM. 1,200
DURING THE INTERIM PERIOD, THE AUTHORITY SHALL RECEIVE AND HOLD 1,201
ALL PAYMENTS, DEPOSITS, AND CONTRIBUTIONS, AS WELL AS GIFTS, 1,202
BEQUESTS, ENDOWMENTS, AND FEDERAL, STATE, OR LOCAL GRANTS AND ANY 1,203
FUNDS FROM ANY OTHER SOURCE, PUBLIC OR PRIVATE, AND ALL EARNINGS, 1,204
UNTIL DISBURSED TO PAY TUITION OR OTHER HIGHER EDUCATION EXPENSES 1,205
OR REFUNDS PURSUANT TO COLLEGE SAVINGS PLANS CONTRACTS. THE 1,206
AUTHORITY SHALL KEEP SUCH FUNDS SEGREGATED FROM ALL OTHER ASSETS 1,207
OF THE AUTHORITY. 1,208
(D) THE AUTHORITY SHALL ADOPT RULES UNDER SECTION 111.15 1,210
OF THE REVISED CODE DEFINING THE CONDITIONS UNDER WHICH AN 1,212
INTERIM INVESTMENT PERIOD IS REQUIRED AND THIS SECTION APPLIES. 1,213
THE RULES SHALL INCLUDE ANY CONDITION REQUIRING THE TERMINATION 1,214
OF THE INTERIM PERIOD AND THE AUTHORITY TO CONTRACT WITH 1,215
ALTERNATIVE INVESTMENT AGENTS PURSUANT TO SECTION 3334.19 OF THE 1,216
REVISED CODE AND ANY OTHER REQUIREMENTS THAT APPLY DURING THE 1,218
INTERIM INVESTMENT PERIOD.
(E) WHEN THE INTERIM PERIOD FOR INVESTMENT OF PROGRAM 1,220
FUNDS TERMINATES, THE INVESTMENT AGENTS SELECTED PURSUANT TO 1,221
SECTION 3334.19 OF THE REVISED CODE FOR THE INVESTMENT OF PROGRAM 1,222
FUNDS SHALL HAVE THE SOLE AUTHORITY TO INVEST PROGRAM FUNDS 1,223
PURSUANT TO THE INVESTMENT PLAN ESTABLISHED UNDER DIVISION (A) OF 1,224
THAT SECTION AND SHALL BE SUBJECT TO THAT SECTION. 1,225
Sec. 3334.21. THE VARIABLE COLLEGE SAVINGS PROGRAM MAY BE 1,227
30
TERMINATED BY STATUTE OR UPON THE DETERMINATION OF THE OHIO 1,228
TUITION TRUST AUTHORITY THAT THE PROGRAM IS NOT FINANCIALLY 1,229
FEASIBLE. UPON TERMINATION, ALL AMOUNTS HELD IN PROGRAM ACCOUNTS 1,230
SHALL BE RETURNED TO ACCOUNT OWNERS, TO THE EXTENT POSSIBLE, AND 1,231
ANY UNCLAIMED ASSETS IN THE PROGRAM SHALL BE TRANSFERRED TO THE 1,232
UNCLAIMED FUNDS TRUST FUND AND DISPOSED OF IN ACCORDANCE WITH 1,233
SECTION 169.05 OF THE REVISED CODE.
Sec. 3366.01. As used in this chapter, the following words 1,243
and terms have the following meanings unless the context 1,244
indicates a different meaning or intent:
(A) "Bond proceedings" means the order, trust, agreement, 1,247
indenture and other agreements, or amendments and supplements to 1,248
the foregoing, or any one or more or combination thereof, 1,249
authorizing or providing for the terms and conditions applicable 1,250
to, or providing for the issuance, security, or liquidity of, 1,251
obligations and the provisions contained in such obligations. 1,252
(B) "Bond service charges" means principal, including 1,255
mandatory sinking fund requirements for retirement of 1,256
obligations, and interest, and redemption premium, if any, 1,257
required to be paid on obligations.
(C) "Bond service fund" means the applicable fund and 1,260
accounts therein created in the bond proceedings for and pledged 1,261
to the payment of bond service charges, including all moneys and 1,262
investments, and earnings from investments, credited and to be 1,263
credited thereto.
(D) "Costs of attendance" means all costs of a student 1,266
incurred in connection with a program of study at an eligible 1,267
institution, as determined by the institution, including tuition; 1,268
instructional fees; room and board; books, computers, and 1,269
supplies; and other related fees, charges, and expenses. 1,270
(E) "Designated nonprofit corporation ADMINISTRATOR" 1,273
means, WITH RESPECT TO ALL OBLIGATIONS ISSUED PRIOR TO SEPTEMBER 1,274
1, 1999, AND TO ALL NONFEDERAL EDUCATION LOANS, the nonprofit 1,276
corporation designated ON NOVEMBER 10, 1992, under division (D) 1,278
31
of section 3351.07 of the Revised Code to operate exclusively for 1,279
charitable and educational purposes by expanding access to higher 1,280
education financing programs for students and families in need of 1,281
student financial aid. FOR ALL OTHER PURPOSES, "DESIGNATED 1,283
ADMINISTRATOR" MEANS THE OHIO CORPORATION THAT IS A SUBSIDIARY OF 1,284
THE NONPROFIT CORPORATION DESIGNATED UNDER DIVISION (D) OF 1,285
SECTION 3351.07 OF THE REVISED CODE AND THAT HAS AGREED TO ENTER 1,287
INTO AN ADMINISTRATION AGREEMENT WITH THE ISSUING AUTHORITY AND 1,288
THE DIRECTOR OF DEVELOPMENT, OR ANY OTHER PERSON THAT ENTERS INTO 1,289
AN ADMINISTRATION AGREEMENT WITH THE ISSUING AUTHORITY AND THE 1,290
DIRECTOR OF DEVELOPMENT. 1,291
(F) "Education loan" means a loan made by an eligible 1,294
lender pursuant to the policy guidelines to or for the benefit of 1,296
a student for the purpose of financing part or all of the
student's costs of attendance. 1,297
(G) "Eligible borrower" means any of the following: 1,300
(1) Individuals who are residents of the state, and who 1,302
are attending and are in good standing in, or who have been 1,303
accepted for attendance at, any eligible institution located in 1,304
this state or elsewhere, on a part-time or full-time basis, to 1,305
pursue an associate, baccalaureate, or advanced degree or a 1,306
nursing diploma; 1,307
(2) Individuals who reside outside the state and who have 1,310
been accepted for attendance at, or who are attending and are in 1,311
good standing in, any eligible institution located in this state, 1,312
on a part-time or full-time basis, to pursue an associate,
baccalaureate, or advanced degree or a nursing diploma; 1,313
(3) Individuals who are parents or legal guardians of, or 1,316
other persons, as set forth in the policy guidelines, borrowing 1,317
under an education loan for the benefit of individuals meeting 1,318
requirements set forth in division (G)(1) or (2) of this section, 1,319
in order to assist them in paying costs of attendance. 1,320
(H)(1) "Eligible institution" means an institution 1,323
described in any of divisions (H)(1)(a), (b), or (c) of this 1,324
32
section that satisfies all of the requirements set forth in 1,326
divisions (H)(2), (3), and (4) of this section. 1,327
(a) The institution is a state-assisted post-secondary 1,330
educational institution within this state.
(b) The institution is a nonprofit institution within this 1,333
state having a certificate of authorization from the Ohio board 1,334
of regents pursuant to Chapter 1713. of the Revised Code. 1,335
(c) The institution is a post-secondary educational 1,338
institution similar to one described in division (H)(1)(a) or (b) 1,339
of this section that is located outside this state and that is 1,340
similarly approved by the appropriate agency of that state. 1,341
(2) The institution is accredited by the appropriate 1,343
regional and, when appropriate, professional accrediting 1,344
associations within whose jurisdiction it falls. 1,345
(3) The institution satisfies the eligibility requirements 1,348
for participation in the federal family education loan program 1,349
authorized under Title IV, Part B, of the "Higher Education Act 1,351
of 1965," 20 U.S.C.A. 1071 et seq., as amended, as long as that 1,353
program remains in existence.
(4) The institution satisfies the other conditions set 1,355
forth in the policy guidelines. 1,356
(I) "Eligible lender" means, WITH RESPECT TO LENDERS 1,358
MAKING NONFEDERAL EDUCATION LOANS, a bank, national banking 1,359
association, savings bank, savings and loan association, or 1,360
credit union having an office in this state that satisfies the 1,361
criteria for eligible lenders established pursuant to the policy 1,362
guidelines. WITH RESPECT TO LENDERS MAKING FEDERAL EDUCATION 1,363
LOANS, "ELIGIBLE LENDER" MEANS ANY PERSON THAT IS PERMITTED TO 1,365
MAKE LOANS UNDER THE FEDERAL FAMILY EDUCATION LOAN PROGRAM 1,366
AUTHORIZED UNDER TITLE IV, PART B, OF THE "HIGHER EDUCATION ACT 1,369
OF 1965," 20 U.S.C.A. 1071 ET SEQ., AS AMENDED; THAT HAS AN 1,370
OFFICE IN THIS STATE; AND THAT SATISFIES THE CRITERIA FOR
ELIGIBLE LENDERS ESTABLISHED PURSUANT TO THE POLICY GUIDELINES. 1,371
(J) "FEDERAL EDUCATION LOAN" MEANS AN EDUCATION LOAN THAT 1,373
33
IS ORIGINATED IN COMPLIANCE WITH THE FEDERAL FAMILY EDUCATION 1,374
LOAN PROGRAM AUTHORIZED UNDER TITLE IV, PART B, OF THE "HIGHER 1,379
EDUCATION ACT OF 1965," 20 U.S.C.A. 1071 ET SEQ., AS AMENDED. 1,380
(J)(K) "Governmental agency" means the state and any state 1,383
department, division, commission, institution, or authority; the 1,384
United States or any agency thereof; or any agency, commission, 1,385
or authority established pursuant to an interstate compact or 1,386
agreement; or any combination of the foregoing. 1,387
(K)(L) "Issuing authority" means the treasurer of state, 1,390
or the officer who by law performs the functions of the treasurer 1,391
of state.
(L)(M) "NONFEDERAL EDUCATION LOAN" MEANS ANY EDUCATION 1,393
LOAN THAT IS NOT A FEDERAL EDUCATION LOAN. 1,395
(N) "Obligations" means the bonds, notes, or securities of 1,398
this state issued by the issuing authority pursuant to this 1,399
chapter.
(M)(O) "Person" means any individual, corporation, 1,402
business trust, estate, trust, partnership, or association, any 1,403
federal, state, interstate, regional, or local governmental 1,404
agency, any subdivision of the state, or any combination of 1,405
these.
(N)(P) "Pledged receipts" means, to the extent the 1,408
following are pledged by the bond proceedings for the payment of 1,409
bond service charges: all receipts representing moneys accruing 1,410
from or in connection with the repayment of education loans, 1,411
including interest and payments from any guarantee or insurance 1,412
in respect to such education loans; accrued interest received 1,413
from the sale of obligations; the balances in the special funds; 1,414
income from the investment of the special funds; all right, 1,415
title, or interest of the state in any education loans and any 1,416
guarantees or insurance in respect thereof; all right, title, and 1,417
interest of the STATE AND THE designated nonprofit corporation 1,419
ADMINISTRATOR in the education loans and any guarantees or 1,421
insurance in respect thereof, and any money representing the
34
proceeds of obligations or any income from or interest on those 1,422
proceeds; or any other gifts, grants, donations, and pledges and 1,423
any income and receipts therefrom, available and pledged for the 1,424
payment of bond service charges. 1,425
(O)(Q) "Policy guidelines" means the rules adopted 1,428
pursuant to division (A) of section 3366.03 of the Revised Code. 1,429
(P)(R) "Proceeds loan" means the transfer, pursuant to a 1,432
loan agreement or agency agreement, of the proceeds of the 1,433
obligations, or the deposit of the proceeds of the obligations 1,434
with a trustee in trust under a trust agreement, indenture, or 1,435
other trust document under the bond proceedings pending their 1,436
disbursement for the purposes authorized by this chapter. 1,437
(Q)(S) "Resident" means any student who would qualify as a 1,440
resident of this state for state subsidy and tuition surcharge 1,441
purposes under rules adopted by the Ohio board of regents under 1,442
section 3333.31 of the Revised Code. 1,443
(R)(T) "Special funds" or "funds" means the bond service 1,446
fund and any other funds, including reserve funds, created under 1,447
the bond proceedings, including all moneys and investments, and 1,448
earnings from investment, credited and to be credited thereto. 1,449
(S)(U) "Student" means an individual described in division 1,452
(G)(1) or (2) of this section who meets requirements established 1,453
under the policy guidelines. "Student" includes dependent and 1,454
independent undergraduate, graduate, and professional students. 1,455
(T)(V) "Subdivision" has the same meaning as in division 1,458
(MM) of section 133.01 of the Revised Code. 1,459
Sec. 3366.03. (A) In furtherance of the public policy and 1,469
purpose set forth in section 3366.02 of the Revised Code and to 1,470
implement that purpose, the director of development, with the 1,471
approval of the issuing authority, shall adopt, amend, or rescind 1,472
rules, pursuant to Chapter 119. of the Revised Code, establishing 1,473
such policy guidelines as the director considers necessary or 1,474
appropriate to provide for creating a secondary market for 1,475
education loans as authorized by this chapter. The policy 1,476
35
guidelines shall include such provisions as the director 1,477
considers appropriate to further the public policy and purpose 1,478
set forth in section 3366.02 of the Revised Code. 1,480
(B) The director of development or the issuing authority 1,483
or both may:
(1) Enter into agreements with the ANY designated 1,485
nonprofit corporation ADMINISTRATOR to provide for the proceeds 1,486
loan for the purchase of education loans on the secondary market; 1,488
(2) Enter into agreements with the ANY designated 1,490
nonprofit corporation ADMINISTRATOR to provide for stimulating 1,491
the making of education loans through the the acquisition of such 1,493
loans, in accordance with the policy guidelines; and 1,494
(3) Do all other acts and enter into contracts and execute 1,497
all instruments necessary or appropriate to carry out the
provisions of this chapter. 1,498
(C) All expenses and obligations incurred by the issuing 1,501
authority or the director of development in carrying out duties 1,502
and in exercising powers under this chapter shall be payable 1,503
solely from, as appropriate, pledged receipts, moneys from the 1,504
sale of obligations, or any amounts contributed by the designated 1,505
nonprofit corporation ADMINISTRATOR. This chapter does not 1,506
authorize the issuing authority to incur debt or bonded 1,507
indebtedness of the state, or to obligate or pledge any moneys 1,508
other than pledged receipts for the payment of any obligations. 1,509
(D) The designated nonprofit corporation ADMINISTRATOR, 1,511
subject to the applicable provisions of this chapter, shall 1,512
purchase education loans from eligible lenders directly or 1,513
indirectly, with moneys loaned or otherwise provided to it under 1,515
this chapter from the proceeds of obligations, which education 1,516
loans are used by and for students for paying costs of attendance 1,518
at eligible institutions.
(E) In accordance with the policy guidelines, the 1,521
designated nonprofit corporation ADMINISTRATOR shall do all of 1,522
the following: 1,523
36
(1) Specify the terms of and procedures for making, 1,525
selling, purchasing, servicing, and collecting those education 1,526
loans eligible for purchase under the guidelines; 1,527
(2) Take such actions as may be necessary or appropriate 1,530
to establish the terms of, purchase, service or otherwise 1,531
administer, and collect any education loan;
(3) With respect to those loans acquired pursuant to this 1,533
chapter, establish the fees including, without limitation, 1,534
origination and loan fees; charges; rates of interest; times of 1,535
payment of interest and principal; late charges; aggregate 1,536
amounts of education loans to be issued per year and in total; 1,537
eligibility and credit criteria of eligible borrowers; 1,538
refinancing or consolidation provisions; criteria for 1,540
participation by eligible lenders; criteria for allocating the 1,541
distribution of education loans among students attending or 1,542
planning to attend different eligible institutions; terms of 1,543
sales and purchases of education loans; and other terms, 1,544
conditions, and provisions of and security for education loans. 1,545
The designated nonprofit corporation ADMINISTRATOR shall 1,547
not purchase any education loan unless the loan conforms to the 1,549
policy guidelines. 1,550
(F) If the director of development determines that 1,552
education loans are not being made in the amount or manner 1,553
anticipated, the designated nonprofit corporation ADMINISTRATOR, 1,554
with the consent of the director, may enter into special 1,556
arrangements with certain eligible lenders pursuant to guidelines 1,557
adopted under this chapter to stimulate the provision of 1,558
education loans.
(G) The designated nonprofit corporation ADMINISTRATOR may 1,561
establish additional procedures and set other terms and 1,563
conditions not inconsistent with the policy guidelines as may be 1,564
necessary or appropriate in connection with the program 1,565
authorized under this chapter.
(H) At least annually by a date specified by the director 1,568
37
of development, the designated nonprofit corporation
ADMINISTRATOR shall provide to the issuing authority and the 1,570
director of development reports on the use of the proceeds of 1,571
obligations.
(I) FOR PURPOSES OF THIS CHAPTER, ANY DESIGNATED 1,573
ADMINISTRATOR OTHER THAN THE NONPROFIT CORPORATION DESIGNATED 1,574
UNDER DIVISION (D) OF SECTION 3351.07 OF THE REVISED CODE SHALL 1,575
BE A PERSON THAT MAINTAINS ITS PRINCIPAL PLACE OF BUSINESS IN THE 1,577
STATE AND THAT HAS AS ITS PRINCIPAL BUSINESS THE MAKING, 1,578
PURCHASING, HOLDING, OR SELLING OF LOANS MADE TO FINANCE 1,579
INDIVIDUALS' COST OF POST-SECONDARY EDUCATION. 1,580
Sec. 3366.04. (A) The issuing authority may issue 1,590
obligations under this section to provide money to make proceeds 1,591
loans to the designated nonprofit corporation ADMINISTRATOR for 1,592
the purpose of acquiring education loans, or needed for 1,593
capitalized interest, for funding reserves, and for paying costs 1,594
and expenses incurred in connection with the issuance, carrying, 1,595
securing, paying, redeeming, or retirement of the obligations or 1,596
any obligations refunded thereby, including payment of costs and 1,597
expenses relating to letters of credit, lines of credit, 1,598
insurance, put agreements, standby purchase agreements, indexing, 1,599
marketing, remarketing and administrative arrangements, interest 1,600
swap or hedging agreements, and any other credit enhancement 1,601
facility as defined in division (H) of section 133.01 of the 1,602
Revised Code, liquidity, remarketing, renewal, or refunding 1,603
arrangements, all of which are authorized by this section. The 1,604
proceeds thereof shall, as provided in the bond proceedings, be 1,605
loaned, or otherwise made available as a proceeds loan, to the 1,606
designated nonprofit corporation ADMINISTRATOR. The issuing 1,607
authority may appoint trustees, paying agents, and transfer 1,609
agents and may retain the services of financial advisors, 1,610
accounting experts, and attorneys, and retain or contract for the 1,611
services of marketing, remarketing, indexing, and administrative 1,612
agents, other consultants, and independent contractors, including 1,613
38
printing services, as are necessary to carry out the provisions 1,614
of this section. The costs of such services are allowable costs 1,615
payable from the proceeds of such obligations. 1,616
(B) The holders or owners of obligations shall have no 1,619
right to have taxes levied by the general assembly, or any moneys 1,620
other than pledged receipts obligated or pledged, and any moneys 1,621
other than pledged receipts shall not be obligated or pledged, 1,622
for the payment of bond service charges. The obligations are not 1,623
debts of the state, bond service charges are payable solely from 1,624
the revenues and funds pledged as pledged receipts for their 1,625
payment, and the right of such holders and owners to payment of 1,626
bond service charges is limited to pledged receipts as provided 1,627
in the bond proceedings, and each such obligation shall bear on 1,628
its face a statement to that effect. No money, including money 1,629
from the general revenue fund, shall be appropriated, obligated, 1,630
or used to pay bond service charges or the costs incurred in the 1,631
administration of this chapter, other than pledged receipts. 1,632
(C) Obligations shall be authorized by order of the 1,635
issuing authority at the request of the designated nonprofit
corporation ADMINISTRATOR and with the approval of the director 1,636
of development, and the bond proceedings shall provide for the 1,638
purpose thereof and the principal amount or amounts, and shall 1,639
provide for or authorize the manner for determining the principal 1,640
maturity or maturities, the interest rate or rates or the maximum 1,641
interest rate, the date of the obligations and the dates of 1,642
payment of interest thereon, their denomination, and the 1,643
establishment within or outside this state of a place or places 1,644
of payment of bond service charges. Sections 9.98 to 9.983 of 1,645
the Revised Code apply to obligations issued under this section. 1,647
The purpose of such obligations may be stated in the bond 1,648
proceedings in terms describing the general purpose to be served. 1,649
The bond proceedings shall also provide, subject to the 1,650
provisions of any other applicable bond proceedings, for the
pledge of, and the granting of a security interest in, all, or 1,651
39
such part as the issuing authority may determine, of the pledged 1,652
receipts to the payment of bond service charges, which pledge may 1,653
be made and security interest granted, subject to the provisions 1,654
of any applicable prior bond proceedings, either prior to or on a 1,655
parity with or subordinate to other expenses, claims, or 1,656
payments, and may be made or granted to secure obligations senior 1,657
or subordinate to, or on a parity with, obligations theretofore 1,658
or thereafter issued, if and to the extent provided in the bond 1,659
proceedings. The pledged receipts so pledged or subject to a 1,660
security interest and thereafter received by the issuing 1,661
authority or the designated nonprofit corporation ADMINISTRATOR 1,662
on behalf of the issuing authority or otherwise received are 1,664
immediately subject to such pledge and security interest without 1,666
any physical delivery thereof or further act, and such pledge and 1,667
security interest are valid, binding, and enforceable against all 1,668
parties having claims of any kind against the state or any 1,669
governmental agency, or against the designated nonprofit 1,670
corporation ADMINISTRATOR, whether or not such parties have 1,672
notice thereof, and shall create a perfected security interest 1,673
for all purposes of Chapter 1309. of the Revised Code, without 1,674
the necessity for separation or delivery or possession of the 1,675
pledged receipts, or for the filing or recording of the bond 1,676
proceedings by which such pledge and security interest are 1,677
created or any certificate, statement, or other document with 1,678
respect thereto; and the pledge of such pledged receipts and the 1,679
security interest are effective and the money therefrom and 1,680
thereof may be applied to the purposes for which pledged without 1,681
necessity for any act of appropriation. Every pledge made and 1,682
security interest granted, and every covenant and agreement made 1,683
with respect thereto in the bond proceedings may therein be 1,684
extended to the benefit of the owners and holders of obligations 1,685
authorized by this section, and to any trustee therefor, for the 1,686
further security of the payment of the bond service charges. 1,687
(D) The bond proceedings may contain additional provisions 1,690
40
as to:
(1) The redemption of obligations prior to maturity at 1,692
such price or prices and under such terms and conditions as are 1,693
provided in the bond proceedings; 1,694
(2) Other terms of the obligations; 1,696
(3) Limitations on the issuance of additional obligations; 1,699
(4) The terms of any trust agreement or indenture securing 1,702
the obligations or under which the same may be issued;
(5) The investment of the proceeds of obligations and 1,704
amounts on deposit in the special funds; 1,705
(6) Any or every provision of the bond proceedings being 1,708
binding upon such officer, board, commission, authority, agency, 1,709
department, or other person or body as may from time to time have 1,710
the authority under law to take such actions as may be necessary 1,711
to perform all or any part of the duty required by such
provision; 1,712
(7) Any provision that may be made in a trust agreement or 1,715
indenture;
(8) Provisions for the use of the proceeds of repayment of 1,718
education loans to acquire additional education loans;
(9) Any other or additional agreements with the holders of 1,721
the obligations, the trustee therefor, or the designated
nonprofit corporation ADMINISTRATOR, relating to the obligations 1,722
or the security therefor, including the assignment of security 1,724
obtained or to be obtained for education loans. 1,725
(E) The obligations and any coupons pertaining to 1,728
obligations shall be in the form specified in the bond
proceedings and shall be signed by or bear the facsimile 1,729
signature of the issuing authority. Any obligations or coupons 1,730
may be executed by the person who, on the date of execution, is 1,731
the proper issuing authority although on the date of such bonds 1,732
or coupons such person was not the issuing authority. In case 1,733
the issuing authority whose signature or a facsimile of whose 1,734
signature appears on any such obligation or coupon ceases to be 1,735
41
the issuing authority before delivery thereof, such signature or 1,736
facsimile is nevertheless valid and sufficient for all purposes 1,737
as if that official had remained the issuing authority until such 1,738
delivery. 1,739
(F) All obligations are negotiable instruments and 1,742
securities under Chapter 1308. of the Revised Code, subject to 1,743
the provisions of the bond proceedings as to registration. The 1,744
obligations may be issued in coupon or in registered form, or 1,745
both, as the issuing authority determines. Provision may be 1,746
made for the registration of any obligations with coupons 1,747
attached thereto as to principal alone or as to both principal 1,748
and interest, their exchange for obligations so registered, and 1,749
for the conversion or reconversion into obligations with coupons 1,750
attached thereto of any obligations registered as to both 1,751
principal and interest, and for reasonable charges for such 1,752
registration, exchange, conversion, and reconversion. 1,753
(G) Obligations may be sold at public sale or at private 1,756
sale, as determined by the issuing authority in the bond 1,757
proceedings.
(H) Pending preparation of definitive obligations, the 1,760
issuing authority may issue interim receipts or certificates 1,761
which shall be exchanged for such definitive obligations. 1,762
(I) In the discretion of the issuing authority, 1,764
obligations may be secured additionally by a trust agreement or 1,765
indenture between the issuing authority and a corporate trustee 1,766
and, if so provided for in the bond proceedings, any other 1,767
necessary or appropriate party. Any such trustee shall be a 1,768
trust company, bank, or national banking association authorized 1,769
to exercise trust powers within the state. Any such agreement or 1,770
indenture may contain the order authorizing the issuance of the 1,771
obligations, any provisions that may be contained in any bond 1,772
proceedings, and other provisions which are customary or 1,773
appropriate in an agreement or indenture of such type, including, 1,774
but not limited to: 1,775
42
(1) Maintenance of each pledge, security interest, and 1,777
trust agreement, indenture, or other instrument comprising part 1,778
of the bond proceedings until the bond service charges on the 1,779
obligations secured thereby have been fully paid, or provision 1,780
therefor has been made in accordance with the bond proceedings; 1,781
(2) In the event of default in any payments required to be 1,784
made by the bond proceedings, or any other agreement of the
issuing authority made as a part of the contract under which the 1,785
obligations were issued, enforcement of such payments or 1,786
agreement by mandamus, the appointment of a receiver, suit in 1,787
equity, action at law, or any combination of the foregoing; 1,788
(3) The rights and remedies of the holders of obligations 1,791
and of the trustee, and provisions for protecting and enforcing 1,792
them, including limitations on rights of individual holders of 1,793
obligations;
(4) The replacement of any obligations that become 1,795
mutilated or are destroyed, lost, or stolen; 1,796
(5) Such other provisions as the trustee and the issuing 1,799
authority agree upon, including limitations, conditions, or 1,800
qualifications relating to the education loans that may be made 1,801
or acquired pursuant to the trust agreement or indenture.
(J) Any holder of obligations or a trustee under the bond 1,804
proceedings, except to the extent that rights are restricted by 1,805
the bond proceedings, may by any suitable form of legal 1,806
proceedings, protect and enforce any rights under the laws of 1,807
this state or granted by such bond proceedings. Such rights
include the right to compel the performance of all duties of the 1,808
issuing authority or the director of development required by this 1,809
chapter or the bond proceedings; to enjoin unlawful activities; 1,810
and, in the event of default with respect to the payment of any 1,811
bond service charges on any obligations or in the performance of 1,812
any covenant or agreement on the part of the issuing authority or 1,813
the director of development in the bond proceedings, to apply to 1,814
a court having jurisdiction to appoint a receiver to receive and 1,815
43
administer the pledged receipts pledged to the payment of the 1,816
bond service charges on such obligations or which are the subject 1,817
of the covenant or agreement, with full power to pay and to 1,818
provide for payment of bond service charges on such obligations 1,819
and with such powers, subject to the direction of the court, as 1,820
are accorded receivers in general equity cases, excluding any 1,821
power to pledge revenues or receipts or other income or moneys, 1,822
other than pledged receipts, and excluding any power to take 1,823
possession of, or cause the sale or otherwise dispose of, any 1,824
property other than the pledged receipts. 1,825
Each duty of the issuing authority, of each governmental 1,827
agency including the director of development, of the designated 1,828
nonprofit corporation ADMINISTRATOR, and of any of the officers, 1,829
members, or employees of any of the foregoing, undertaken 1,831
pursuant to the bond proceedings or any agreement made under 1,832
authority of this chapter, and each duty in every agreement by or 1,833
with the issuing authority under this chapter, each governmental 1,834
agency including the director of development, and the designated 1,835
nonprofit corporation ADMINISTRATOR, is hereby established as a 1,836
duty of the issuing authority, the governmental agency, or the 1,838
designated nonprofit corporation ADMINISTRATOR, respectively, and 1,839
of each such officer, member, or employee having authority to 1,841
perform such duty, specifically enjoined by the law resulting 1,842
from an office, trust, or station within the meaning of section 1,843
2731.01 of the Revised Code. 1,844
The person who is at the time the issuing authority or the 1,847
director of development, or the officers or employees of either 1,848
of them, are not liable in their personal capacities on any 1,849
obligations or any agreements of or with the issuing authority or 1,850
the director of development.
(K) The issuing authority may issue obligations for the 1,853
refunding, including funding and retirement, and advance
refunding with or without payment or redemption prior to 1,854
maturity, of any obligations previously issued. Such obligations 1,855
44
may be issued in amounts sufficient for payment of the principal 1,856
amount of the prior obligations, any redemption premiums thereon, 1,857
principal maturities of any such obligations maturing prior to 1,858
the redemption of the remaining obligations on a parity 1,859
therewith, interest accrued or to accrue to the maturity dates or 1,860
dates of redemption of such obligations, and expenses incurred or 1,861
to be incurred in connection with such issuance and such 1,862
refunding, funding, and retirement. Subject to the bond 1,863
proceedings therefor, the portion of proceeds of the sale of 1,864
obligations issued under this division to be applied to bond 1,865
service charges on the prior obligations shall be credited to an 1,866
appropriate account held by the trustee for such prior or new 1,867
obligations or to the appropriate account in the bond service 1,868
fund for such obligations. Obligations authorized under this 1,869
division shall be deemed to be issued for those purposes for 1,870
which such prior obligations were issued and are subject to the 1,871
provisions of this section pertaining to other obligations, 1,872
except as otherwise provided in this section. 1,873
(L) The authority to issue obligations under this section 1,876
includes authority to issue obligations in the form of bond 1,877
anticipation notes and to renew the same from time to time by the 1,878
issuance of new notes. The holders of such notes or interest 1,879
coupons pertaining thereto shall have a right to be paid solely 1,880
from the pledged receipts and special funds that may be pledged 1,881
to the payment of the bonds anticipated, or from the proceeds of 1,882
such anticipated bonds or renewal notes, or both, as the issuing 1,883
authority provides in the order authorizing such notes. Such 1,884
notes may be additionally secured by covenants of the issuing 1,885
authority and the director of development to the effect that the 1,886
issuing authority and the director of development will do such or 1,887
all things necessary for the issuance of such bonds or renewal 1,888
notes in appropriate amounts, and apply the proceeds thereof to 1,889
the extent necessary, to make full payment of the principal of 1,890
and interest on such notes at the time or times contemplated, as 1,891
45
provided in such order. For such THIS purpose, the issuing 1,893
authority shall issue bonds or renewal notes in such principal 1,894
amount and upon such terms as may be necessary to provide funds 1,895
to pay, when required, the principal of and interest and any 1,897
premium on such notes. Subject to this division, all provisions 1,898
for and references to obligations in this section are applicable 1,899
to notes authorized under this division.
The issuing authority in the bond proceedings authorizing 1,902
the issuance of bond anticipation notes shall set forth for such 1,903
bonds an estimated interest rate and a schedule of principal 1,904
payments for such bonds and the annual maturity dates thereof, 1,905
but this provision does not modify any authority in this section 1,906
to pledge receipts to, to grant a security interest in those 1,907
receipts for the purpose of securing, and to covenant to issue 1,908
bonds to fund, the payment of principal of and interest and any 1,909
premium on such notes, or to provide in the bond proceedings
authorizing the issuance of the anticipated bonds interest rates 1,910
and a schedule of principal payments for such bonds and the 1,911
annual maturity dates thereof which differ from the estimates in 1,912
the bond proceedings authorizing the issuance of such bond 1,913
anticipation notes. 1,914
(M) Obligations issued under this section are lawful 1,917
investments for banks; savings banks; savings and loan
associations; credit union share guarantee corporations; trust 1,919
companies; trustees; fiduciaries; insurance companies, including 1,920
domestic for life and domestic not for life; trustees or other 1,921
officers having charge of sinking and bond retirement or other 1,922
special funds of the state and of subdivisions and taxing 1,923
districts of the state; the commissioners of the sinking fund of 1,924
the state; the administrator of workers' compensation, subject to 1,925
the approval of the workers' compensation board; the state 1,926
teachers retirement system; the public employees retirement 1,927
system; the school employees retirement system; and the Ohio 1,928
police and fire pension fund, notwithstanding any other 1,929
46
provisions of the Revised Code or rules adopted pursuant to those 1,933
provisions by any agency of the state with respect to investments 1,934
by them, and are also eligible as security for the repayment of 1,935
the deposit of public moneys.
(N) Provision may be made in the applicable bond 1,938
proceedings for the establishment of separate accounts in the 1,939
bond service fund and for the application of such accounts only 1,940
to the specified bond service charges on obligations pertinent to 1,941
such accounts and bond service fund and for other accounts 1,942
therein within the general purposes of such fund. Unless 1,943
otherwise provided in any applicable bond proceedings, moneys to 1,944
the credit of or in the several special funds established 1,945
pursuant to this section shall be invested and disbursed as 1,946
provided in the bond proceedings.
(O) The issuing authority shall pledge and grant a 1,949
security interest in all, or such portion as the issuing
authority determines, of the pledged receipts to the payment of 1,950
bond service charges on obligations, and for the establishment 1,951
and maintenance of any reserves, as provided in the bond 1,952
proceedings, and make other provisions therein with respect to 1,953
pledged receipts as authorized by this chapter, which provisions 1,954
are controlling notwithstanding any other provisions of law 1,955
pertaining thereto. 1,956
(P) The obligations, the transfer thereof, and the 1,959
interest, accreted amount, and other income therefrom, including 1,960
any profit made on the sale thereof, shall at all times be free 1,961
from taxation, direct or indirect, within this state.
Sec. 5747.01. Except as otherwise expressly provided or 1,971
clearly appearing from the context, any term used in this chapter 1,972
has the same meaning as when used in a comparable context in the 1,973
Internal Revenue Code, and all other statutes of the United 1,974
States relating to federal income taxes. 1,975
As used in this chapter: 1,977
(A) "Adjusted gross income" or "Ohio adjusted gross 1,979
47
income" means adjusted gross income as defined and used in the 1,980
Internal Revenue Code, adjusted as provided in this section: 1,981
(1) Add interest or dividends on obligations or securities 1,983
of any state or of any political subdivision or authority of any 1,984
state, other than this state and its subdivisions and 1,985
authorities.
(2) Add interest or dividends on obligations of any 1,987
authority, commission, instrumentality, territory, or possession 1,988
of the United States that are exempt from federal income taxes 1,989
but not from state income taxes. 1,990
(3) Deduct interest or dividends on obligations of the 1,992
United States and its territories and possessions or of any 1,993
authority, commission, or instrumentality of the United States to 1,994
the extent included in federal adjusted gross income but exempt 1,995
from state income taxes under the laws of the United States. 1,996
(4) Deduct disability and survivor's benefits to the 1,998
extent included in federal adjusted gross income. 1,999
(5) Deduct benefits under Title II of the Social Security 2,001
Act and tier 1 railroad retirement benefits to the extent 2,002
included in federal adjusted gross income under section 86 of the 2,003
Internal Revenue Code. 2,004
(6) Add, in the case of a taxpayer who is a beneficiary of 2,006
a trust that makes an accumulation distribution as defined in 2,007
section 665 of the Internal Revenue Code, the portion, if any, of 2,008
such distribution that does not exceed the undistributed net 2,009
income of the trust for the three taxable years preceding the 2,010
taxable year in which the distribution is made. "Undistributed 2,011
net income of a trust" means the taxable income of the trust 2,012
increased by (a)(i) the additions to adjusted gross income 2,013
required under division (A) of this section and (ii) the personal 2,014
exemptions allowed to the trust pursuant to section 642(b) of the 2,015
Internal Revenue Code, and decreased by (b)(i) the deductions to 2,016
adjusted gross income required under division (A) of this 2,017
section, (ii) the amount of federal income taxes attributable to 2,018
48
such income, and (iii) the amount of taxable income that has been 2,019
included in the adjusted gross income of a beneficiary by reason 2,020
of a prior accumulation distribution. Any undistributed net 2,021
income included in the adjusted gross income of a beneficiary 2,022
shall reduce the undistributed net income of the trust commencing 2,023
with the earliest years of the accumulation period. 2,024
(7) Deduct the amount of wages and salaries, if any, not 2,026
otherwise allowable as a deduction but that would have been 2,027
allowable as a deduction in computing federal adjusted gross 2,028
income for the taxable year, had the targeted jobs credit allowed 2,029
and determined under sections 38, 51, and 52 of the Internal 2,030
Revenue Code not been in effect. 2,031
(8) Deduct any interest or interest equivalent on public 2,033
obligations and purchase obligations to the extent included in 2,034
federal adjusted gross income. 2,035
(9) Add any loss or deduct any gain resulting from the 2,037
sale, exchange, or other disposition of public obligations to the 2,038
extent included in federal adjusted gross income. 2,039
(10) Regarding tuition credits purchased under Chapter 2,041
3334. of the Revised Code: 2,043
(a) Deduct the following: 2,045
(i) For credits that as of the end of the taxable year 2,048
have not been refunded pursuant to the termination of a tuition
payment contract under section 3334.10 of the Revised Code, the 2,050
amount of income related to the credits, to the extent included 2,051
in federal adjusted gross income;
(ii) For credits that during the taxable year have been 2,054
refunded pursuant to the termination of a tuition payment
contract under section 3334.10 of the Revised Code, the excess of 2,055
the total purchase price of the tuition credits refunded over the 2,056
amount of refund, to the extent the amount of the excess was not 2,057
deducted in determining federal adjusted gross income. 2,058
(b) Add the following: 2,060
(i) For credits that as of the end of the taxable year 2,063
49
have not been refunded pursuant to the termination of a tuition
payment contract under section 3334.10 of the Revised Code, the 2,064
amount of loss related to the credits, to the extent the amount 2,065
of the loss was deducted in determining federal adjusted gross 2,066
income;
(ii) For credits that during the taxable year have been 2,069
refunded pursuant to the termination of a tuition payment
contract under section 3334.10 of the Revised Code, the excess of 2,071
the amount of refund over the purchase price of each tuition 2,072
credit refunded, to the extent not included in federal adjusted 2,073
gross income DEDUCT OR ADD AMOUNTS, AS PROVIDED UNDER SECTION 2,074
5747.70 OF THE REVISED CODE, RELATED TO CONTRIBUTIONS TO VARIABLE 2,076
COLLEGE SAVINGS PROGRAM ACCOUNTS MADE OR TUITION CREDITS 2,077
PURCHASED PURSUANT TO CHAPTER 3334. OF THE REVISED CODE. 2,078
(11)(a) Deduct, to the extent not otherwise allowable as a 2,079
deduction or exclusion in computing federal or Ohio adjusted 2,080
gross income for the taxable year, the amount the taxpayer paid 2,081
during the taxable year for medical care insurance and qualified 2,082
long-term care insurance for the taxpayer, the taxpayer's spouse, 2,083
and dependents. No deduction for medical care insurance under 2,084
division (A)(11) of this section shall be allowed either to any
taxpayer who is eligible to participate in any subsidized health 2,085
plan maintained by any employer of the taxpayer or of the 2,086
taxpayer's spouse, or to any taxpayer who is entitled to, or on 2,087
application would be entitled to, benefits under part A of Title 2,088
XVIII of the "Social Security Act," 49 Stat. 620 (1935), 42 2,089
U.S.C. 301, as amended. For the purposes of division (A)(11)(a) 2,090
of this section, "subsidized health plan" means a health plan for 2,091
which the employer pays any portion of the plan's cost. The 2,092
deduction allowed under division (A)(11)(a) of this section shall 2,093
be the net of any related premium refunds, related premium 2,094
reimbursements, or related insurance premium dividends received 2,095
during the taxable year. 2,096
(b) Deduct, to the extent not otherwise deducted or 2,098
50
excluded in computing federal or Ohio adjusted gross income 2,099
during the taxable year, the amount the taxpayer paid during the 2,100
taxable year, not compensated for by any insurance or otherwise, 2,101
for medical care of the taxpayer, the taxpayer's spouse, and 2,102
dependents, to the extent the expenses exceed seven and one-half 2,103
per cent of the taxpayer's federal adjusted gross income. 2,104
(c) For purposes of division (A)(11) of this section, 2,106
"medical care" has the meaning given in section 213 of the 2,107
Internal Revenue Code, subject to the special rules, limitations, 2,108
and exclusions set forth therein, and "qualified long-term care" 2,109
has the same meaning given in section 7702(B)(b) of the Internal 2,110
Revenue Code.
(12)(a) Deduct any amount included in federal adjusted 2,112
gross income solely because the amount represents a reimbursement 2,113
or refund of expenses that in any year the taxpayer had deducted 2,115
as an itemized deduction pursuant to section 63 of the Internal 2,116
Revenue Code and applicable United States department of the 2,117
treasury regulations. The deduction otherwise allowed under 2,118
division (A)(12)(a) of this section shall be reduced to the 2,119
extent the reimbursement is attributable to an amount the 2,120
taxpayer deducted under this section in any taxable year. 2,121
(b) Add any amount not otherwise included in Ohio adjusted 2,123
gross income for any taxable year to the extent that the amount 2,124
is attributable to the recovery during the taxable year of any 2,125
amount deducted or excluded in computing federal or Ohio adjusted 2,126
gross income in any taxable year. 2,127
(13) Deduct any portion of the deduction described in 2,129
section 1341(a)(2) of the Internal Revenue Code, for repaying 2,130
previously reported income received under a claim of right, that 2,131
meets both of the following requirements: 2,132
(a) It is allowable for repayment of an item that was 2,134
included in the taxpayer's adjusted gross income for a prior 2,135
taxable year and did not qualify for a credit under division (A) 2,136
or (B) of section 5747.05 of the Revised Code for that year; 2,137
51
(b) It does not otherwise reduce the taxpayer's adjusted 2,139
gross income for the current or any other taxable year. 2,140
(14) Deduct an amount equal to the deposits made to, and 2,142
net investment earnings of, a medical savings account during the 2,143
taxable year, in accordance with section 3924.66 of the Revised 2,144
Code. The deduction allowed by division (A)(14) of this section 2,145
does not apply to medical savings account deposits and earnings 2,146
otherwise deducted or excluded for the current or any other 2,147
taxable year from the taxpayer's federal adjusted gross income. 2,148
(15)(a) Add an amount equal to the funds withdrawn from a 2,150
medical savings account during the taxable year, and the net 2,151
investment earnings on those funds, when the funds withdrawn were 2,152
used for any purpose other than to reimburse an account holder 2,153
for, or to pay, eligible medical expenses, in accordance with 2,154
section 3924.66 of the Revised Code;
(b) Add the amounts distributed from a medical savings 2,156
account under division (A)(2) of section 3924.68 of the Revised 2,157
Code during the taxable year. 2,158
(16) Add any amount claimed as a credit under section 2,160
5747.059 of the Revised Code to the extent that such amount 2,161
satisfies either of the following:
(a) The amount was deducted or excluded from the 2,163
computation of the taxpayer's federal adjusted gross income as 2,164
required to be reported for the taxpayer's taxable year under the 2,165
Internal Revenue Code;
(b) The amount resulted in a reduction of the taxpayer's 2,167
federal adjusted gross income as required to be reported for any 2,168
of the taxpayer's taxable years under the Internal Revenue Code. 2,169
(17) Deduct the amount contributed by the taxpayer to an 2,171
individual development account program established by a county 2,172
department of human services pursuant to sections 329.11 to 2,173
329.14 of the Revised Code for the purpose of matching funds 2,174
deposited by program participants. On request of the tax 2,175
commissioner, the taxpayer shall provide any information that, in
52
the tax commissioner's opinion, is necessary to establish the 2,176
amount deducted under division (A)(17) of this section. 2,177
(18) Beginning in taxable year 2001, if the taxpayer is 2,179
married and files a joint return and the combined federal 2,181
adjusted gross income of the taxpayer and the taxpayer's spouse 2,182
for the taxable year does not exceed one hundred thousand
dollars, or if the taxpayer is single and has a federal adjusted 2,183
gross income for the taxable year not exceeding fifty thousand 2,185
dollars, deduct amounts paid during the taxable year for 2,186
qualified tuition and fees paid to an eligible institution for 2,187
the taxpayer, the taxpayer's spouse, or any dependent of the
taxpayer, who is a resident of this state and is enrolled in or 2,188
attending a program that culminates in a degree or diploma at an 2,189
eligible institution. The deduction may be claimed only to the 2,190
extent that qualified tuition and fees are not otherwise deducted 2,191
or excluded for any taxable year from federal or Ohio adjusted 2,192
gross income. The deduction may not be claimed for educational 2,193
expenses for which the taxpayer claims a credit under section 2,194
5747.27 of the Revised Code.
(19) Add any reimbursement received during the taxable 2,196
year of any amount the taxpayer deducted under division (A)(18) 2,197
of this section in any previous taxable year to the extent the 2,198
amount is not otherwise included in Ohio adjusted gross income. 2,199
(B) "Business income" means income arising from 2,201
transactions, activities, and sources in the regular course of a 2,202
trade or business and includes income from tangible and 2,203
intangible property if the acquisition, rental, management, and 2,204
disposition of the property constitute integral parts of the 2,205
regular course of a trade or business operation. 2,206
(C) "Nonbusiness income" means all income other than 2,208
business income and may include, but is not limited to, 2,209
compensation, rents and royalties from real or tangible personal 2,210
property, capital gains, interest, dividends and distributions, 2,211
patent or copyright royalties, or lottery winnings, prizes, and 2,212
53
awards. 2,213
(D) "Compensation" means any form of remuneration paid to 2,215
an employee for personal services. 2,216
(E) "Fiduciary" means a guardian, trustee, executor, 2,218
administrator, receiver, conservator, or any other person acting 2,219
in any fiduciary capacity for any individual, trust, or estate. 2,220
(F) "Fiscal year" means an accounting period of twelve 2,222
months ending on the last day of any month other than December. 2,223
(G) "Individual" means any natural person. 2,225
(H) "Internal Revenue Code" means the "Internal Revenue 2,227
Code of 1986," 100 Stat. 2085, 26 U.S.C.A. 1, as amended. 2,228
(I) "Resident" means: 2,230
(1) An individual who is domiciled in this state, subject 2,232
to section 5747.24 of the Revised Code; 2,233
(2) The estate of a decedent who at the time of death was 2,236
domiciled in this state. The domicile tests of section 5747.24 2,237
of the Revised Code and any election under section 5747.25 of the 2,238
Revised Code are not controlling for purposes of division (I)(2) 2,239
of this section.
(J) "Nonresident" means an individual or estate that is 2,241
not a resident. An individual who is a resident for only part of 2,242
a taxable year is a nonresident for the remainder of that taxable 2,243
year. 2,244
(K) "Pass-through entity" has the same meaning as in 2,246
section 5733.04 of the Revised Code. 2,247
(L) "Return" means the notifications and reports required 2,249
to be filed pursuant to this chapter for the purpose of reporting 2,250
the tax due and includes declarations of estimated tax when so 2,251
required. 2,252
(M) "Taxable year" means the calendar year or the 2,254
taxpayer's fiscal year ending during the calendar year, or 2,255
fractional part thereof, upon which the adjusted gross income is 2,256
calculated pursuant to this chapter. 2,257
(N) "Taxpayer" means any person subject to the tax imposed 2,259
54
by section 5747.02 of the Revised Code or any pass-through entity 2,260
that makes the election under division (D) of section 5747.08 of 2,261
the Revised Code.
(O) "Dependents" means dependents as defined in the 2,263
Internal Revenue Code and as claimed in the taxpayer's federal 2,264
income tax return for the taxable year or which the taxpayer 2,265
would have been permitted to claim had the taxpayer filed a 2,266
federal income tax return. 2,268
(P) "Principal county of employment" means, in the case of 2,270
a nonresident, the county within the state in which a taxpayer 2,271
performs services for an employer or, if those services are 2,272
performed in more than one county, the county in which the major 2,273
portion of the services are performed. 2,274
(Q) As used in sections 5747.50 to 5747.55 of the Revised 2,276
Code:
(1) "Subdivision" means any county, municipal corporation, 2,278
park district, or township. 2,279
(2) "Essential local government purposes" includes all 2,281
functions that any subdivision is required by general law to 2,282
exercise, including like functions that are exercised under a 2,283
charter adopted pursuant to the Ohio Constitution. 2,284
(R) "Overpayment" means any amount already paid that 2,286
exceeds the figure determined to be the correct amount of the 2,287
tax. 2,288
(S) "Taxable income" applies to estates only and means 2,290
taxable income as defined and used in the Internal Revenue Code 2,291
adjusted as follows: 2,292
(1) Add interest or dividends on obligations or securities 2,294
of any state or of any political subdivision or authority of any 2,295
state, other than this state and its subdivisions and 2,296
authorities; 2,297
(2) Add interest or dividends on obligations of any 2,299
authority, commission, instrumentality, territory, or possession 2,300
of the United States that are exempt from federal income taxes 2,301
55
but not from state income taxes; 2,302
(3) Add the amount of personal exemption allowed to the 2,304
estate pursuant to section 642(b) of the Internal Revenue Code; 2,305
(4) Deduct interest or dividends on obligations of the 2,307
United States and its territories and possessions or of any 2,308
authority, commission, or instrumentality of the United States 2,309
that are exempt from state taxes under the laws of the United 2,310
States; 2,311
(5) Deduct the amount of wages and salaries, if any, not 2,313
otherwise allowable as a deduction but that would have been 2,314
allowable as a deduction in computing federal taxable income for 2,315
the taxable year, had the targeted jobs credit allowed under 2,316
sections 38, 51, and 52 of the Internal Revenue Code not been in 2,317
effect; 2,318
(6) Deduct any interest or interest equivalent on public 2,320
obligations and purchase obligations to the extent included in 2,321
federal taxable income; 2,322
(7) Add any loss or deduct any gain resulting from sale, 2,324
exchange, or other disposition of public obligations to the 2,325
extent included in federal taxable income; 2,326
(8) Except in the case of the final return of an estate, 2,328
add any amount deducted by the taxpayer on both its Ohio estate 2,329
tax return pursuant to section 5731.14 of the Revised Code, and 2,330
on its federal income tax return in determining either federal 2,331
adjusted gross income or federal taxable income; 2,332
(9)(a) Deduct any amount included in federal taxable 2,334
income solely because the amount represents a reimbursement or 2,335
refund of expenses that in a previous year the decedent had 2,336
deducted as an itemized deduction pursuant to section 63 of the 2,337
Internal Revenue Code and applicable treasury regulations. The 2,339
deduction otherwise allowed under division (S)(9)(a) of this 2,340
section shall be reduced to the extent the reimbursement is 2,341
attributable to an amount the taxpayer or decedent deducted under 2,342
this section in any taxable year. 2,343
56
(b) Add any amount not otherwise included in Ohio taxable 2,345
income for any taxable year to the extent that the amount is 2,346
attributable to the recovery during the taxable year of any 2,347
amount deducted or excluded in computing federal or Ohio taxable 2,348
income in any taxable year. 2,349
(10) Deduct any portion of the deduction described in 2,351
section 1341(a)(2) of the Internal Revenue Code, for repaying 2,352
previously reported income received under a claim of right, that 2,353
meets both of the following requirements: 2,354
(a) It is allowable for repayment of an item that was 2,356
included in the taxpayer's taxable income or the decedent's 2,357
adjusted gross income for a prior taxable year and did not 2,358
qualify for a credit under division (A) or (B) of section 5747.05 2,359
of the Revised Code for that year. 2,360
(b) It does not otherwise reduce the taxpayer's taxable 2,362
income or the decedent's adjusted gross income for the current or 2,363
any other taxable year. 2,364
(11) Add any amount claimed as a credit under section 2,366
5747.059 of the Revised Code to the extent that the amount 2,367
satisfies either of the following: 2,368
(a) The amount was deducted or excluded from the 2,370
computation of the taxpayer's federal taxable income as required 2,371
to be reported for the taxpayer's taxable year under the Internal 2,372
Revenue Code;
(b) The amount resulted in a reduction in the taxpayer's 2,374
federal taxable income as required to be reported for any of the 2,375
taxpayer's taxable years under the Internal Revenue Code. 2,376
(T) "School district income" and "school district income 2,378
tax" have the same meanings as in section 5748.01 of the Revised 2,379
Code. 2,380
(U) As used in divisions (A)(8), (A)(9), (S)(6), and 2,382
(S)(7) of this section, "public obligations," "purchase 2,383
obligations," and "interest or interest equivalent" have the same 2,384
meanings as in section 5709.76 of the Revised Code. 2,385
57
(V) "Limited liability company" means any limited 2,387
liability company formed under Chapter 1705. of the Revised Code 2,388
or under the laws of any other state. 2,389
(W) "Pass-through entity investor" means any person who, 2,391
during any portion of a taxable year of a pass-through entity, is 2,392
a partner, member, shareholder, or investor in that pass-through 2,393
entity.
(X) "Banking day" has the same meaning as in section 2,395
1304.01 of the Revised Code. 2,396
(Y) "Month" means a calendar month. 2,398
(Z) "Quarter" means the first three months, the second 2,400
three months, the third three months, or the last three months of 2,401
the taxpayer's taxable year.
(AA)(1) "Eligible institution" means a state university or 2,403
state institution of higher education as defined in section 2,404
3345.011 of the Revised Code, or a private, nonprofit college, 2,405
university, or other post-secondary institution located in this 2,406
state that possesses a certificate of authorization issued by the 2,407
Ohio board of regents pursuant to Chapter 1713. of the Revised
Code or a certificate of registration issued by the state board 2,408
of proprietary school registration under Chapter 3332. of the 2,409
Revised Code.
(2) "Qualified tuition and fees" means tuition and fees 2,411
imposed by an eligible institution as a condition of enrollment 2,412
or attendance, not exceeding two thousand five hundred dollars in 2,413
each of the individual's first two years of post-secondary 2,414
education. If the individual is a part-time student, "qualified 2,415
tuition and fees" includes tuition and fees paid for the academic
equivalent of the first two years of post-secondary education 2,416
during a maximum of five taxable years, not exceeding a total of 2,417
five thousand dollars. "Qualified tuition and fees" does not 2,418
include:
(a) Expenses for any course or activity involving sports, 2,420
games, or hobbies unless the course or activity is part of the 2,421
58
individual's degree or diploma program; 2,422
(b) The cost of books, room and board, student activity 2,424
fees, athletic fees, insurance expenses, or other expenses 2,425
unrelated to the individual's academic course of instruction; 2,426
(c) Tuition, fees, or other expenses paid or reimbursed 2,428
through an employer, scholarship, grant in aid, or other 2,429
educational benefit program.
(BB) Any term used in this chapter that is not otherwise 2,431
defined in this section and that is not used in a comparable 2,432
context in the Internal Revenue Code and other statutes of the 2,433
United States relating to federal income taxes has the same 2,434
meaning as in section 5733.40 of the Revised Code. 2,435
THIS IS AN INTERIM SECTION EFFECTIVE UNTIL JULY 1, 2000. 2,437
Sec. 5747.70. (A) IN COMPUTING OHIO ADJUSTED GROSS 2,439
INCOME, A DEDUCTION FROM FEDERAL ADJUSTED GROSS INCOME IS ALLOWED 2,440
TO A CONTRIBUTOR FOR THE AMOUNT CONTRIBUTED DURING THE TAXABLE 2,441
YEAR TO A VARIABLE COLLEGE SAVINGS PROGRAM ACCOUNT AND TO A 2,443
PURCHASER OF TUITION CREDITS UNDER THE OHIO COLLEGE SAVINGS 2,444
PROGRAM CREATED BY CHAPTER 3334. OF THE REVISED CODE TO THE 2,446
EXTENT THAT THE AMOUNTS OF SUCH CONTRIBUTIONS AND PURCHASES WERE 2,447
NOT DEDUCTED IN DETERMINING THE CONTRIBUTOR'S OR PURCHASER'S 2,448
FEDERAL ADJUSTED GROSS INCOME FOR THE TAXABLE YEAR. THE COMBINED
AMOUNT OF CONTRIBUTIONS AND PURCHASES DEDUCTED IN ANY TAXABLE 2,449
YEAR BY A TAXPAYER OR THE TAXPAYER AND THE TAXPAYER'S SPOUSE, 2,450
REGARDLESS OF WHETHER THE TAXPAYER AND THE TAXPAYER'S SPOUSE FILE 2,451
SEPARATE RETURNS OR A JOINT RETURN, IS LIMITED TO TWO THOUSAND 2,453
DOLLARS FOR EACH BENEFICIARY FOR WHOM CONTRIBUTIONS OR PURCHASES 2,454
ARE MADE. IF THE COMBINED ANNUAL CONTRIBUTIONS AND PURCHASES FOR 2,455
A BENEFICIARY EXCEED TWO THOUSAND DOLLARS, THE EXCESS MAY BE 2,456
CARRIED FORWARD AND DEDUCTED IN FUTURE TAXABLE YEARS UNTIL THE 2,457
CONTRIBUTIONS AND PURCHASES HAVE BEEN FULLY DEDUCTED. 2,458
(B) IN COMPUTING OHIO ADJUSTED GROSS INCOME, A DEDUCTION 2,460
FROM FEDERAL ADJUSTED GROSS INCOME IS ALLOWED FOR: 2,461
(1) INCOME RELATED TO TUITION CREDITS AND CONTRIBUTIONS 2,463
59
THAT AS OF THE END OF THE TAXABLE YEAR HAVE NOT BEEN REFUNDED 2,464
PURSUANT TO THE TERMINATION OF A TUITION PAYMENT CONTRACT OR 2,465
VARIABLE COLLEGE SAVINGS PROGRAM ACCOUNT UNDER SECTION 3334.10 OF 2,466
THE REVISED CODE, TO THE EXTENT THAT SUCH INCOME IS INCLUDED IN 2,467
FEDERAL ADJUSTED GROSS INCOME. 2,468
(2) THE EXCESS OF THE TOTAL PURCHASE PRICE OF TUITION 2,470
CREDITS REFUNDED DURING THE TAXABLE YEAR PURSUANT TO THE 2,471
TERMINATION OF A TUITION PAYMENT CONTRACT UNDER SECTION 3334.10 2,472
OF THE REVISED CODE OVER THE AMOUNT OF THE REFUND, TO THE EXTENT 2,473
THE AMOUNT OF THE EXCESS WAS NOT DEDUCTED IN DETERMINING FEDERAL 2,474
ADJUSTED GROSS INCOME. DIVISION (B)(2) OF THIS SECTION APPLIES 2,475
ONLY TO CREDITS FOR WHICH NO DEDUCTION WAS ALLOWABLE UNDER 2,476
DIVISION (A) OF THIS SECTION.
(C) IN COMPUTING OHIO ADJUSTED GROSS INCOME, THERE SHALL 2,478
BE ADDED TO FEDERAL ADJUSTED GROSS INCOME THE AMOUNT OF LOSS 2,479
RELATED TO TUITION CREDITS AND CONTRIBUTIONS THAT AS OF THE END 2,480
OF THE TAXABLE YEAR HAVE NOT BEEN REFUNDED PURSUANT TO THE 2,481
TERMINATION OF A TUITION PAYMENT CONTRACT OR VARIABLE COLLEGE 2,482
SAVINGS PROGRAM ACCOUNT UNDER SECTION 3334.10 OF THE REVISED 2,483
CODE, TO THE EXTENT THAT SUCH LOSS WAS DEDUCTED IN DETERMINING 2,484
FEDERAL ADJUSTED GROSS INCOME.
(D) FOR TAXABLE YEARS IN WHICH DISTRIBUTIONS OR REFUNDS 2,486
ARE MADE UNDER A TUITION PAYMENT OR VARIABLE COLLEGE SAVINGS 2,487
PROGRAM CONTRACT FOR ANY REASON OTHER THAN PAYMENT OF TUITION OR 2,488
OTHER HIGHER EDUCATION EXPENSES, OR THE BENEFICIARY'S DEATH, 2,489
DISABILITY, OR RECEIPT OF A SCHOLARSHIP AS DESCRIBED IN SECTION 2,490
3334.10 OF THE REVISED CODE:
(1) IF THE DISTRIBUTION OR REFUND IS PAID TO THE PURCHASER 2,492
OR CONTRIBUTOR OR BENEFICIARY, ANY PORTION OF THE DISTRIBUTION OR 2,493
REFUND NOT INCLUDED IN THE RECIPIENT'S FEDERAL ADJUSTED GROSS 2,494
INCOME SHALL BE ADDED TO THE RECIPIENT'S FEDERAL ADJUSTED GROSS 2,495
INCOME IN DETERMINING THE RECIPIENT'S OHIO ADJUSTED GROSS INCOME, 2,496
EXCEPT THAT THE AMOUNT ADDED SHALL NOT EXCEED AMOUNTS PREVIOUSLY 2,497
DEDUCTED UNDER DIVISION (A) OF THIS SECTION LESS ANY AMOUNTS 2,498
60
ADDED UNDER DIVISION (D)(1) OF THIS SECTION IN A PRIOR TAXABLE 2,499
YEAR.
(2) IF AMOUNTS PAID BY A PURCHASER OR CONTRIBUTOR ON OR 2,501
AFTER JANUARY 1, 2000, ARE DISTRIBUTED OR REFUNDED TO SOMEONE 2,502
OTHER THAN THE PURCHASER OR CONTRIBUTOR OR BENEFICIARY, THE 2,504
AMOUNT OF THE PAYMENT NOT INCLUDED IN THE RECIPIENT'S FEDERAL 2,505
ADJUSTED GROSS INCOME, LESS ANY AMOUNTS ADDED UNDER DIVISION (D) 2,506
OF THIS SECTION IN A PRIOR TAXABLE YEAR, SHALL BE ADDED TO THE 2,507
RECIPIENT'S FEDERAL ADJUSTED GROSS INCOME IN DETERMINING THE
RECIPIENT'S OHIO ADJUSTED GROSS INCOME. 2,508
Section 2. That existing sections 3334.01, 3334.02, 2,510
3334.08, 3334.10, 3334.11, 3334.12, 3334.15, 3366.01, 3366.03, 2,511
3366.04, and 5747.01 of the Revised Code are hereby repealed. 2,513
Section 3. That section 5747.01 of the Revised Code, as 2,515
amended by H.B. 471 of the 123rd General Assembly, be amended to 2,517
read as follows:
Sec. 5747.01. Except as otherwise expressly provided or 2,526
clearly appearing from the context, any term used in this chapter 2,527
has the same meaning as when used in a comparable context in the 2,528
Internal Revenue Code, and all other statutes of the United 2,529
States relating to federal income taxes. 2,530
As used in this chapter: 2,532
(A) "Adjusted gross income" or "Ohio adjusted gross 2,534
income" means adjusted gross income as defined and used in the 2,535
Internal Revenue Code, adjusted as provided in this section: 2,536
(1) Add interest or dividends on obligations or securities 2,538
of any state or of any political subdivision or authority of any 2,539
state, other than this state and its subdivisions and 2,540
authorities.
(2) Add interest or dividends on obligations of any 2,542
authority, commission, instrumentality, territory, or possession 2,543
of the United States that are exempt from federal income taxes 2,544
but not from state income taxes. 2,545
(3) Deduct interest or dividends on obligations of the 2,547
61
United States and its territories and possessions or of any 2,548
authority, commission, or instrumentality of the United States to 2,549
the extent included in federal adjusted gross income but exempt 2,550
from state income taxes under the laws of the United States. 2,551
(4) Deduct disability and survivor's benefits to the 2,553
extent included in federal adjusted gross income. 2,554
(5) Deduct benefits under Title II of the Social Security 2,556
Act and tier 1 railroad retirement benefits to the extent 2,557
included in federal adjusted gross income under section 86 of the 2,558
Internal Revenue Code. 2,559
(6) Add, in the case of a taxpayer who is a beneficiary of 2,561
a trust that makes an accumulation distribution as defined in 2,562
section 665 of the Internal Revenue Code, the portion, if any, of 2,563
such distribution that does not exceed the undistributed net 2,564
income of the trust for the three taxable years preceding the 2,565
taxable year in which the distribution is made. "Undistributed 2,566
net income of a trust" means the taxable income of the trust 2,567
increased by (a)(i) the additions to adjusted gross income 2,568
required under division (A) of this section and (ii) the personal 2,569
exemptions allowed to the trust pursuant to section 642(b) of the 2,570
Internal Revenue Code, and decreased by (b)(i) the deductions to 2,571
adjusted gross income required under division (A) of this 2,572
section, (ii) the amount of federal income taxes attributable to 2,573
such income, and (iii) the amount of taxable income that has been 2,574
included in the adjusted gross income of a beneficiary by reason 2,575
of a prior accumulation distribution. Any undistributed net 2,576
income included in the adjusted gross income of a beneficiary 2,577
shall reduce the undistributed net income of the trust commencing 2,578
with the earliest years of the accumulation period. 2,579
(7) Deduct the amount of wages and salaries, if any, not 2,581
otherwise allowable as a deduction but that would have been 2,582
allowable as a deduction in computing federal adjusted gross 2,583
income for the taxable year, had the targeted jobs credit allowed 2,584
and determined under sections 38, 51, and 52 of the Internal 2,585
62
Revenue Code not been in effect. 2,586
(8) Deduct any interest or interest equivalent on public 2,588
obligations and purchase obligations to the extent included in 2,589
federal adjusted gross income. 2,590
(9) Add any loss or deduct any gain resulting from the 2,592
sale, exchange, or other disposition of public obligations to the 2,593
extent included in federal adjusted gross income. 2,594
(10) Regarding tuition credits purchased under Chapter 2,596
3334. of the Revised Code: 2,598
(a) Deduct the following: 2,600
(i) For credits that as of the end of the taxable year 2,603
have not been refunded pursuant to the termination of a tuition
payment contract under section 3334.10 of the Revised Code, the 2,605
amount of income related to the credits, to the extent included 2,606
in federal adjusted gross income;
(ii) For credits that during the taxable year have been 2,609
refunded pursuant to the termination of a tuition payment
contract under section 3334.10 of the Revised Code, the excess of 2,610
the total purchase price of the tuition credits refunded over the 2,611
amount of refund, to the extent the amount of the excess was not 2,612
deducted in determining federal adjusted gross income. 2,613
(b) Add the following: 2,615
(i) For credits that as of the end of the taxable year 2,618
have not been refunded pursuant to the termination of a tuition
payment contract under section 3334.10 of the Revised Code, the 2,619
amount of loss related to the credits, to the extent the amount 2,620
of the loss was deducted in determining federal adjusted gross 2,621
income;
(ii) For credits that during the taxable year have been 2,624
refunded pursuant to the termination of a tuition payment
contract under section 3334.10 of the Revised Code, the excess of 2,626
the amount of refund over the purchase price of each tuition 2,627
credit refunded, to the extent not included in federal adjusted 2,628
gross income DEDUCT OR ADD AMOUNTS, AS PROVIDED UNDER SECTION 2,629
63
5747.70 OF THE REVISED CODE, RELATED TO CONTRIBUTIONS TO VARIABLE 2,631
COLLEGE SAVINGS PROGRAM ACCOUNTS MADE OR TUITION CREDITS 2,632
PURCHASED PURSUANT TO CHAPTER 3334. OF THE REVISED CODE. 2,633
(11)(a) Deduct, to the extent not otherwise allowable as a 2,635
deduction or exclusion in computing federal or Ohio adjusted 2,636
gross income for the taxable year, the amount the taxpayer paid 2,637
during the taxable year for medical care insurance and qualified 2,638
long-term care insurance for the taxpayer, the taxpayer's spouse, 2,639
and dependents. No deduction for medical care insurance under 2,640
division (A)(11) of this section shall be allowed either to any
taxpayer who is eligible to participate in any subsidized health 2,641
plan maintained by any employer of the taxpayer or of the 2,642
taxpayer's spouse, or to any taxpayer who is entitled to, or on 2,643
application would be entitled to, benefits under part A of Title 2,644
XVIII of the "Social Security Act," 49 Stat. 620 (1935), 42 2,645
U.S.C. 301, as amended. For the purposes of division (A)(11)(a) 2,646
of this section, "subsidized health plan" means a health plan for 2,647
which the employer pays any portion of the plan's cost. The 2,648
deduction allowed under division (A)(11)(a) of this section shall 2,649
be the net of any related premium refunds, related premium 2,650
reimbursements, or related insurance premium dividends received 2,651
during the taxable year. 2,652
(b) Deduct, to the extent not otherwise deducted or 2,654
excluded in computing federal or Ohio adjusted gross income 2,655
during the taxable year, the amount the taxpayer paid during the 2,656
taxable year, not compensated for by any insurance or otherwise, 2,657
for medical care of the taxpayer, the taxpayer's spouse, and 2,658
dependents, to the extent the expenses exceed seven and one-half 2,659
per cent of the taxpayer's federal adjusted gross income. 2,660
(c) For purposes of division (A)(11) of this section, 2,662
"medical care" has the meaning given in section 213 of the 2,663
Internal Revenue Code, subject to the special rules, limitations, 2,664
and exclusions set forth therein, and "qualified long-term care" 2,665
has the same meaning given in section 7702(B)(b) of the Internal 2,666
64
Revenue Code.
(12)(a) Deduct any amount included in federal adjusted 2,668
gross income solely because the amount represents a reimbursement 2,669
or refund of expenses that in any year the taxpayer had deducted 2,671
as an itemized deduction pursuant to section 63 of the Internal 2,672
Revenue Code and applicable United States department of the 2,673
treasury regulations. The deduction otherwise allowed under 2,674
division (A)(12)(a) of this section shall be reduced to the 2,675
extent the reimbursement is attributable to an amount the 2,676
taxpayer deducted under this section in any taxable year. 2,677
(b) Add any amount not otherwise included in Ohio adjusted 2,679
gross income for any taxable year to the extent that the amount 2,680
is attributable to the recovery during the taxable year of any 2,681
amount deducted or excluded in computing federal or Ohio adjusted 2,682
gross income in any taxable year. 2,683
(13) Deduct any portion of the deduction described in 2,685
section 1341(a)(2) of the Internal Revenue Code, for repaying 2,686
previously reported income received under a claim of right, that 2,687
meets both of the following requirements: 2,688
(a) It is allowable for repayment of an item that was 2,690
included in the taxpayer's adjusted gross income for a prior 2,691
taxable year and did not qualify for a credit under division (A) 2,692
or (B) of section 5747.05 of the Revised Code for that year; 2,693
(b) It does not otherwise reduce the taxpayer's adjusted 2,695
gross income for the current or any other taxable year. 2,696
(14) Deduct an amount equal to the deposits made to, and 2,698
net investment earnings of, a medical savings account during the 2,699
taxable year, in accordance with section 3924.66 of the Revised 2,700
Code. The deduction allowed by division (A)(14) of this section 2,701
does not apply to medical savings account deposits and earnings 2,702
otherwise deducted or excluded for the current or any other 2,703
taxable year from the taxpayer's federal adjusted gross income. 2,704
(15)(a) Add an amount equal to the funds withdrawn from a 2,706
medical savings account during the taxable year, and the net 2,707
65
investment earnings on those funds, when the funds withdrawn were 2,708
used for any purpose other than to reimburse an account holder 2,709
for, or to pay, eligible medical expenses, in accordance with 2,710
section 3924.66 of the Revised Code;
(b) Add the amounts distributed from a medical savings 2,712
account under division (A)(2) of section 3924.68 of the Revised 2,713
Code during the taxable year. 2,714
(16) Add any amount claimed as a credit under section 2,716
5747.059 of the Revised Code to the extent that such amount 2,717
satisfies either of the following:
(a) The amount was deducted or excluded from the 2,719
computation of the taxpayer's federal adjusted gross income as 2,720
required to be reported for the taxpayer's taxable year under the 2,721
Internal Revenue Code;
(b) The amount resulted in a reduction of the taxpayer's 2,723
federal adjusted gross income as required to be reported for any 2,724
of the taxpayer's taxable years under the Internal Revenue Code. 2,725
(17) Deduct the amount contributed by the taxpayer to an 2,727
individual development account program established by a county 2,728
department of job and family services pursuant to sections 329.11 2,729
to 329.14 of the Revised Code for the purpose of matching funds 2,731
deposited by program participants. On request of the tax 2,733
commissioner, the taxpayer shall provide any information that, in
the tax commissioner's opinion, is necessary to establish the 2,734
amount deducted under division (A)(17) of this section. 2,736
(18) Beginning in taxable year 2001, if the taxpayer is 2,738
married and files a joint return and the combined federal 2,740
adjusted gross income of the taxpayer and the taxpayer's spouse 2,741
for the taxable year does not exceed one hundred thousand
dollars, or if the taxpayer is single and has a federal adjusted 2,742
gross income for the taxable year not exceeding fifty thousand 2,744
dollars, deduct amounts paid during the taxable year for 2,745
qualified tuition and fees paid to an eligible institution for 2,746
the taxpayer, the taxpayer's spouse, or any dependent of the
66
taxpayer, who is a resident of this state and is enrolled in or 2,747
attending a program that culminates in a degree or diploma at an 2,748
eligible institution. The deduction may be claimed only to the 2,749
extent that qualified tuition and fees are not otherwise deducted 2,750
or excluded for any taxable year from federal or Ohio adjusted 2,751
gross income. The deduction may not be claimed for educational 2,752
expenses for which the taxpayer claims a credit under section 2,753
5747.27 of the Revised Code.
(19) Add any reimbursement received during the taxable 2,755
year of any amount the taxpayer deducted under division (A)(18) 2,756
of this section in any previous taxable year to the extent the 2,757
amount is not otherwise included in Ohio adjusted gross income. 2,758
(B) "Business income" means income arising from 2,760
transactions, activities, and sources in the regular course of a 2,761
trade or business and includes income from tangible and 2,762
intangible property if the acquisition, rental, management, and 2,763
disposition of the property constitute integral parts of the 2,764
regular course of a trade or business operation. 2,765
(C) "Nonbusiness income" means all income other than 2,767
business income and may include, but is not limited to, 2,768
compensation, rents and royalties from real or tangible personal 2,769
property, capital gains, interest, dividends and distributions, 2,770
patent or copyright royalties, or lottery winnings, prizes, and 2,771
awards. 2,772
(D) "Compensation" means any form of remuneration paid to 2,774
an employee for personal services. 2,775
(E) "Fiduciary" means a guardian, trustee, executor, 2,777
administrator, receiver, conservator, or any other person acting 2,778
in any fiduciary capacity for any individual, trust, or estate. 2,779
(F) "Fiscal year" means an accounting period of twelve 2,781
months ending on the last day of any month other than December. 2,782
(G) "Individual" means any natural person. 2,784
(H) "Internal Revenue Code" means the "Internal Revenue 2,786
Code of 1986," 100 Stat. 2085, 26 U.S.C.A. 1, as amended. 2,787
67
(I) "Resident" means: 2,789
(1) An individual who is domiciled in this state, subject 2,791
to section 5747.24 of the Revised Code; 2,792
(2) The estate of a decedent who at the time of death was 2,795
domiciled in this state. The domicile tests of section 5747.24 2,796
of the Revised Code and any election under section 5747.25 of the 2,797
Revised Code are not controlling for purposes of division (I)(2) 2,798
of this section.
(J) "Nonresident" means an individual or estate that is 2,800
not a resident. An individual who is a resident for only part of 2,801
a taxable year is a nonresident for the remainder of that taxable 2,802
year. 2,803
(K) "Pass-through entity" has the same meaning as in 2,805
section 5733.04 of the Revised Code. 2,806
(L) "Return" means the notifications and reports required 2,808
to be filed pursuant to this chapter for the purpose of reporting 2,809
the tax due and includes declarations of estimated tax when so 2,810
required. 2,811
(M) "Taxable year" means the calendar year or the 2,813
taxpayer's fiscal year ending during the calendar year, or 2,814
fractional part thereof, upon which the adjusted gross income is 2,815
calculated pursuant to this chapter. 2,816
(N) "Taxpayer" means any person subject to the tax imposed 2,818
by section 5747.02 of the Revised Code or any pass-through entity 2,819
that makes the election under division (D) of section 5747.08 of 2,820
the Revised Code.
(O) "Dependents" means dependents as defined in the 2,822
Internal Revenue Code and as claimed in the taxpayer's federal 2,823
income tax return for the taxable year or which the taxpayer 2,824
would have been permitted to claim had the taxpayer filed a 2,825
federal income tax return. 2,827
(P) "Principal county of employment" means, in the case of 2,829
a nonresident, the county within the state in which a taxpayer 2,830
performs services for an employer or, if those services are 2,831
68
performed in more than one county, the county in which the major 2,832
portion of the services are performed. 2,833
(Q) As used in sections 5747.50 to 5747.55 of the Revised 2,835
Code:
(1) "Subdivision" means any county, municipal corporation, 2,837
park district, or township. 2,838
(2) "Essential local government purposes" includes all 2,840
functions that any subdivision is required by general law to 2,841
exercise, including like functions that are exercised under a 2,842
charter adopted pursuant to the Ohio Constitution. 2,843
(R) "Overpayment" means any amount already paid that 2,845
exceeds the figure determined to be the correct amount of the 2,846
tax. 2,847
(S) "Taxable income" applies to estates only and means 2,849
taxable income as defined and used in the Internal Revenue Code 2,850
adjusted as follows: 2,851
(1) Add interest or dividends on obligations or securities 2,853
of any state or of any political subdivision or authority of any 2,854
state, other than this state and its subdivisions and 2,855
authorities; 2,856
(2) Add interest or dividends on obligations of any 2,858
authority, commission, instrumentality, territory, or possession 2,859
of the United States that are exempt from federal income taxes 2,860
but not from state income taxes; 2,861
(3) Add the amount of personal exemption allowed to the 2,863
estate pursuant to section 642(b) of the Internal Revenue Code; 2,864
(4) Deduct interest or dividends on obligations of the 2,866
United States and its territories and possessions or of any 2,867
authority, commission, or instrumentality of the United States 2,868
that are exempt from state taxes under the laws of the United 2,869
States; 2,870
(5) Deduct the amount of wages and salaries, if any, not 2,872
otherwise allowable as a deduction but that would have been 2,873
allowable as a deduction in computing federal taxable income for 2,874
69
the taxable year, had the targeted jobs credit allowed under 2,875
sections 38, 51, and 52 of the Internal Revenue Code not been in 2,876
effect; 2,877
(6) Deduct any interest or interest equivalent on public 2,879
obligations and purchase obligations to the extent included in 2,880
federal taxable income; 2,881
(7) Add any loss or deduct any gain resulting from sale, 2,883
exchange, or other disposition of public obligations to the 2,884
extent included in federal taxable income; 2,885
(8) Except in the case of the final return of an estate, 2,887
add any amount deducted by the taxpayer on both its Ohio estate 2,888
tax return pursuant to section 5731.14 of the Revised Code, and 2,889
on its federal income tax return in determining either federal 2,890
adjusted gross income or federal taxable income; 2,891
(9)(a) Deduct any amount included in federal taxable 2,893
income solely because the amount represents a reimbursement or 2,894
refund of expenses that in a previous year the decedent had 2,895
deducted as an itemized deduction pursuant to section 63 of the 2,896
Internal Revenue Code and applicable treasury regulations. The 2,898
deduction otherwise allowed under division (S)(9)(a) of this 2,899
section shall be reduced to the extent the reimbursement is 2,900
attributable to an amount the taxpayer or decedent deducted under 2,901
this section in any taxable year. 2,902
(b) Add any amount not otherwise included in Ohio taxable 2,904
income for any taxable year to the extent that the amount is 2,905
attributable to the recovery during the taxable year of any 2,906
amount deducted or excluded in computing federal or Ohio taxable 2,907
income in any taxable year. 2,908
(10) Deduct any portion of the deduction described in 2,910
section 1341(a)(2) of the Internal Revenue Code, for repaying 2,911
previously reported income received under a claim of right, that 2,912
meets both of the following requirements: 2,913
(a) It is allowable for repayment of an item that was 2,915
included in the taxpayer's taxable income or the decedent's 2,916
70
adjusted gross income for a prior taxable year and did not 2,917
qualify for a credit under division (A) or (B) of section 5747.05 2,918
of the Revised Code for that year. 2,919
(b) It does not otherwise reduce the taxpayer's taxable 2,921
income or the decedent's adjusted gross income for the current or 2,922
any other taxable year. 2,923
(11) Add any amount claimed as a credit under section 2,925
5747.059 of the Revised Code to the extent that the amount 2,926
satisfies either of the following: 2,927
(a) The amount was deducted or excluded from the 2,929
computation of the taxpayer's federal taxable income as required 2,930
to be reported for the taxpayer's taxable year under the Internal 2,931
Revenue Code;
(b) The amount resulted in a reduction in the taxpayer's 2,933
federal taxable income as required to be reported for any of the 2,934
taxpayer's taxable years under the Internal Revenue Code. 2,935
(T) "School district income" and "school district income 2,937
tax" have the same meanings as in section 5748.01 of the Revised 2,938
Code. 2,939
(U) As used in divisions (A)(8), (A)(9), (S)(6), and 2,941
(S)(7) of this section, "public obligations," "purchase 2,942
obligations," and "interest or interest equivalent" have the same 2,943
meanings as in section 5709.76 of the Revised Code. 2,944
(V) "Limited liability company" means any limited 2,946
liability company formed under Chapter 1705. of the Revised Code 2,947
or under the laws of any other state. 2,948
(W) "Pass-through entity investor" means any person who, 2,950
during any portion of a taxable year of a pass-through entity, is 2,951
a partner, member, shareholder, or investor in that pass-through 2,952
entity.
(X) "Banking day" has the same meaning as in section 2,954
1304.01 of the Revised Code. 2,955
(Y) "Month" means a calendar month. 2,957
(Z) "Quarter" means the first three months, the second 2,959
71
three months, the third three months, or the last three months of 2,960
the taxpayer's taxable year.
(AA)(1) "Eligible institution" means a state university or 2,962
state institution of higher education as defined in section 2,963
3345.011 of the Revised Code, or a private, nonprofit college, 2,964
university, or other post-secondary institution located in this 2,965
state that possesses a certificate of authorization issued by the 2,966
Ohio board of regents pursuant to Chapter 1713. of the Revised
Code or a certificate of registration issued by the state board 2,967
of proprietary school registration under Chapter 3332. of the 2,968
Revised Code.
(2) "Qualified tuition and fees" means tuition and fees 2,970
imposed by an eligible institution as a condition of enrollment 2,971
or attendance, not exceeding two thousand five hundred dollars in 2,972
each of the individual's first two years of post-secondary 2,973
education. If the individual is a part-time student, "qualified 2,974
tuition and fees" includes tuition and fees paid for the academic
equivalent of the first two years of post-secondary education 2,975
during a maximum of five taxable years, not exceeding a total of 2,976
five thousand dollars. "Qualified tuition and fees" does not 2,977
include:
(a) Expenses for any course or activity involving sports, 2,979
games, or hobbies unless the course or activity is part of the 2,980
individual's degree or diploma program; 2,981
(b) The cost of books, room and board, student activity 2,983
fees, athletic fees, insurance expenses, or other expenses 2,984
unrelated to the individual's academic course of instruction; 2,985
(c) Tuition, fees, or other expenses paid or reimbursed 2,987
through an employer, scholarship, grant in aid, or other 2,988
educational benefit program.
(BB) Any term used in this chapter that is not otherwise 2,990
defined in this section and that is not used in a comparable 2,991
context in the Internal Revenue Code and other statutes of the 2,992
United States relating to federal income taxes has the same 2,993
72
meaning as in section 5733.40 of the Revised Code. 2,994
Section 4. That all existing versions of section 5747.01 2,996
of the Revised Code are hereby repealed. 2,997
Section 5. Sections 3 and 4 of this act shall take effect 2,999
July 1, 2000. 3,000
Section 6. Section 5747.01 of the Revised Code, as amended 3,001
by this act, and section 5747.70 of the Revised Code, as enacted 3,002
by this act, apply to tax years beginning on and after January 1, 3,003
2000.
Section 7. Section 5747.01 of the Revised Code is 3,005
presented in Section 1 of this act as a composite of the section 3,007
as amended by both Am. Sub. H.B. 4 and Am. Sub. H.B. 282 of the 3,008
123rd General Assembly, with the new language of neither of the 3,009
acts shown in capital letters. This is in recognition of the 3,010
principle stated in division (B) of section 1.52 of the Revised 3,011
Code that such amendments are to be harmonized where not 3,012
substantively irreconcilable and constitutes a legislative 3,013
finding that such is the resulting version in effect prior to the 3,014
effective date of this act.