As Introduced 1
123rd General Assembly 4
Regular Session S. B. No. 206 5
1999-2000 6
SENATOR CARNES 8
_________________________________________________________________ 10
A B I L L
To provide for the implementation of Sections 2n and 12
17 of Article VIII of the Constitution of the 13
State of Ohio, to make an appropriation, and to 14
declare an emergency.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO: 16
Section 1. (A) As used in this section and in the 18
applicable bond proceedings unless otherwise provided: 19
(1) "Bond proceedings" means the resolutions, agreements, 21
and credit enhancement facilities, and amendments and supplements 22
to them, or any one or more or combination of them, authorizing, 23
awarding, or providing for the terms and conditions applicable to 24
or providing for the security or liquidity of, obligations, and 25
the provisions contained in those obligations. 26
(2) "Bond service fund" means the fund created by division 28
(P) of this section, and any accounts in that fund, including all 29
moneys and investments, and earnings from investments, credited 30
and to be credited to that fund and accounts as and to the extent 31
provided in the bond proceedings. 32
(3) "Capital facilities" means capital facilities that are 34
capital facilities for a system of common schools throughout the 35
state. 36
(4) "Costs of capital facilities" means the costs of 38
acquiring, constructing, reconstructing, rehabilitating, 39
remodeling, renovating, enlarging, improving, equipping, or 40
furnishing capital facilities, and of the financing of those 41
costs. Costs of capital facilities include without limitation 42
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the cost of clearance and preparation of the site and of any land 43
to be used in connection with capital facilities, the cost of any 44
indemnity and surety bonds and premiums on insurance, all related 45
direct administrative expenses and allocable portions of direct 46
costs of the state and the using school district and the Ohio 47
School Facilities Commission, costs of engineering and 48
architectural services, designs, plans, specifications, surveys, 49
and estimates of cost, financing costs, interest on obligations 50
from their date to the time when interest is to be paid from 51
sources other than proceeds of obligations, amounts necessary to 52
establish any reserves as required by the bond proceedings, the 53
reimbursement of all moneys advanced or applied by or borrowed 54
from the using school district or any governmental agency for the 55
payment of any item of costs of capital facilities, and all other 56
expenses necessary or incident to planning or determining 57
feasibility or practicability with respect to capital facilities, 58
and such other expenses as may be necessary or incident to the 59
acquisition, construction, reconstruction, rehabilitation, 60
remodeling, renovation, enlargement, improvement, equipment, and 61
furnishing of capital facilities, the financing of those costs, 62
and the placing of the capital facilities in use and operation, 63
including any one, part of, or combination of those classes of 64
costs and expenses.
(5) "Credit enhancement facilities," "financing costs," 66
and "interest" or "interest equivalent" have the same meanings as 67
in section 133.01 of the Revised Code. 68
(6) "Debt service" means principal, including any 70
mandatory sinking fund or redemption requirements for retirement 71
of obligations, interest and other accreted amounts, interest 72
equivalent, and any redemption premium, payable on obligations. 73
(7) "Issuing authority" means the Treasurer of State. 75
(8) "Net proceeds" means amounts received from the sale of 77
obligations, excluding: amounts used to refund or retire 78
outstanding obligations, amounts required to be deposited into 79
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special funds pursuant to the applicable bond proceedings, and 80
amounts to be used to pay financing costs. 81
(9) "Net state lottery proceeds" means the amount 83
determined by the Director of Budget and Management to be an 84
excess amount to the credit of the State Lottery Fund and to be 85
transferred to the Lottery Profits Education Fund, and moneys 86
from time to time in the Lottery Profits Education Fund, all as 87
provided for and referred to in section 3770.06 of the Revised 88
Code.
(10) "Obligations" means bonds, notes, or other evidences 90
of obligation of the state, including any appertaining interest 91
coupons, issued pursuant to this section. 92
(11) "Ohio School Facilities Commission" and "school 94
district" have the same meanings as in section 3318.01 of the 95
Revised Code.
(12) "Principal amount" means the aggregate of the amount 97
as stated or provided for in the applicable bond proceedings as 98
the amount on which interest or interest equivalent on particular 99
obligations is initially calculated. Principal amount does not 100
include any premium paid to the state by the initial purchaser of 101
the obligations. 102
(13) "Special funds" or "funds," unless the context 104
indicates otherwise, means the bond service fund, and any other 105
funds, including any reserve funds, created under the bond 106
proceedings and stated to be special funds in those proceedings, 107
including moneys and investments, and earnings from investments, 108
credited and to be credited to the particular fund. Special 109
funds do not include the School Building Program Assistance Fund 110
created by section 3318.25 of the Revised Code, or other funds 111
created by the bond proceedings that are not stated by those 112
proceedings to be special funds. 113
(14) "Using school district" means the school district, or 115
two or more school districts acting jointly, that are the 116
ultimate users of the capital facilities financed with net 117
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proceeds.
(B) Subject to Sections 2n and 17 of Article VIII of the 119
Ohio Constitution, the state, by the issuing authority, is 120
authorized to issue and sell, as provided in this section and in 121
an aggregate principal amount not to exceed one hundred fifty 122
million dollars, general obligations of this state for the 123
purpose of paying costs of capital facilities. 124
(C) Each issue of obligations shall be authorized by 126
resolution or order of the issuing authority. The bond 127
proceedings shall provide for or authorize the manner for 128
determining the principal amount or maximum principal amount of 129
obligations of an issue, the principal maturity or maturities, 130
the interest rate or rates, the date of and the dates of payment 131
of interest on the obligations, their denominations, and the 132
place or places of payment of debt service which may be within or 133
outside the state. The latest principal maturity may not be 134
later than the earlier of the thirty-first day of December of the 135
twenty-fifth calendar year after the year of issuance of the 136
particular obligations or of the twenty-fifth calendar year after 137
the year in which the original obligation to pay was issued or 138
entered into. Sections 9.96, 9.98, 9.981, 9.982, and 9.983 of 139
the Revised Code apply to obligations. The purpose of the 140
obligations may be stated in the bond proceedings in general 141
terms, such as "paying costs of capital facilities for a system 142
of common schools throughout the state as authorized by Section 143
2n of Article VIII of the Ohio Constitution."
(D) Net proceeds of obligations shall be deposited into 145
the School Building Program Assistance Fund created by section 146
3318.25 of the Revised Code. 147
(E) The issuing authority may appoint or provide for the 149
appointment of paying agents, bond registrars, securities 150
depositories, clearing corporations, and transfer agents, and may 151
retain the services of financial advisers and accounting experts, 152
and retain or contract for the services of marketing, 153
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remarketing, indexing, and administrative agents, other 154
consultants, and independent contractors, including printing 155
services, as are necessary in the judgment of the issuing 156
authority to carry out this section. Financing costs are 157
payable, as may be provided in the bond proceedings, from the 158
proceeds of the obligations, from special funds, or from other 159
moneys available for the purpose.
(F) The bond proceedings may contain additional provisions 161
customary or appropriate to the financing or to the obligations 162
or to particular obligations including, but not limited to, 163
provisions for: 164
(1) The redemption of obligations prior to maturity at the 166
option of the state or of the holder or upon the occurrence of 167
certain conditions, and at a particular price or prices and under 168
particular terms and conditions; 169
(2) The form of and other terms of the obligations; 171
(3) The establishment, deposit, investment, and 173
application of special funds, and the safeguarding of moneys on 174
hand or on deposit, in lieu of the applicability of provisions of 175
Chapter 131. or 135. of the Revised Code, but subject to any 176
special provisions of this section with respect to the 177
application of particular funds or moneys. Any financial 178
institution that acts as a depository of any moneys in special 179
funds or other funds under the bond proceedings may furnish 180
indemnifying bonds or pledge securities as required by the 181
issuing authority.
(4) Any or every provision of the bond proceedings being 183
binding upon the issuing authority and upon such using school 184
district, state agency, or government entity, officer, board, 185
commission, authority, agency, department, or other person or 186
body as may from time to time be authorized to take actions as 187
may be necessary to perform all or any part of the duty required 188
by the provision;
(5) The maintenance of each pledge or instrument 190
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comprising part of the bond proceedings until the state has fully 191
paid or provided for the payment of the debt service on the 192
obligations or met other stated conditions; 193
(6) In the event of default in any payments required to be 195
made by the bond proceedings, or by any other agreement of the 196
issuing authority made as part of a contract under which the 197
obligations were issued or secured, including a credit 198
enhancement facility, the enforcement of those payments by 199
mandamus, suit in equity, action at law, or any combination of 200
those remedial actions;
(7) The rights and remedies of the holders or owners of 202
obligations or of book-entry interests in them, and of third 203
parties under any credit enhancement facility, and provisions for 204
protecting and enforcing those rights and remedies, including 205
limitations on rights of individual holders or owners; 206
(8) The replacement of mutilated, destroyed, lost, or 208
stolen obligations; 209
(9) The funding, refunding, or advance refunding, or other 211
provision for payment, of obligations that will then no longer be 212
outstanding for purposes of this section or of the applicable 213
bond proceedings; 214
(10) Amendment of the bond proceedings; 216
(11) Any other or additional agreements with the owners of 218
obligations, and such other provisions as the issuing authority 219
determines, including limitations, conditions, or qualifications, 220
relating to any of the foregoing. 221
(G) The Great Seal of the State or a facsimile of it may 223
be affixed to or printed on the obligations. The obligations 224
requiring execution by or for the issuing authority shall be 225
signed as provided in the bond proceedings. Any obligations may 226
be signed by the individual who on the date of execution is the 227
authorized signer although on the date of these obligations that 228
individual is not an authorized signer. In case the individual 229
whose signature or facsimile signature appears on any obligation 230
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ceases to be an authorized signer before delivery of the 231
obligation, that signature or facsimile is nevertheless valid and 232
sufficient for all purposes as if that individual had remained 233
the authorized signer until delivery. 234
(H) Obligations are investment securities under Chapter 236
1308. of the Revised Code. Obligations may be issued in bearer 237
or in registered form, registrable as to principal alone or as to 238
both principal and interest, or both, or in certificated or 239
uncertificated form, as the issuing authority determines. 240
Provision may be made for the exchange, conversion, or transfer 241
of obligations and for reasonable charges for registration, 242
exchange, conversion, and transfer. Pending preparation of final 243
obligations, the issuing authority may provide for the issuance 244
of interim instruments to be exchanged for the final obligations. 245
(I) Obligations may be sold at public sale or at private 247
sale, and at such price at, above, or below par, all as provided 248
by the issuing authority in the bond proceedings. 249
(J) Except to the extent that rights are restricted by the 251
bond proceedings, any owner of obligations may by any suitable 252
form of legal proceedings protect and enforce any rights relating 253
to obligations under the laws of this state or granted by the 254
bond proceedings. Those rights include the right to compel the 255
performance of all applicable duties of the issuing authority and 256
the state. Each duty of the issuing authority and that 257
authority's officials, staff, and employees, and of each state 258
agency or using school district and its officers, members, staff, 259
or employees, undertaken pursuant to the bond proceedings, is 260
hereby established as a duty of the entity or individual having 261
authority to perform that duty, specifically enjoined by law and 262
resulting from an office, trust, or station within the meaning of 263
section 2731.01 of the Revised Code. The individuals who are 264
from time to time the issuing authority, or the issuing 265
authority's officials, staff, or employees, are not liable in 266
their personal capacities on any obligations or otherwise under 267
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the bond proceedings.
(K)(1) Subject to Sections 2n and 17 of Article VIII of 269
the Ohio Constitution and this section, the issuing authority 270
may, in addition to the authority provided in division (B) of 271
this section, authorize and provide for the issuance of 272
obligations in the form of bond anticipation notes, and may 273
provide for the renewal of those notes from time to time by the 274
issuance of new notes. The holders of notes or appertaining 275
interest coupons have the right to have debt service on those 276
notes paid solely from the moneys and special funds that are or 277
may be pledged to that payment, including the proceeds of bonds 278
or renewal notes or both, as the issuing authority provides in 279
the bond proceedings authorizing the notes. Notes may be 280
additionally secured by covenants of the issuing authority to the 281
effect that the issuing authority and the state will do all 282
things necessary for the issuance of bonds or renewal notes in 283
such principal amount and upon such terms as may be necessary to 284
provide moneys to pay when due the debt service on the notes, and 285
apply their proceeds to the extent necessary, to make full and 286
timely payment of debt service on the notes as provided in the 287
applicable bond proceedings.
In the bond proceedings authorizing the issuance of bond 289
anticipation notes the issuing authority shall set forth for the 290
bonds anticipated an estimated schedule of annual principal 291
payments the latest of which shall be no later than provided in 292
division (C) of this section. While the notes are outstanding 293
there shall be deposited, as shall be provided in the bond 294
proceedings for those notes, from the sources authorized for 295
payment of debt service on the bonds, amounts sufficient to pay 296
the principal of the bonds anticipated as set forth in that 297
estimated schedule during the time the notes are outstanding, 298
which amounts shall be used solely to pay the principal of those 299
notes or of the bonds anticipated. 300
(2) Except as otherwise provided in this section, bonds or 302
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notes authorized pursuant to division (K) of this section are 303
subject to the provisions of this section pertaining to 304
obligations generally. 305
(3) The principal amount of refunding or renewal 307
obligations issued pursuant to division (K) of this section shall 308
be in addition to the amount authorized by the General Assembly 309
as referred to in division (B) of this section, to the extent 310
that the principal amount of those obligations does not exceed 311
the then outstanding principal amount of the obligations they are 312
to refund, renew, or retire. 313
(L) Obligations are lawful investments for banks, savings 315
and loan associations, credit union share guaranty corporations, 316
trust companies, trustees, fiduciaries, insurance companies, 317
including domestic for life and domestic not for life, trustees 318
or other officers having charge of sinking and bond retirement or 319
other special funds of the state and political subdivisions and 320
taxing districts of this state, the Sinking Fund, the 321
Administrator of Workers' Compensation subject to the approval of 322
the Workers' Compensation Board, the State Teachers Retirement 323
System, the Public Employees Retirement System, the School 324
Employees Retirement System, and the Ohio Police and Fire Pension 325
Fund, notwithstanding any other provisions of the Revised Code or 326
rules adopted pursuant to those provisions by any state agency 327
with respect to investments by them, and are also acceptable as 328
security for the repayment of the deposit of public moneys. 329
(M) Unless otherwise provided or provided for in any 331
applicable bond proceedings, moneys to the credit of or in a 332
special fund shall be disbursed on the order of the issuing 333
authority. No such order is required for the payment, from the 334
bond service fund or other special fund, when due of debt service 335
or required payments under credit enhancement facilities. 336
(N) The full faith and credit, revenue, including net 338
state lottery proceeds, and taxing power of the state are and 339
shall be pledged to the timely payment of debt service on 340
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outstanding obligations as it comes due, all in accordance with 341
Section 2n of Article VIII of the Ohio Constitution and this 342
section. Moneys referred to in Section 5a of Article XII of the 343
Ohio Constitution may not be pledged or used for the payment of 344
debt service. The state covenants, and that covenant shall be 345
controlling notwithstanding any other provision of law, that the 346
state and the applicable officers and agencies of the state, 347
including the General Assembly, shall, so long as any obligations 348
are outstanding in accordance with their terms, maintain 349
statutory authority for and cause to be levied, collected, and 350
applied sufficient pledged excises, taxes, and revenues of the 351
state so that the revenues shall be sufficient in amounts to pay 352
debt service when due, to establish and maintain any reserves and 353
other requirements, and to pay financing costs, including costs 354
of or relating to credit enhancement facilities, all as provided 355
for in the bond proceedings. 356
Those excises, taxes, and revenues are and shall be deemed 358
to be levied and collected, in addition to the purposes otherwise 359
provided for by law, to provide for the payment of debt service 360
and financing costs in accordance with this section and the bond 361
proceedings. 362
Notwithstanding division (B) of section 3770.06 of the 364
Revised Code, whenever, in the judgment of the Director of Budget 365
and Management, an amount of net state lottery proceeds is 366
necessary to be applied to the payment of debt service on 367
obligations, the Director shall transfer that amount directly 368
from the State Lottery Fund or from the Lottery Profits Education 369
Fund to the bond service fund. The provisions of this paragraph 370
are subject to any prior pledges or obligation of those amounts 371
to the payment of bond service charges as defined in division (C) 372
of section 3318.21 of the Revised Code, as referred to in 373
division (B) of section 3770.06 of the Revised Code. 374
(O) The General Assembly has the same authority with 376
regard to obligations issued under this section as it has under 377
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division (E) of section 164.11 of the Revised Code with regard to 378
obligations issued under Chapter 164. of the Revised Code. 379
(P) There is hereby created in the state treasury the 381
Common Schools Capital Facilities Bond Service Fund. All moneys 382
received by the state and required by the bond proceedings, 383
consistent with this section, to be deposited, transferred, or 384
credited to the bond service fund, and all other moneys 385
transferred or allocated to or received for the purposes of that 386
fund, shall be deposited and credited to the bond service fund, 387
subject to any applicable provisions of the bond proceedings but 388
without necessity for any act of appropriation. During the 389
period beginning with the date of the first issuance of 390
obligations and continuing during the time that any obligations 391
are outstanding in accordance with their terms, so long as moneys 392
in the bond service fund are insufficient to pay debt service 393
when due on those obligations payable from that fund (except the 394
principal amounts of bond anticipation notes payable from the 395
proceeds of renewal notes or bonds anticipated) and due in the 396
particular fiscal year, a sufficient amount of revenues of the 397
state are committed and, without necessity for further act of 398
appropriation, shall be paid to the bond service fund for the 399
purpose of paying that debt service when due. For the purpose of 400
this section, and if so provided in the applicable bond 401
proceedings, debt service includes costs relating to credit
enhancement facilities that represent payment of debt service. 402
The bond service fund is a trust fund and is hereby pledged 404
to the payment of debt service. Payment of that debt service 405
shall be made or provided for by the issuing authority in 406
accordance with the bond proceedings without necessity for any 407
act of appropriation. 408
(Q) The bond proceedings may provide for the establishment 410
of separate accounts in the bond service fund and for the 411
application of those accounts only to debt service on specific 412
obligations, and for other accounts in the bond service fund 413
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within the general purposes of that fund. 414
(R) Subject to the bond proceedings pertaining to any 416
obligations then outstanding in accordance with their terms, the 417
issuing authority may in the bond proceedings pledge all, or such 418
portion as the issuing authority determines, of the moneys in the 419
bond service fund to the payment of debt service on particular 420
obligations, and for the establishment and maintenance of any 421
reserves for payment of particular debt service. 422
(S) On or before the fifteenth day of July of each fiscal 424
year, the issuing authority shall certify to the Office of Budget 425
and Management the total amount of moneys required, and sources 426
of that money, during that fiscal year to meet in full all debt 427
service and financing costs. If and so long as the moneys to the 428
credit of the bond service fund, together with any other moneys 429
available for the purpose, are insufficient to meet in full all 430
payments when due of the amount required as stated in that 431
certificate or otherwise, the Office of Budget and Management 432
shall at the times as provided in the bond proceedings transfer a 433
sufficient amount to the bond service fund from the revenues 434
derived from all excises, taxes, and other revenues of the state, 435
including net state lottery proceeds, referred to in division (N) 436
of this section.
(T) Obligations issued under this section, their transfer, 438
and the interest, interest equivalent, and other income or 439
accreted amounts on them, including any profit made on their 440
sale, exchange, or other disposition, shall at all times be free 441
from taxation within this state. 442
Section 2. (A) As used in this section, and in the 444
applicable bond proceedings unless otherwise provided: 445
(1) "Bond proceedings" means the resolutions, agreements, 447
and credit enhancement facilities, and amendments and supplements 448
to them, or any one or more or combination of them, authorizing, 449
awarding, or providing for the terms and conditions applicable to 450
or providing for the security or liquidity of, obligations, and 451
13
the provisions contained in those obligations. 452
(2) "Bond service fund" means the fund created by division 454
(P) of this section, and any accounts in that fund, including all 455
moneys and investments, and earnings from investments, credited 456
and to be credited to that fund and accounts as and to the extent 457
provided in the bond proceedings. 458
(3) "Capital facilities" means capital facilities that are 460
capital facilities for state-supported and state-assisted 461
institutions of higher education. 462
(4) "Costs of capital facilities" means the costs of 464
acquiring, constructing, reconstructing, rehabilitating, 465
remodeling, renovating, enlarging, improving, equipping, or 466
furnishing capital facilities, and of the financing of those 467
costs. Costs of capital facilities include without limitation 468
the cost of clearance and preparation of the site and of any land 469
to be used in connection with capital facilities, the cost of any 470
indemnity and surety bonds and premiums on insurance, all related 471
direct administrative expenses and allocable portions of direct 472
costs of the state and the using institution, costs of 473
engineering and architectural services, designs, plans, 474
specifications, surveys, and estimates of cost, financing costs, 475
interest on obligations from their date to the time when interest 476
is to be paid from sources other than proceeds of obligations, 477
amounts necessary to establish any reserves as required by the 478
bond proceedings, the reimbursement of all moneys advanced or 479
applied by or borrowed from the using institution or any 480
governmental agency for the payment of any item of costs of 481
capital facilities, and all other expenses necessary or incident 482
to planning or determining feasibility or practicability with 483
respect to capital facilities, and such other expenses as may be 484
necessary or incident to the acquisition, construction, 485
reconstruction, rehabilitation, remodeling, renovation, 486
enlargement, improvement, equipment, and furnishing of capital 487
facilities, the financing of those costs, and the placing of the 488
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capital facilities in use and operation, including any one, part 489
of, or combination of those classes of costs and expenses.
(5) "Credit enhancement facilities," "financing costs," 491
and "interest" or "interest equivalent" have the same meanings as 492
in section 133.01 of the Revised Code. 493
(6) "Debt service" means principal, including any 495
mandatory sinking fund or redemption requirements for retirement 496
of obligations, interest and other accreted amounts, interest 497
equivalent, and any redemption premium, payable on obligations. 498
(7) "Issuing authority" means the Ohio Public Facilities 500
Commission established in section 154.03 of the Revised Code. 501
(8) "Net proceeds" means amounts received from the sale of 503
obligations, excluding: amounts used to refund or retire 504
outstanding obligations, amounts required to be deposited into 505
special funds pursuant to the applicable bond proceedings, and 506
amounts to be used to pay financing costs. 507
(9) "Obligations" means bonds, notes, or other evidences 509
of obligation of the state, including any appertaining interest 510
coupons, issued pursuant to this section. 511
(10) "Principal amount" means the aggregate of the amount 513
as stated or provided for in the applicable bond proceedings as 514
the amount on which interest or interest equivalent on particular 515
obligations is initially calculated. Principal amount does not 516
include any premium paid to the state by the initial purchaser of 517
the obligations. 518
(11) "Special funds" or "funds," unless the context 520
indicates otherwise, means the bond service fund, and any other 521
funds, including any reserve funds, created under the bond 522
proceedings and stated to be special funds in those proceedings, 523
including moneys and investments, and earnings from investments, 524
credited and to be credited to the particular fund. Special 525
funds do not include the Higher Education Improvement Fund 526
created by division (F) of section 154.21 of the Revised Code, or 527
other funds created by the bond proceedings that are not stated 528
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by those proceedings to be special funds. 529
(12) "State-supported or state-assisted institutions of 531
higher education" means a state university or college, or 532
community college district, technical college district, 533
university branch district, or state community college, or two or 534
more institutions acting jointly, that are the ultimate users of 535
the capital facilities financed with net proceeds. "State 536
university or college" means each of the state universities 537
identified in section 3345.011 of the Revised Code, the 538
Northeastern Ohio Universities College of Medicine, and the 539
Medical College of Ohio at Toledo.
(B) Subject to Sections 2n and 17 of Article VIII of the 541
Ohio Constitution, the state, by the issuing authority, is 542
authorized to issue and sell, as provided in this section and in 543
an aggregate principal amount or not to exceed one hundred fifty 544
million dollars, general obligations of this state for the 545
purpose of paying costs of capital facilities. 546
(C) Each issue of obligations shall be authorized by 548
resolution of the issuing authority. The bond proceedings shall 549
provide for or authorize the manner for determining the principal 550
amount or maximum principal amount of obligations of an issue, 551
the principal maturity or maturities, the interest rate or rates, 552
the date of and the dates of payment of interest on the 553
obligations, their denominations, and the place or places of 554
payment of debt service which may be within or outside the state. 555
The latest principal maturity may not be later than the earlier 556
of the thirty-first day of December of the twenty-fifth calendar 557
year after the year of issuance of the particular obligations or 558
of the twenty-fifth calendar year after the year in which the 559
original obligation to pay was issued or entered into. Sections 560
9.96, 9.98, 9.981, 9.982, and 9.983 of the Revised Code apply to 561
obligations. The purpose of the obligations may be stated in the 562
bond proceedings in general terms, such as "paying costs of 563
capital facilities for state-supported or state-assisted 564
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institutions of higher education as authorized by Section 2n of 565
Article VIII of the Ohio Constitution."
(D) Net proceeds of obligations shall be deposited into 567
the Higher Education Improvement Fund created by division (F) of 568
section 154.21 of the Revised Code. 569
(E) The issuing authority may appoint or provide for the 571
appointment of paying agents, bond registrars, securities 572
depositories, clearing corporations, and transfer agents, and may 573
retain the services of financial advisers and accounting experts, 574
and retain or contract for the services of marketing, 575
remarketing, indexing, and administrative agents, other 576
consultants, and independent contractors, including printing 577
services, as are necessary in the judgment of the issuing 578
authority to carry out this section. Financing costs are 579
payable, as may be provided in the bond proceedings, from the 580
proceeds of the obligations, from special funds, or from other 581
moneys available for the purpose.
(F) The bond proceedings may contain additional provisions 583
customary or appropriate to the financing or to the obligations 584
or to particular obligations including, but not limited to, 585
provisions for: 586
(1) The redemption of obligations prior to maturity at the 588
option of the state or of the holder or upon the occurrence of 589
certain conditions, and at a particular price or prices and under 590
particular terms and conditions; 591
(2) The form of and other terms of the obligations; 593
(3) The establishment, deposit, investment, and 595
application of special funds, and the safeguarding of moneys on 596
hand or on deposit, in lieu of the applicability of provisions of 597
Chapter 131. or 135. of the Revised Code, but subject to any 598
special provisions of this section with respect to the 599
application of particular funds or moneys. Any financial 600
institution that acts as a depository of any moneys in special 601
funds or other funds under the bond proceedings may furnish 602
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indemnifying bonds or pledge securities as required by the 603
issuing authority.
(4) Any or every provision of the bond proceedings being 605
binding upon the issuing authority and upon such using 606
institution, state agency, or government entity, officer, board, 607
commission, authority, agency, department, or other person or 608
body as may from time to time be authorized to take actions as 609
may be necessary to perform all or any part of the duty required 610
by the provision;
(5) The maintenance of each pledge or instrument 612
comprising part of the bond proceedings until the state has fully 613
paid or provided for the payment of the debt service on the 614
obligations or met other stated conditions; 615
(6) In the event of default in any payments required to be 617
made by the bond proceedings, or by any other agreement of the 618
issuing authority made as part of a contract under which the 619
obligations were issued or secured, including a credit 620
enhancement facility, the enforcement of those payments by 621
mandamus, suit in equity, action at law, or any combination of 622
those remedial actions;
(7) The rights and remedies of the holders or owners of 624
obligations or of book-entry interests in them, and of third 625
parties under any credit enhancement facility, and provisions for 626
protecting and enforcing those rights and remedies, including 627
limitations on rights of individual holders or owners; 628
(8) The replacement of mutilated, destroyed, lost, or 630
stolen obligations; 631
(9) The funding, refunding, or advance refunding, or other 633
provision for payment, of obligations that will then no longer be 634
outstanding for purposes of this section or of the applicable 635
bond proceedings; 636
(10) Amendment of the bond proceedings; 638
(11) Any other or additional agreements with the owners of 640
obligations, and such other provisions as the issuing authority 641
18
determines, including limitations, conditions, or qualifications, 642
relating to any of the foregoing. 643
(G) The Great Seal of the State or a facsimile of it may 645
be affixed to or printed on the obligations. The obligations 646
requiring execution for the issuing authority shall be signed as 647
provided in the bond proceedings. Any obligations may be signed 648
by the individual who on the date of execution is the authorized 649
signer although on the date of these obligations that individual 650
is not an authorized signer. In case the individual whose 651
signature or facsimile signature appears on any obligation ceases 652
to be an authorized signer before delivery of the obligation, 653
that signature or facsimile is nevertheless valid and sufficient 654
for all purposes as if that individual had remained the 655
authorized signer until delivery. 656
(H) Obligations are investment securities under Chapter 658
1308. of the Revised Code. Obligations may be issued in bearer 659
or in registered form, registrable as to principal alone or as to 660
both principal and interest, or both, or in certificated or 661
uncertificated form, as the issuing authority determines. 662
Provision may be made for the exchange, conversion, or transfer 663
of obligations and for reasonable charges for registration, 664
exchange, conversion, and transfer. Pending preparation of final 665
obligations, the issuing authority may provide for the issuance 666
of interim instruments to be exchanged for the final obligations. 667
(I) Obligations may be sold at public sale or at private 669
sale, and at such price at, above, or below par, all as provided 670
by the issuing authority in the bond proceedings. 671
(J) Except to the extent that rights are restricted by the 673
bond proceedings, any owner of obligations may by any suitable 674
form of legal proceedings protect and enforce any rights relating 675
to obligations under the laws of this state or granted by the 676
bond proceedings. Those rights include the right to compel the 677
performance of all applicable duties of the issuing authority and 678
the state. Each duty of the issuing authority and its members, 679
19
officers, staff, and employees, and of each state agency or using 680
institution and its officers, members, staff, or employees, 681
undertaken pursuant to the bond proceedings, is hereby 682
established as a duty of the entity or individual having 683
authority to perform that duty, specifically enjoined by law and 684
resulting from an office, trust, or station within the meaning of 685
section 2731.01 of the Revised Code. The individuals who are 686
from time to time the members of the issuing authority, or 687
designees of those members pursuant to section 154.04 of the 688
Revised Code, or its officers, staff, or employees, are not 689
liable in their personal capacities on any obligations or 690
otherwise under the bond proceedings.
(K)(1) Subject to Sections 2n and 17 of Article VIII of 692
the Ohio Constitution and this section, the issuing authority 693
may, in addition to the authority provided in division (B) of 694
this section, authorize and provide for the issuance of 695
obligations in the form of bond anticipation notes, and may 696
provide for the renewal of those notes from time to time by the 697
issuance of new notes. The holders of notes or appertaining 698
interest coupons have the right to have debt service on those 699
notes paid solely from the moneys and special funds that are or 700
may be pledged to that payment, including the proceeds of bonds 701
or renewal notes or both, as the issuing authority provides in 702
the bond proceedings authorizing the notes. Notes may be 703
additionally secured by covenants of the issuing authority to the 704
effect that the issuing authority and the state will do all 705
things necessary for the issuance of bonds or renewal notes in 706
such principal amount and upon such terms as may be necessary to 707
provide moneys to pay when due the debt service on the notes, and 708
apply their proceeds to the extent necessary, to make full and 709
timely payment of debt service on the notes as provided in the 710
applicable bond proceedings.
In the bond proceedings authorizing the issuance of bond 712
anticipation notes the issuing authority shall set forth for the 713
20
bonds anticipated an estimated schedule of annual principal 714
payments the latest of which shall be no later than provided in 715
division (C) of this section. While the notes are outstanding 716
there shall be deposited, as shall be provided in the bond 717
proceedings for those notes, from the sources authorized for 718
payment of debt service on the bonds, amounts sufficient to pay 719
the principal of the bonds anticipated as set forth in that 720
estimated schedule during the time the notes are outstanding, 721
which amounts shall be used solely to pay the principal of those 722
notes or of the bonds anticipated. 723
(2) Except as otherwise provided in this section, bonds or 725
notes authorized pursuant to division (K) of this section are 726
subject to the provisions of this section pertaining to 727
obligations generally. 728
(3) The principal amount of refunding or renewal 730
obligations issued pursuant to division (K) of this section shall 731
be in addition to the amount authorized by the General Assembly 732
as referred to in division (B) of this section, to the extent 733
that the principal amount of those obligations does not exceed 734
the then outstanding principal amount of the obligations they are 735
to refund, renew, or retire. 736
(L) Obligations are lawful investments for banks, savings 738
and loan associations, credit union share guaranty corporations, 739
trust companies, trustees, fiduciaries, insurance companies, 740
including domestic for life and domestic not for life, trustees 741
or other officers having charge of sinking and bond retirement or 742
other special funds of the state and political subdivisions and 743
taxing districts of this state, the Sinking Fund, the 744
Administrator of Workers' Compensation subject to the approval of 745
the Workers' Compensation Board, the State Teachers Retirement 746
System, the Public Employees Retirement System, the School 747
Employees Retirement System, and the Ohio Police and Fire Pension 748
Fund, notwithstanding any other provisions of the Revised Code or 749
rules adopted pursuant to those provisions by any state agency 750
21
with respect to investments by them, and are also acceptable as 751
security for the repayment of the deposit of public moneys. 752
(M) Unless otherwise provided or provided for in any 754
applicable bond proceedings, moneys to the credit of or in a 755
special fund shall be disbursed on the order of the issuing 756
authority. No such order is required for the payment, from the 757
bond service fund or other special fund, when due of debt service 758
or required payments under credit enhancement facilities. 759
(N) The full faith and credit, revenue, and taxing power 761
of the state are and shall be pledged to the timely payment of 762
debt service on outstanding obligations as it comes due, all in 763
accordance with Section 2n of Article VIII of the Ohio 764
Constitution and this section. Moneys referred to in Section 5a 765
of Article XII of the Ohio Constitution, and net state lottery 766
proceeds, may not be pledged or used for the payment of debt 767
service. The state covenants, and that covenant shall be 768
controlling notwithstanding any other provision of law, that the 769
state and the applicable officers and agencies of the state, 770
including the General Assembly, shall, so long as any obligations 771
are outstanding in accordance with their terms, maintain 772
statutory authority for and cause to be levied, collected, and 773
applied sufficient pledged excises, taxes, and revenues of the 774
state so that the revenues shall be sufficient in amounts to pay 775
debt service when due, to establish and maintain any reserves and 776
other requirements, and to pay financing costs, including costs 777
of or relating to credit enhancement facilities, all as provided 778
for in the bond proceedings. 779
Those excises, taxes, and revenues are and shall be deemed 781
to be levied and collected, in addition to the purposes otherwise 782
provided for by law, to provide for the payment of debt service 783
and financing costs in accordance with this section and the bond 784
proceedings. 785
(O) The General Assembly has the same authority with 787
regard to obligations issued under this section as it has under 788
22
division (E) of section 164.11 of the Revised Code with regard to 789
obligations issued under Chapter 164. of the Revised Code. 790
(P) There is hereby created in the state treasury the 792
Higher Education Capital Facilities Bond Service Fund. All 793
moneys received by the state and required by the bond 794
proceedings, consistent with this section, to be deposited, 795
transferred, or credited to the bond service fund, and all other 796
moneys transferred or allocated to or received for the purposes 797
of that fund, shall be deposited and credited to the bond service 798
fund, subject to any applicable provisions of the bond 799
proceedings but without necessity for any act of appropriation. 800
During the period beginning with the date of the first issuance 801
of obligations and continuing during the time that any 802
obligations are outstanding in accordance with their terms, so 803
long as moneys in the bond service fund are insufficient to pay 804
debt service when due on those obligations payable from that fund 805
(except the principal amounts of bond anticipation notes payable 806
from the proceeds of renewal notes or bonds anticipated) and due 807
in the particular fiscal year, a sufficient amount of revenues of 808
the state are committed and, without necessity for further act of 809
appropriation, shall be paid to the bond service fund for the 810
purpose of paying that debt service when due. For the purpose of 811
this section, and if so provided in the applicable bond 812
proceedings, debt service includes costs relating to credit 813
enhancement facilities that represent payment of debt service. 814
The bond service fund is a trust fund and is hereby pledged 816
to the payment of debt service. Payment of that debt service 817
shall be made or provided for by the issuing authority in 818
accordance with the bond proceedings without necessity for any 819
act of appropriation. 820
(Q) The bond proceedings may provide for the establishment 822
of separate accounts in the bond service fund and for the 823
application of those accounts only to debt service on specific 824
obligations, and for other accounts in the bond service fund 825
23
within the general purposes of that fund. 826
(R) Subject to the bond proceedings pertaining to any 828
obligations then outstanding in accordance with their terms, the 829
issuing authority may in the bond proceedings pledge all, or such 830
portion as the issuing authority determines, of the moneys in the 831
bond service fund to the payment of debt service on particular 832
obligations, and for the establishment and maintenance of any 833
reserves for payment of particular debt service. 834
(S) If and so long as the moneys to the credit of the bond 836
service fund, together with any other moneys available for the 837
purpose, are insufficient to meet in full all payments when due 838
of the amount required, the Office of Budget and Management shall 839
at the times as provided in the bond proceedings transfer a 840
sufficient amount to the bond service fund from the revenues 841
derived from all excises, taxes, and other revenues of the state 842
referred to in division (N) of this section. 843
(T) Obligations issued under this section, their transfer, 845
and the interest, interest equivalent, and other income or 846
accreted amounts on them, including any profit made on their 847
sale, exchange, or other disposition, shall at all times be free 848
from taxation within this state. 849
Section 3. (A) Unless otherwise provided in any 851
applicable bond proceedings, moneys to the credit of special 852
funds referred to in Sections 1 and 2 of this act may be invested 853
by or on behalf of the state only in one or more of the 854
following:
(1) Notes, bonds, or other direct obligations of the 856
United States or of any agency or instrumentality of the United 857
States, or in no-front-end-load money market mutual funds 858
consisting exclusively of those obligations, or in repurchase 859
agreements, including those issued by any fiduciary, secured by 860
those obligations, or in United States common trust funds 861
consisting exclusively of those obligations; 862
(2) Obligations of this state or any political subdivision 864
24
of this state; 865
(3) Certificates of deposit of any national bank located 867
in this state and any bank, as defined in section 1101.01 of the 868
Revised Code, subject to inspection by the Superintendent of 869
Financial Institutions; 870
(4) The Treasurer of State's pooled investment program 872
under section 135.45 of the Revised Code. 873
(B) The income from investments referred to in this 875
section shall be credited to such special funds or otherwise as 876
the issuing authority determines in the bond proceedings. Those 877
investments may be sold or exchanged at times as the issuing 878
authority determines, provides for, or authorizes. 879
Section 4. (A) This section is in implementation of 881
division (D) of Section 17 of Article VIII of the Ohio 882
Constitution for purposes of issuing direct obligations of the 883
state subject to that section during the fiscal year ending June 884
30, 2000.
(B) For purposes of the computation of debt service under 886
that Section 17 of Article VIII of the Ohio Constitution, there 887
shall be included debt service payable on securities that are 888
direct obligations of the state issued under Article VIII of the 889
Ohio Constitution, and on those bonds anticipated by bond 890
anticipation notes, to the extent that debt service on those 891
securities is anticipated to be paid from the General Revenue 892
Fund or net state lottery proceeds. Examples of securities the 893
debt service on which is not anticipated to be paid from either 894
of those sources are bonds of the state issued for highway 895
purposes pursuant to Section 2i or 2m of Article VIII of the Ohio 896
Constitution, which, although general obligations of the state, 897
have been and are anticipated to be paid from highway user 898
receipts and not from the General Revenue Fund or net state 899
lottery proceeds. 900
(C) If there is no separate constitutional or statutory 902
provision applicable for the purpose, debt service on bonds 903
25
anticipated by bond anticipation notes shall be estimated as 904
provided in this division. That amount, to be certified either 905
by the issuing authority of the particular notes or by the 906
Governor or the Governor's designee pursuant to division (E) of 907
this section, shall be the estimated amount that would have been 908
payable on bonds maturing serially in each fiscal year after the 909
fiscal year of issuance of the notes over the maximum period of 910
maturity for the bonds authorized in the particular governing 911
constitutional or statutory provision, as if those bonds had been 912
issued without the prior issuance of the notes, and computed on a 913
substantially level debt service basis applying an interest rate 914
or rates certified to be market rates at the time. 915
(D) In the case of securities issued to refund or retire 917
securities, the debt service on the new securities shall be 918
counted and the debt service on the securities being refunded or 919
retired shall not be counted, to the extent that the principal 920
amount of the new securities does not exceed the then outstanding 921
principal amount of the prior securities. 922
(E) The Governor, or the Governor's designee for the 924
purpose, shall determine and certify the fiscal year amounts 925
required to be applied or set aside for payment of debt service, 926
the securities to which that debt service relates, the total 927
estimated revenues of the state for the General Revenue Fund and 928
from net state lottery proceeds during the particular fiscal 929
year, and any other financial data necessary or appropriate for 930
the purpose of the computations under division (A) of Section 17 931
of Article VIII of the Ohio Constitution and this section. Those 932
determinations and certifications shall be filed with the 933
Director of Budget and Management, the Treasurer of State, and 934
the issuing authority for the particular obligations, at or prior 935
to the time those securities are issued. The Governor's designee 936
for the purpose may be the Director or Assistant Director of 937
Budget and Management, or any employee or official of the 938
Governor's office.
26
(F) For purposes of this section: 940
(1) "Interest" or "interest equivalent," "outstanding," 942
and "securities" have the same meanings as in section 133.01 of 943
the Revised Code.
(2) "Debt service" means principal, including any 945
mandatory sinking fund deposits and mandatory redemption 946
payments, and interest or interest equivalent payable on 947
securities, as those payments are stated to come due and to be 948
payable.
Section 5. There is hereby appropriated both from the 950
General Revenue Fund and the Common Schools Capital Facilities 951
Bond Service Fund created in Section 1 of this act, the amount of 952
$13,650,000 for Fiscal Year 2000 and $14,600,000 for Fiscal Year 953
2001, to be used for the purpose of paying the debt service on 954
general obligation bonds issued pursuant to Section 2n of Article 955
VIII of the Ohio Constitution and Section 1 of this act. If it 956
is determined that additional appropriations are necessary for 957
the purpose, such amounts are hereby appropriated. The GRF 958
appropriation item 230-428 in Section 10 of Am. Sub. H.B. No. 282 959
of the 123rd General Assembly is hereby reduced by $13,650,000 960
for Fiscal Year 2000 and $14,600,000 for Fiscal Year 2001. 961
Section 6. There is hereby appropriated both from the 963
General Revenue Fund and the Higher Education Capital Facilities 964
Bond Service Fund created in Section 2 of this act, the amount of 965
$4,375,000 for Fiscal Year 2000 and $17,225,000 for Fiscal Year 966
2001, to be used for the purpose of paying the debt service on 967
general obligation bonds issued pursuant to Section 2n of Article 968
VIII of the Ohio Constitution and Section 2 of this act. If it 969
is determined that additional appropriations are necessary for 970
the purpose, such amounts are hereby appropriated. The GRF 971
appropriation item 235-401 in Section 7 of Am. Sub. H.B. No. 282 972
of the 123rd General Assembly is hereby reduced by $4,375,000 for 973
Fiscal Year 2000 and $17,225,000 for Fiscal Year 2001. 974
Section 7. This act is hereby declared to be an emergency 976
27
measure necessary for the immediate preservation of the public 977
peace, health, and safety. The reasons for such necessity lie in 978
the fact that immediate effective action is necessary in order to 979
promptly implement Sections 2n and 17 of Article VIII of the Ohio 980
Constitution adopted on November 2, 1999, by a majority of the 981
electors of the state voting thereon, and thereby authorize 982
general obligation bonds to be issued for facilities for 983
elementary and secondary education throughout the state and for 984
state-supported and state-assisted institutions of higher 985
education, at a lower interest cost to the state, and to enable 986
other direct obligations of the state to be issued consistent 987
with Section 17 of Article VIII of the Ohio Constitution. 988
Therefore, this act shall go into immediate effect. 989