As Passed by the Senate 1
123rd General Assembly 4
Regular Session Am. S. B. No. 206 5
1999-2000 6
SENATORS CARNES-RAY-CUPP-WATTS-PRENTISS-OELSLAGER-BLESSING- 8
GARDNER-MUMPER-SPADA-ESPY 9
_________________________________________________________________ 11
A B I L L
To provide for the implementation of Sections 2n and 13
17 of Article VIII of the Constitution of the 14
State of Ohio, to make an appropriation, and to 15
declare an emergency.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO: 17
Section 1. (A) As used in this section and in the 19
applicable bond proceedings unless otherwise provided: 20
(1) "Bond proceedings" means the orders, resolutions, 22
agreements, and credit enhancement facilities, and amendments and 23
supplements to them, or any one or more or combination of them, 24
authorizing, awarding, or providing for the terms and conditions 25
applicable to or providing for the security or liquidity of, 26
obligations, and the provisions contained in those obligations. 27
(2) "Bond service fund" means the fund created by division 29
(P) of this section, and any accounts in that fund, including all 30
moneys and investments, and earnings from investments, credited 31
and to be credited to that fund and accounts as and to the extent 32
provided in the bond proceedings. 33
(3) "Capital facilities" means capital facilities that are 35
capital facilities for a system of common schools throughout the 36
state. 37
(4) "Costs of capital facilities" means the costs of 39
acquiring, constructing, reconstructing, rehabilitating, 40
remodeling, renovating, enlarging, improving, equipping, or 41
furnishing capital facilities, and of the financing of those 42
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costs. Costs of capital facilities include without limitation 43
the cost of clearance and preparation of the site and of any land 44
to be used in connection with capital facilities, the cost of any 45
indemnity and surety bonds and premiums on insurance, all related 46
direct administrative expenses and allocable portions of direct 47
costs of the state and the using school district and the Ohio 48
School Facilities Commission, costs of engineering and 49
architectural services, designs, plans, specifications, surveys, 50
and estimates of cost, financing costs, interest on obligations 51
from their date to the time when interest is to be paid from 52
sources other than proceeds of obligations, amounts necessary to 53
establish any reserves as required by the bond proceedings, the 54
reimbursement of all moneys advanced or applied by or borrowed 55
from the using school district or any governmental agency for the 56
payment of any item of costs of capital facilities, and all other 57
expenses necessary or incident to planning or determining 58
feasibility or practicability with respect to capital facilities, 59
and such other expenses as may be necessary or incident to the 60
acquisition, construction, reconstruction, rehabilitation, 61
remodeling, renovation, enlargement, improvement, equipment, and 62
furnishing of capital facilities, the financing of those costs, 63
and the placing of the capital facilities in use and operation, 64
including any one, part of, or combination of those classes of 65
costs and expenses.
(5) "Credit enhancement facilities," "financing costs," 67
and "interest" or "interest equivalent" have the same meanings as 68
in section 133.01 of the Revised Code. 69
(6) "Debt service" means principal, including any 71
mandatory sinking fund or redemption requirements for retirement 72
of obligations, interest and other accreted amounts, interest 73
equivalent, and any redemption premium, payable on obligations. 74
(7) "Issuing authority" means the Treasurer of State. 76
(8) "Net proceeds" means amounts received from the sale of 78
obligations, excluding: amounts used to refund or retire 79
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outstanding obligations, amounts required to be deposited into 80
special funds pursuant to the applicable bond proceedings, and 81
amounts to be used to pay financing costs. 82
(9) "Net state lottery proceeds" means the amount 84
determined by the Director of Budget and Management to be an 85
excess amount to the credit of the State Lottery Fund and to be 86
transferred to the Lottery Profits Education Fund, and moneys 87
from time to time in the Lottery Profits Education Fund, all as 88
provided for and referred to in section 3770.06 of the Revised 89
Code.
(10) "Obligations" means bonds, notes, or other evidences 91
of obligation of the state, including any appertaining interest 92
coupons, issued pursuant to this section. 93
(11) "Ohio School Facilities Commission" and "school 95
district" have the same meanings as in section 3318.01 of the 96
Revised Code.
(12) "Principal amount" means the aggregate of the amount 98
as stated or provided for in the applicable bond proceedings as 99
the amount on which interest or interest equivalent on particular 100
obligations is initially calculated. Principal amount does not 101
include any premium paid to the state by the initial purchaser of 102
the obligations. 103
(13) "Special funds" or "funds," unless the context 105
indicates otherwise, means the bond service fund, and any other 106
funds, including any reserve funds, created under the bond 107
proceedings and stated to be special funds in those proceedings, 108
including moneys and investments, and earnings from investments, 109
credited and to be credited to the particular fund. Special 110
funds do not include the School Building Program Assistance Fund 111
created by section 3318.25 of the Revised Code, or other funds 112
created by the bond proceedings that are not stated by those 113
proceedings to be special funds. 114
(14) "Using school district" means the school district, or 116
two or more school districts acting jointly, that are the 117
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ultimate users of the capital facilities financed with net 118
proceeds.
(B) Subject to Sections 2n and 17 of Article VIII of the 120
Ohio Constitution, the state, by the issuing authority, is 121
authorized to issue and sell, as provided in this section and in 122
an aggregate principal amount not to exceed one hundred fifty 123
million dollars, general obligations of this state for the 124
purpose of paying costs of capital facilities. 125
(C) Each issue of obligations shall be authorized by 127
resolution or order of the issuing authority. The bond 128
proceedings shall provide for or authorize the manner for 129
determining the principal amount or maximum principal amount of 130
obligations of an issue, the principal maturity or maturities, 131
the interest rate or rates, the date of and the dates of payment 132
of interest on the obligations, their denominations, and the 133
place or places of payment of debt service which may be within or 134
outside the state. The latest principal maturity may not be 135
later than the earlier of the thirty-first day of December of the 136
twenty-fifth calendar year after the year of issuance of the 137
particular obligations or of the twenty-fifth calendar year after 138
the year in which the original obligation to pay was issued or 139
entered into. Sections 9.96, 9.98, 9.981, 9.982, and 9.983 of 140
the Revised Code apply to obligations. The purpose of the 141
obligations may be stated in the bond proceedings in general 142
terms, such as "paying costs of capital facilities for a system 143
of common schools throughout the state as authorized by Section 144
2n of Article VIII of the Ohio Constitution."
(D) Net proceeds of obligations shall be deposited into 146
the School Building Program Assistance Fund created by section 147
3318.25 of the Revised Code. 148
(E) The issuing authority may appoint or provide for the 150
appointment of paying agents, bond registrars, securities 151
depositories, clearing corporations, and transfer agents, and may 152
retain the services of financial advisers and accounting experts, 153
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and retain or contract for the services of marketing, 154
remarketing, indexing, and administrative agents, other 155
consultants, and independent contractors, including printing 156
services, as are necessary in the judgment of the issuing 157
authority to carry out this section. Financing costs are 158
payable, as may be provided in the bond proceedings, from the 159
proceeds of the obligations, from special funds, or from other 160
moneys available for the purpose.
(F) The bond proceedings may contain additional provisions 162
customary or appropriate to the financing or to the obligations 163
or to particular obligations including, but not limited to, 164
provisions for: 165
(1) The redemption of obligations prior to maturity at the 167
option of the state or of the holder or upon the occurrence of 168
certain conditions, and at a particular price or prices and under 169
particular terms and conditions; 170
(2) The form of and other terms of the obligations; 172
(3) The establishment, deposit, investment, and 174
application of special funds, and the safeguarding of moneys on 175
hand or on deposit, in lieu of the applicability of provisions of 176
Chapter 131. or 135. of the Revised Code, but subject to any 177
special provisions of this section with respect to the 178
application of particular funds or moneys. Any financial 179
institution that acts as a depository of any moneys in special 180
funds or other funds under the bond proceedings may furnish 181
indemnifying bonds or pledge securities as required by the 182
issuing authority.
(4) Any or every provision of the bond proceedings being 184
binding upon the issuing authority and upon such using school 185
district, state agency, or government entity, officer, board, 186
commission, authority, agency, department, or other person or 187
body as may from time to time be authorized to take actions as 188
may be necessary to perform all or any part of the duty required 189
by the provision;
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(5) The maintenance of each pledge or instrument 191
comprising part of the bond proceedings until the state has fully 192
paid or provided for the payment of the debt service on the 193
obligations or met other stated conditions; 194
(6) In the event of default in any payments required to be 196
made by the bond proceedings, or by any other agreement of the 197
issuing authority made as part of a contract under which the 198
obligations were issued or secured, including a credit 199
enhancement facility, the enforcement of those payments by 200
mandamus, suit in equity, action at law, or any combination of 201
those remedial actions;
(7) The rights and remedies of the holders or owners of 203
obligations or of book-entry interests in them, and of third 204
parties under any credit enhancement facility, and provisions for 205
protecting and enforcing those rights and remedies, including 206
limitations on rights of individual holders or owners; 207
(8) The replacement of mutilated, destroyed, lost, or 209
stolen obligations; 210
(9) The funding, refunding, or advance refunding, or other 212
provision for payment, of obligations that will then no longer be 213
outstanding for purposes of this section or of the applicable 214
bond proceedings; 215
(10) Amendment of the bond proceedings; 217
(11) Any other or additional agreements with the owners of 219
obligations, and such other provisions as the issuing authority 220
determines, including limitations, conditions, or qualifications, 221
relating to any of the foregoing. 222
(G) The Great Seal of the State or a facsimile of it may 224
be affixed to or printed on the obligations. The obligations 225
requiring execution by or for the issuing authority shall be 226
signed as provided in the bond proceedings. Any obligations may 227
be signed by the individual who on the date of execution is the 228
authorized signer although on the date of these obligations that 229
individual is not an authorized signer. In case the individual 230
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whose signature or facsimile signature appears on any obligation 231
ceases to be an authorized signer before delivery of the 232
obligation, that signature or facsimile is nevertheless valid and 233
sufficient for all purposes as if that individual had remained 234
the authorized signer until delivery. 235
(H) Obligations are investment securities under Chapter 237
1308. of the Revised Code. Obligations may be issued in bearer 238
or in registered form, registrable as to principal alone or as to 239
both principal and interest, or both, or in certificated or 240
uncertificated form, as the issuing authority determines. 241
Provision may be made for the exchange, conversion, or transfer 242
of obligations and for reasonable charges for registration, 243
exchange, conversion, and transfer. Pending preparation of final 244
or definitive obligations, the issuing authority may provide for 245
the issuance of temporary or interim instruments to be exchanged 246
for the final or definitive obligations. 247
(I) Obligations may be sold at public sale or at private 249
sale, and at such price at, above, or below par, all as provided 250
by the issuing authority in the bond proceedings. 251
(J) Except to the extent that rights are restricted by the 253
bond proceedings, any owner of obligations may by any suitable 254
form of legal proceedings protect and enforce any rights relating 255
to obligations under the laws of this state or granted by the 256
bond proceedings. Those rights include the right to compel the 257
performance of all applicable duties of the issuing authority and 258
the state. Each duty of the issuing authority and that 259
authority's officials, staff, and employees, and of each state 260
agency or using school district and its officers, members, staff, 261
or employees, undertaken pursuant to the bond proceedings, is 262
hereby established as a duty of the entity or individual having 263
authority to perform that duty, specifically enjoined by law and 264
resulting from an office, trust, or station within the meaning of 265
section 2731.01 of the Revised Code. The individuals who are 266
from time to time the issuing authority, or the issuing 267
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authority's officials, staff, or employees, are not liable in 268
their personal capacities on any obligations or otherwise under 269
the bond proceedings.
(K)(1) Subject to Sections 2n and 17 of Article VIII of 271
the Ohio Constitution and this section, the issuing authority 272
may, in addition to the authority provided in division (B) of 273
this section, authorize and provide for the issuance of 274
obligations in the form of bond anticipation notes, and may 275
provide for the renewal of those notes from time to time by the 276
issuance of new notes. The holders of notes or appertaining 277
interest coupons have the right to have debt service on those 278
notes paid solely from the moneys and special funds that are or 279
may be pledged to that payment, including the proceeds of bonds 280
or renewal notes or both, as the issuing authority provides in 281
the bond proceedings authorizing the notes. Notes may be 282
additionally secured by covenants of the issuing authority to the 283
effect that the issuing authority and the state will do all 284
things necessary for the issuance of bonds or renewal notes in 285
such principal amount and upon such terms as may be necessary to 286
provide moneys to pay when due the debt service on the notes, and 287
apply their proceeds to the extent necessary, to make full and 288
timely payment of debt service on the notes as provided in the 289
applicable bond proceedings.
In the bond proceedings authorizing the issuance of bond 291
anticipation notes the issuing authority shall set forth for the 292
bonds anticipated an estimated schedule of annual principal 293
payments the latest of which shall be no later than provided in 294
division (C) of this section. While the notes are outstanding 295
there shall be deposited, as shall be provided in the bond 296
proceedings for those notes, from the sources authorized for 297
payment of debt service on the bonds, amounts sufficient to pay 298
the principal of the bonds anticipated as set forth in that 299
estimated schedule during the time the notes are outstanding, 300
which amounts shall be used solely to pay the principal of those 301
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notes or of the bonds anticipated. 302
(2) Except as otherwise provided in this section, bonds or 304
notes authorized pursuant to division (K) of this section are 305
subject to the provisions of this section pertaining to 306
obligations generally. 307
(3) The principal amount of refunding or renewal 309
obligations issued pursuant to division (K) of this section shall 310
be in addition to the amount authorized by the General Assembly 311
as referred to in division (B) of this section, to the extent 312
that the principal amount of those obligations does not exceed 313
the then outstanding principal amount of the obligations they are 314
to refund, renew, or retire. 315
(L) Obligations are lawful investments for banks, savings 317
and loan associations, credit union share guaranty corporations, 318
trust companies, trustees, fiduciaries, insurance companies, 319
including domestic for life and domestic not for life, trustees 320
or other officers having charge of sinking and bond retirement or 321
other special funds of the state and political subdivisions and 322
taxing districts of this state, the Sinking Fund, the 323
Administrator of Workers' Compensation subject to the approval of 324
the Workers' Compensation Board, the State Teachers Retirement 325
System, the Public Employees Retirement System, the School 326
Employees Retirement System, and the Ohio Police and Fire Pension 327
Fund, notwithstanding any other provisions of the Revised Code or 328
rules adopted pursuant to those provisions by any state agency 329
with respect to investments by them, and are also acceptable as 330
security for the repayment of the deposit of public moneys. 331
(M) Unless otherwise provided or provided for in any 333
applicable bond proceedings, moneys to the credit of or in a 334
special fund shall be disbursed on the order of the issuing 335
authority. No such order is required for the payment, from the 336
bond service fund or other special fund, when due of debt service 337
or required payments under credit enhancement facilities. 338
(N) The full faith and credit, revenue, including net 340
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state lottery proceeds, and taxing power of the state are and 341
shall be pledged to the timely payment of debt service on 342
outstanding obligations as it comes due, all in accordance with 343
Section 2n of Article VIII of the Ohio Constitution and this 344
section. Moneys referred to in Section 5a of Article XII of the 345
Ohio Constitution may not be pledged or used for the payment of 346
debt service. The state covenants, and that covenant shall be 347
controlling notwithstanding any other provision of law, that the 348
state and the applicable officers and agencies of the state, 349
including the General Assembly, shall, so long as any obligations 350
are outstanding in accordance with their terms, maintain 351
statutory authority for and cause to be levied, collected, and 352
applied sufficient pledged excises, taxes, and revenues of the 353
state so that those excises, taxes, and revenues shall be 354
sufficient in amounts to pay debt service when due, to establish 356
and maintain any reserves and other requirements, and to pay 357
financing costs, including costs of or relating to credit 358
enhancement facilities, all as provided for in the bond 359
proceedings.
Those excises, taxes, and revenues are and shall be deemed 361
to be levied and collected, in addition to the purposes otherwise 362
provided for by law, to provide for the payment of debt service 363
and financing costs in accordance with this section and the bond 364
proceedings. 365
Notwithstanding division (B) of section 3770.06 of the 367
Revised Code, whenever, in the judgment of the Director of Budget 368
and Management, an amount of net state lottery proceeds is 369
necessary to be applied to the payment of debt service on 370
obligations, the Director shall transfer that amount directly 371
from the State Lottery Fund or from the Lottery Profits Education 372
Fund to the bond service fund. The provisions of this paragraph 373
are subject to any prior pledges or obligation of those amounts 374
to the payment of bond service charges as defined in division (C) 375
of section 3318.21 of the Revised Code, as referred to in 376
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division (B) of section 3770.06 of the Revised Code. 377
(O) The General Assembly has the same authority with 379
regard to obligations issued under this section and revenues 380
pledged to those obligations as it has under division (E) of 381
section 164.11 of the Revised Code with regard to obligations 382
issued under Chapter 164. of the Revised Code. 383
(P) There is hereby created in the state treasury the 385
Common Schools Capital Facilities Bond Service Fund. All moneys 386
received by the state and required by the bond proceedings, 387
consistent with this section, to be deposited, transferred, or 388
credited to the bond service fund, and all other moneys 389
transferred or allocated to or received for the purposes of that 390
fund, shall be deposited and credited to the bond service fund, 391
subject to any applicable provisions of the bond proceedings but 392
without necessity for any act of appropriation. During the 393
period beginning with the date of the first issuance of 394
obligations and continuing during the time that any obligations 395
are outstanding in accordance with their terms, so long as moneys 396
in the bond service fund are insufficient to pay debt service 397
when due on those obligations payable from that fund (except the 398
principal amounts of bond anticipation notes payable from the 399
proceeds of renewal notes or bonds anticipated) and due in the 400
particular fiscal year, a sufficient amount of moneys of the 401
state are committed and, without necessity for further act of 402
appropriation, shall be paid to the bond service fund for the 403
purpose of paying that debt service when due. For the purpose of 404
this section, and if so provided in the applicable bond 405
proceedings, debt service includes costs relating to credit
enhancement facilities that represent payment of debt service. 406
The bond service fund is a trust fund and is hereby pledged 408
to the payment of debt service. Payment of that debt service 409
shall be made or provided for by the issuing authority in 410
accordance with the bond proceedings without necessity for any 411
act of appropriation. 412
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(Q) The bond proceedings may provide for the establishment 414
of separate accounts in the bond service fund and for the 415
application of those accounts only to debt service on specific 416
obligations, and for other accounts in the bond service fund 417
within the general purposes of that fund. 418
(R) Subject to the bond proceedings pertaining to any 420
obligations then outstanding in accordance with their terms, the 421
issuing authority may in the bond proceedings pledge all, or such 422
portion as the issuing authority determines, of the moneys in the 423
bond service fund to the payment of debt service on particular 424
obligations, and for the establishment and maintenance of any 425
reserves for payment of particular debt service. 426
(S) On or before the fifteenth day of July of each fiscal 428
year, the issuing authority shall certify to the Office of Budget 429
and Management the total amount of moneys required, and sources 430
of that money, during that fiscal year to meet in full all debt 431
service and financing costs. If and so long as the moneys to the 432
credit of the bond service fund, together with any other moneys 433
available for the purpose, are insufficient to meet in full all 434
payments when due of the amount required as stated in that 435
certificate or otherwise, the Office of Budget and Management 436
shall at the times as provided in the bond proceedings transfer a 437
sufficient amount to the bond service fund from the moneys 438
derived from all excises, taxes, and other revenues of the state, 439
including net state lottery proceeds, referred to in division (N) 440
of this section.
(T) Obligations issued under this section, their transfer, 442
and the interest, interest equivalent, and other income or 443
accreted amounts on them, including any profit made on their 444
sale, exchange, or other disposition, shall at all times be free 445
from taxation within this state. 446
Section 2. (A) As used in this section, and in the 448
applicable bond proceedings unless otherwise provided: 449
(1) "Bond proceedings" means the resolutions, agreements, 451
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and credit enhancement facilities, and amendments and supplements 452
to them, or any one or more or combination of them, authorizing, 453
awarding, or providing for the terms and conditions applicable to 454
or providing for the security or liquidity of, obligations, and 455
the provisions contained in those obligations. 456
(2) "Bond service fund" means the fund created by division 458
(P) of this section, and any accounts in that fund, including all 459
moneys and investments, and earnings from investments, credited 460
and to be credited to that fund and accounts as and to the extent 461
provided in the bond proceedings. 462
(3) "Capital facilities" means capital facilities that are 464
capital facilities for state-supported and state-assisted 465
institutions of higher education. 466
(4) "Costs of capital facilities" means the costs of 468
acquiring, constructing, reconstructing, rehabilitating, 469
remodeling, renovating, enlarging, improving, equipping, or 470
furnishing capital facilities, and of the financing of those 471
costs. Costs of capital facilities include without limitation 472
the cost of clearance and preparation of the site and of any land 473
to be used in connection with capital facilities, the cost of any 474
indemnity and surety bonds and premiums on insurance, all related 475
direct administrative expenses and allocable portions of direct 476
costs of the state and the using institution, costs of 477
engineering and architectural services, designs, plans, 478
specifications, surveys, and estimates of cost, financing costs, 479
interest on obligations from their date to the time when interest 480
is to be paid from sources other than proceeds of obligations, 481
amounts necessary to establish any reserves as required by the 482
bond proceedings, the reimbursement of all moneys advanced or 483
applied by or borrowed from the using institution or any 484
governmental agency for the payment of any item of costs of 485
capital facilities, and all other expenses necessary or incident 486
to planning or determining feasibility or practicability with 487
respect to capital facilities, and such other expenses as may be 488
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necessary or incident to the acquisition, construction, 489
reconstruction, rehabilitation, remodeling, renovation, 490
enlargement, improvement, equipment, and furnishing of capital 491
facilities, the financing of those costs, and the placing of the 492
capital facilities in use and operation, including any one, part 493
of, or combination of those classes of costs and expenses.
(5) "Credit enhancement facilities," "financing costs," 495
and "interest" or "interest equivalent" have the same meanings as 496
in section 133.01 of the Revised Code. 497
(6) "Debt service" means principal, including any 499
mandatory sinking fund or redemption requirements for retirement 500
of obligations, interest and other accreted amounts, interest 501
equivalent, and any redemption premium, payable on obligations. 502
(7) "Issuing authority" means the Ohio Public Facilities 504
Commission established in section 154.03 of the Revised Code. 505
(8) "Net proceeds" means amounts received from the sale of 507
obligations, excluding: amounts used to refund or retire 508
outstanding obligations, amounts required to be deposited into 509
special funds pursuant to the applicable bond proceedings, and 510
amounts to be used to pay financing costs. 511
(9) "Obligations" means bonds, notes, or other evidences 513
of obligation of the state, including any appertaining interest 514
coupons, issued pursuant to this section. 515
(10) "Principal amount" means the aggregate of the amount 517
as stated or provided for in the applicable bond proceedings as 518
the amount on which interest or interest equivalent on particular 519
obligations is initially calculated. Principal amount does not 520
include any premium paid to the state by the initial purchaser of 521
the obligations. 522
(11) "Special funds" or "funds," unless the context 524
indicates otherwise, means the bond service fund, and any other 525
funds, including any reserve funds, created under the bond 526
proceedings and stated to be special funds in those proceedings, 527
including moneys and investments, and earnings from investments, 528
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credited and to be credited to the particular fund. Special 529
funds do not include the Higher Education Improvement Fund 530
created by division (F) of section 154.21 of the Revised Code, or 531
other funds created by the bond proceedings that are not stated 532
by those proceedings to be special funds. 533
(12) "State-supported or state-assisted institutions of 535
higher education" means a state university or college, or 536
community college district, technical college district, 537
university branch district, or state community college, or two or 538
more institutions acting jointly, that are the ultimate users of 539
the capital facilities financed with net proceeds. "State 540
university or college" means each of the state universities 541
identified in section 3345.011 of the Revised Code, the 542
Northeastern Ohio Universities College of Medicine, and the 543
Medical College of Ohio at Toledo.
(B) Subject to Sections 2n and 17 of Article VIII of the 545
Ohio Constitution, the state, by the issuing authority, is 546
authorized to issue and sell, as provided in this section and in 547
an aggregate principal amount or not to exceed one hundred fifty 548
million dollars, general obligations of this state for the 549
purpose of paying costs of capital facilities. 550
(C) Each issue of obligations shall be authorized by 552
resolution of the issuing authority. The bond proceedings shall 553
provide for or authorize the manner for determining the principal 554
amount or maximum principal amount of obligations of an issue, 555
the principal maturity or maturities, the interest rate or rates, 556
the date of and the dates of payment of interest on the 557
obligations, their denominations, and the place or places of 558
payment of debt service which may be within or outside the state. 559
The latest principal maturity may not be later than the earlier 560
of the thirty-first day of December of the twenty-fifth calendar 561
year after the year of issuance of the particular obligations or 562
of the twenty-fifth calendar year after the year in which the 563
original obligation to pay was issued or entered into. Sections 564
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9.96, 9.98, 9.981, 9.982, and 9.983 of the Revised Code apply to 565
obligations. The purpose of the obligations may be stated in the 566
bond proceedings in general terms, such as "paying costs of 567
capital facilities for state-supported or state-assisted 568
institutions of higher education as authorized by Section 2n of 569
Article VIII of the Ohio Constitution."
(D) Net proceeds of obligations shall be deposited into 571
the Higher Education Improvement Fund created by division (F) of 572
section 154.21 of the Revised Code. 573
(E) The issuing authority may appoint or provide for the 575
appointment of paying agents, bond registrars, securities 576
depositories, clearing corporations, and transfer agents, and may 577
retain the services of financial advisers and accounting experts, 578
and retain or contract for the services of marketing, 579
remarketing, indexing, and administrative agents, other 580
consultants, and independent contractors, including printing 581
services, as are necessary in the judgment of the issuing 582
authority to carry out this section. Financing costs are 583
payable, as may be provided in the bond proceedings, from the 584
proceeds of the obligations, from special funds, or from other 585
moneys available for the purpose.
(F) The bond proceedings may contain additional provisions 587
customary or appropriate to the financing or to the obligations 588
or to particular obligations including, but not limited to, 589
provisions for: 590
(1) The redemption of obligations prior to maturity at the 592
option of the state or of the holder or upon the occurrence of 593
certain conditions, and at a particular price or prices and under 594
particular terms and conditions; 595
(2) The form of and other terms of the obligations; 597
(3) The establishment, deposit, investment, and 599
application of special funds, and the safeguarding of moneys on 600
hand or on deposit, in lieu of the applicability of provisions of 601
Chapter 131. or 135. of the Revised Code, but subject to any 602
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special provisions of this section with respect to the 603
application of particular funds or moneys. Any financial 604
institution that acts as a depository of any moneys in special 605
funds or other funds under the bond proceedings may furnish 606
indemnifying bonds or pledge securities as required by the 607
issuing authority.
(4) Any or every provision of the bond proceedings being 609
binding upon the issuing authority and upon such using 610
institution, state agency, or government entity, officer, board, 611
commission, authority, agency, department, or other person or 612
body as may from time to time be authorized to take actions as 613
may be necessary to perform all or any part of the duty required 614
by the provision;
(5) The maintenance of each pledge or instrument 616
comprising part of the bond proceedings until the state has fully 617
paid or provided for the payment of the debt service on the 618
obligations or met other stated conditions; 619
(6) In the event of default in any payments required to be 621
made by the bond proceedings, or by any other agreement of the 622
issuing authority made as part of a contract under which the 623
obligations were issued or secured, including a credit 624
enhancement facility, the enforcement of those payments by 625
mandamus, suit in equity, action at law, or any combination of 626
those remedial actions;
(7) The rights and remedies of the holders or owners of 628
obligations or of book-entry interests in them, and of third 629
parties under any credit enhancement facility, and provisions for 630
protecting and enforcing those rights and remedies, including 631
limitations on rights of individual holders or owners; 632
(8) The replacement of mutilated, destroyed, lost, or 634
stolen obligations; 635
(9) The funding, refunding, or advance refunding, or other 637
provision for payment, of obligations that will then no longer be 638
outstanding for purposes of this section or of the applicable 639
18
bond proceedings; 640
(10) Amendment of the bond proceedings; 642
(11) Any other or additional agreements with the owners of 644
obligations, and such other provisions as the issuing authority 645
determines, including limitations, conditions, or qualifications, 646
relating to any of the foregoing. 647
(G) The Great Seal of the State or a facsimile of it may 649
be affixed to or printed on the obligations. The obligations 650
requiring execution for the issuing authority shall be signed as 651
provided in the bond proceedings. Any obligations may be signed 652
by the individual who on the date of execution is the authorized 653
signer although on the date of these obligations that individual 654
is not an authorized signer. In case the individual whose 655
signature or facsimile signature appears on any obligation ceases 656
to be an authorized signer before delivery of the obligation, 657
that signature or facsimile is nevertheless valid and sufficient 658
for all purposes as if that individual had remained the 659
authorized signer until delivery. 660
(H) Obligations are investment securities under Chapter 662
1308. of the Revised Code. Obligations may be issued in bearer 663
or in registered form, registrable as to principal alone or as to 664
both principal and interest, or both, or in certificated or 665
uncertificated form, as the issuing authority determines. 666
Provision may be made for the exchange, conversion, or transfer 667
of obligations and for reasonable charges for registration, 668
exchange, conversion, and transfer. Pending preparation of final 669
or definitive obligations, the issuing authority may provide for 670
the issuance of temporary or interim instruments to be exchanged 672
for the final or definitive obligations. 673
(I) Obligations may be sold at public sale or at private 675
sale, and at such price at, above, or below par, all as provided 676
by the issuing authority in the bond proceedings. 677
(J) Except to the extent that rights are restricted by the 679
bond proceedings, any owner of obligations may by any suitable 680
19
form of legal proceedings protect and enforce any rights relating 681
to obligations under the laws of this state or granted by the 682
bond proceedings. Those rights include the right to compel the 683
performance of all applicable duties of the issuing authority and 684
the state. Each duty of the issuing authority and its members, 685
officers, staff, and employees, and of each state agency or using 686
institution and its officers, members, staff, or employees, 687
undertaken pursuant to the bond proceedings, is hereby 688
established as a duty of the entity or individual having 689
authority to perform that duty, specifically enjoined by law and 690
resulting from an office, trust, or station within the meaning of 691
section 2731.01 of the Revised Code. The individuals who are 692
from time to time the members of the issuing authority, or 693
designees of those members pursuant to section 154.04 of the 694
Revised Code, or its officers, staff, or employees, are not 695
liable in their personal capacities on any obligations or 696
otherwise under the bond proceedings.
(K)(1) Subject to Sections 2n and 17 of Article VIII of 698
the Ohio Constitution and this section, the issuing authority 699
may, in addition to the authority provided in division (B) of 700
this section, authorize and provide for the issuance of 701
obligations in the form of bond anticipation notes, and may 702
provide for the renewal of those notes from time to time by the 703
issuance of new notes. The holders of notes or appertaining 704
interest coupons have the right to have debt service on those 705
notes paid solely from the moneys and special funds that are or 706
may be pledged to that payment, including the proceeds of bonds 707
or renewal notes or both, as the issuing authority provides in 708
the bond proceedings authorizing the notes. Notes may be 709
additionally secured by covenants of the issuing authority to the 710
effect that the issuing authority and the state will do all 711
things necessary for the issuance of bonds or renewal notes in 712
such principal amount and upon such terms as may be necessary to 713
provide moneys to pay when due the debt service on the notes, and 714
20
apply their proceeds to the extent necessary, to make full and 715
timely payment of debt service on the notes as provided in the 716
applicable bond proceedings.
In the bond proceedings authorizing the issuance of bond 718
anticipation notes the issuing authority shall set forth for the 719
bonds anticipated an estimated schedule of annual principal 720
payments the latest of which shall be no later than provided in 721
division (C) of this section. While the notes are outstanding 722
there shall be deposited, as shall be provided in the bond 723
proceedings for those notes, from the sources authorized for 724
payment of debt service on the bonds, amounts sufficient to pay 725
the principal of the bonds anticipated as set forth in that 726
estimated schedule during the time the notes are outstanding, 727
which amounts shall be used solely to pay the principal of those 728
notes or of the bonds anticipated. 729
(2) Except as otherwise provided in this section, bonds or 731
notes authorized pursuant to division (K) of this section are 732
subject to the provisions of this section pertaining to 733
obligations generally. 734
(3) The principal amount of refunding or renewal 736
obligations issued pursuant to division (K) of this section shall 737
be in addition to the amount authorized by the General Assembly 738
as referred to in division (B) of this section, to the extent 739
that the principal amount of those obligations does not exceed 740
the then outstanding principal amount of the obligations they are 741
to refund, renew, or retire. 742
(L) Obligations are lawful investments for banks, savings 744
and loan associations, credit union share guaranty corporations, 745
trust companies, trustees, fiduciaries, insurance companies, 746
including domestic for life and domestic not for life, trustees 747
or other officers having charge of sinking and bond retirement or 748
other special funds of the state and political subdivisions and 749
taxing districts of this state, the Sinking Fund, the 750
Administrator of Workers' Compensation subject to the approval of 751
21
the Workers' Compensation Board, the State Teachers Retirement 752
System, the Public Employees Retirement System, the School 753
Employees Retirement System, and the Ohio Police and Fire Pension 754
Fund, notwithstanding any other provisions of the Revised Code or 755
rules adopted pursuant to those provisions by any state agency 756
with respect to investments by them, and are also acceptable as 757
security for the repayment of the deposit of public moneys. 758
(M) Unless otherwise provided or provided for in any 760
applicable bond proceedings, moneys to the credit of or in a 761
special fund shall be disbursed on the order of the issuing 762
authority. No such order is required for the payment, from the 763
bond service fund or other special fund, when due of debt service 764
or required payments under credit enhancement facilities. 765
(N) The full faith and credit, revenue, and taxing power 767
of the state are and shall be pledged to the timely payment of 768
debt service on outstanding obligations as it comes due, all in 769
accordance with Section 2n of Article VIII of the Ohio 770
Constitution and this section. Moneys referred to in Section 5a 771
of Article XII of the Ohio Constitution, and net state lottery 772
proceeds, may not be pledged or used for the payment of debt 773
service. The state covenants, and that covenant shall be 774
controlling notwithstanding any other provision of law, that the 775
state and the applicable officers and agencies of the state, 776
including the General Assembly, shall, so long as any obligations 777
are outstanding in accordance with their terms, maintain 778
statutory authority for and cause to be levied, collected, and 779
applied sufficient pledged excises, taxes, and revenues of the 780
state so that those excises, taxes, and revenues shall be 781
sufficient in amounts to pay debt service when due, to establish 783
and maintain any reserves and other requirements, and to pay 784
financing costs, including costs of or relating to credit 785
enhancement facilities, all as provided for in the bond 786
proceedings.
Those excises, taxes, and revenues are and shall be deemed 788
22
to be levied and collected, in addition to the purposes otherwise 789
provided for by law, to provide for the payment of debt service 790
and financing costs in accordance with this section and the bond 791
proceedings. 792
(O) The General Assembly has the same authority with 794
regard to obligations issued under this section as it has under 795
division (E) of section 164.11 of the Revised Code with regard to 796
obligations issued under Chapter 164. of the Revised Code. 797
(P) There is hereby created in the state treasury the 799
Higher Education Capital Facilities Bond Service Fund. All 800
moneys received by the state and required by the bond 801
proceedings, consistent with this section, to be deposited, 802
transferred, or credited to the bond service fund, and all other 803
moneys transferred or allocated to or received for the purposes 804
of that fund, shall be deposited and credited to the bond service 805
fund, subject to any applicable provisions of the bond 806
proceedings but without necessity for any act of appropriation. 807
During the period beginning with the date of the first issuance 808
of obligations and continuing during the time that any 809
obligations are outstanding in accordance with their terms, so 810
long as moneys in the bond service fund are insufficient to pay 811
debt service when due on those obligations payable from that fund 812
(except the principal amounts of bond anticipation notes payable 813
from the proceeds of renewal notes or bonds anticipated) and due 814
in the particular fiscal year, a sufficient amount of moneys of 815
the state are committed and, without necessity for further act of 816
appropriation, shall be paid to the bond service fund for the 817
purpose of paying that debt service when due. For the purpose of 818
this section, and if so provided in the applicable bond 819
proceedings, debt service includes costs relating to credit 820
enhancement facilities that represent payment of debt service. 821
The bond service fund is a trust fund and is hereby pledged 823
to the payment of debt service. Payment of that debt service 824
shall be made or provided for by the issuing authority in 825
23
accordance with the bond proceedings without necessity for any 826
act of appropriation. 827
(Q) The bond proceedings may provide for the establishment 829
of separate accounts in the bond service fund and for the 830
application of those accounts only to debt service on specific 831
obligations, and for other accounts in the bond service fund 832
within the general purposes of that fund. 833
(R) Subject to the bond proceedings pertaining to any 835
obligations then outstanding in accordance with their terms, the 836
issuing authority may in the bond proceedings pledge all, or such 837
portion as the issuing authority determines, of the moneys in the 838
bond service fund to the payment of debt service on particular 839
obligations, and for the establishment and maintenance of any 840
reserves for payment of particular debt service. 841
(S) If and so long as the moneys to the credit of the bond 843
service fund, together with any other moneys available for the 844
purpose, are insufficient to meet in full all payments when due 845
of the amount required, the Office of Budget and Management shall 846
at the times as provided in the bond proceedings transfer a 847
sufficient amount to the bond service fund from the moneys 848
derived from all excises, taxes, and other revenues of the state 849
referred to in division (N) of this section. 850
(T) Obligations issued under this section, their transfer, 852
and the interest, interest equivalent, and other income or 853
accreted amounts on them, including any profit made on their 854
sale, exchange, or other disposition, shall at all times be free 855
from taxation within this state. 856
Section 3. (A) Unless otherwise provided in any 858
applicable bond proceedings, moneys to the credit of special 859
funds referred to in Sections 1 and 2 of this act may be invested 860
by or on behalf of the state only in one or more of the 861
following:
(1) Notes, bonds, or other direct obligations of the 863
United States or of any agency or instrumentality of the United 864
24
States, or in no-front-end-load money market mutual funds 865
consisting exclusively of those obligations, or in repurchase 866
agreements, including those issued by any fiduciary, secured by 867
those obligations, or in collective investment funds consisting 868
exclusively of those obligations; 869
(2) Obligations of this state or any political subdivision 871
of this state; 872
(3) Certificates of deposit of any national bank located 874
in this state and any bank, as defined in section 1101.01 of the 875
Revised Code, subject to inspection by the Superintendent of 876
Financial Institutions; 877
(4) The Treasurer of State's pooled investment program 879
under section 135.45 of the Revised Code. 880
(B) The income from investments referred to in this 882
section shall be credited to such special funds or otherwise as 883
the issuing authority determines in the bond proceedings. Those 884
investments may be sold or exchanged at times as the issuing 885
authority determines, provides for, or authorizes. 886
Section 4. (A) This section is in implementation of 888
division (D) of Section 17 of Article VIII of the Ohio 889
Constitution for purposes of issuing direct obligations of the 890
state subject to that section during the fiscal year ending June 891
30, 2000.
(B) For purposes of the computation of debt service under 893
Section 17 of Article VIII of the Ohio Constitution, there shall 894
be included debt service payable on securities that are direct 895
obligations of the state issued under Article VIII of the Ohio 896
Constitution, and on those bonds anticipated by bond anticipation 897
notes, to the extent that debt service on those securities is 898
anticipated to be paid from the General Revenue Fund or net state 900
lottery proceeds. Examples of securities the debt service on 901
which is not anticipated to be paid from either of those sources 902
are bonds of the state issued for highway purposes pursuant to 903
Section 2i or 2m of Article VIII of the Ohio Constitution, which, 904
25
although general obligations of the state, have been and are 905
anticipated to be paid from highway user receipts and not from 906
the General Revenue Fund or net state lottery proceeds. 907
(C) If there is no separate constitutional or statutory 909
provision applicable for the purpose, debt service on bonds 910
anticipated by bond anticipation notes shall be estimated as 911
provided in this division. That amount, to be certified either 912
by the issuing authority of the particular notes or by the 913
Governor or the Governor's designee pursuant to division (E) of 914
this section, shall be the estimated amount that would have been 915
payable on bonds maturing serially in each fiscal year after the 916
fiscal year of issuance of the notes over the maximum period of 917
maturity for the bonds authorized in the particular governing 918
constitutional or statutory provision, as if those bonds had been 919
issued without the prior issuance of the notes, and computed on a 920
substantially level debt service basis applying an interest rate 921
or rates certified to be market rates at the time. 922
(D) In the case of securities issued to refund or retire 924
securities, the debt service on the new securities shall be 925
counted and the debt service on the securities being refunded or 926
retired shall not be counted, to the extent that the principal 927
amount of the new securities does not exceed the then outstanding 928
principal amount of the prior securities. 929
(E) The Governor, or the Governor's designee for the 931
purpose, shall determine and certify the fiscal year amounts 932
required to be applied or set aside for payment of debt service, 933
the securities to which that debt service relates, the total 934
estimated revenues of the state for the General Revenue Fund and 935
from net state lottery proceeds during the particular fiscal 936
year, and any other financial data necessary or appropriate for 937
the purpose of the computations under division (A) of Section 17 938
of Article VIII of the Ohio Constitution and this section. Those 939
determinations and certifications shall be filed with the 940
Director of Budget and Management, the Treasurer of State, and 941
26
the issuing authority for the particular obligations, at or prior 942
to the time those securities are issued. The Governor's designee 943
for the purpose may be the Director or Assistant Director of 944
Budget and Management, or any employee or official of the 945
Governor's office.
(F) For purposes of this section: 947
(1) "Interest" or "interest equivalent," "outstanding," 949
and "securities" have the same meanings as in section 133.01 of 950
the Revised Code.
(2) "Debt service" means principal, including any 952
mandatory sinking fund deposits and mandatory redemption 953
payments, and interest or interest equivalent payable on 954
securities, as those payments are stated to come due and to be 955
payable.
Section 5. There is hereby appropriated both from the 957
General Revenue Fund and the Common Schools Capital Facilities 958
Bond Service Fund created in Section 1 of this act, the amount of 959
$13,650,000 for Fiscal Year 2000 and $14,600,000 for Fiscal Year 960
2001, to be used for the purpose of paying the debt service on 961
general obligation bonds issued pursuant to Section 2n of Article 962
VIII of the Ohio Constitution and Section 1 of this act. If it 963
is determined that additional appropriations are necessary for 964
the purpose, such amounts are hereby appropriated. The GRF 965
appropriation item 230-428 in Section 10 of Am. Sub. H.B. No. 282 966
of the 123rd General Assembly is hereby reduced by $13,650,000 967
for Fiscal Year 2000 and $14,600,000 for Fiscal Year 2001. 968
Section 6. There is hereby appropriated both from the 970
General Revenue Fund and the Higher Education Capital Facilities 971
Bond Service Fund created in Section 2 of this act, the amount of 972
$4,375,000 for Fiscal Year 2000 and $17,225,000 for Fiscal Year 973
2001, to be used for the purpose of paying the debt service on 974
general obligation bonds issued pursuant to Section 2n of Article 975
VIII of the Ohio Constitution and Section 2 of this act. If it 976
is determined that additional appropriations are necessary for 977
27
the purpose, such amounts are hereby appropriated. The GRF 978
appropriation item 235-401 in Section 7 of Am. Sub. H.B. No. 282 979
of the 123rd General Assembly is hereby reduced by $4,375,000 for 980
Fiscal Year 2000 and $17,225,000 for Fiscal Year 2001. 981
Section 7. This act is hereby declared to be an emergency 983
measure necessary for the immediate preservation of the public 984
peace, health, and safety. The reasons for such necessity lie in 985
the fact that immediate effective action is necessary in order to 986
promptly implement Sections 2n and 17 of Article VIII of the Ohio 987
Constitution adopted on November 2, 1999, by a majority of the 988
electors of the state voting thereon, and thereby authorize 989
general obligation bonds to be issued for facilities for 990
elementary and secondary education throughout the state and for 991
state-supported and state-assisted institutions of higher 992
education, at a lower interest cost to the state, and to enable 993
other direct obligations of the state to be issued consistent 994
with Section 17 of Article VIII of the Ohio Constitution. 995
Therefore, this act shall go into immediate effect. 996