As Reported by the House Commerce and Labor Committee

127th General Assembly Regular Session 2007-2008

Sub. H. B. No. 79

Representative Batchelder 

Cosponsors: Representatives McGregor, J., Fessler, Latta, Stebelton, Webster, Uecker 

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A BILL

To amend sections 109.579, 4121.12, 4121.121,

1

4123.01, 4123.34, 4123.351, 4123.412, 4123.44,

2

4123.442, 4123.444, 4123.445, 4127.05, 4131.03,

3

and 4131.13, to amend, for the purpose of

4

adopting new section numbers as indicated in

5

parentheses, sections 4123.443 (4123.448),

6

4123.444 (4123.445), and 4123.445 (4123.446), and

7

to enact new sections 4123.443 and 4123.444 and

8

section 4123.447 of the Revised Code to specify

9

the classes of investments in which the

10

Administrator of Workers' Compensation may invest

11

the funds specified in the Workers' Compensation

12

Law and to require the Administrator to have

13

criminal records checks conducted for employees of

14

investment consultants with whom the Administrator

15

contracts to facilitate the investment of those

16

funds.

17

BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO:

Section 1. That sections 109.579, 4121.12, 4121.121, 4123.01,	18
4123.34, 4123.351, 4123.412, 4123.44, 4123.442, 4123.444,	19
4123.445, 4127.05, 4131.03, and 4131.13 be amended, sections	20
4123.443 (4123.448), 4123.444 (4123.445), and 4123.445 (4123.446)	21
be amended for the purpose of adopting new section numbers as	22
indicated in parentheses, and new sections 4123.443 and 4123.444	23
and section 4123.447 of the Revised Code be enacted to read as	24
follows:	25

Sec. 109.579.  (A) On receipt of a request pursuant to	26
division (B) of section 4123.4444123.445 of the Revised Code, a	27
completed form prescribed pursuant to division (C)(1) of this	28
section, and a set of fingerprint impressions obtained in the	29
manner described in division (C)(2) of this section, the	30
superintendent of the bureau of criminal identification and	31
investigation shall conduct a criminal records check in the manner	32
described in division (B) of this section to determine whether any	33
information exists that indicates that the person who is the	34
subject of the request previously has been convicted of or pleaded	35
guilty to any criminal offense involving theft, receiving stolen	36
property, embezzlement, forgery, fraud, passing bad checks, money	37
laundering, drug trafficking, or any criminal offense involving	38
money or securities, as set forth in Chapters 2909., 2911., 2913.,	39
2915., 2921., 2923., and 2925. of the Revised Code or other law of	40
this state, or the laws of any other state or of the United States	41
that are substantially equivalent to those offenses.	42

(B) The superintendent shall conduct a criminal records check	43
pursuant to division (A) of this section as follows:	44

(1) The superintendent shall review or cause to be reviewed	45
any relevant information gathered and compiled by the bureau under	46
division (A) of section 109.57 of the Revised Code that relates to	47
the person who is the subject of the request, including any	48
relevant information contained in records that have been sealed	49
under section 2953.32 of the Revised Code.	50

(2) If the request received by the superintendent asks for	51
information from the federal bureau of investigation, the	52
superintendent shall request from the federal bureau of	53
investigation any information it has with respect to the person	54
who is the subject of the request. The superintendent shall review	55
or cause to be reviewed any information that the superintendent	56
receives from the federal bureau of investigation.	57

(3) The superintendent shall forward the results of a	58
criminal records check conducted pursuant to this division to the	59
administrator of workers' compensation.	60

(C)(1) The superintendent shall prescribe a form to obtain	61
the information necessary to conduct a criminal records check from	62
any person for whom a criminal records check is requested pursuant	63
to division (B) of section 4123.4444123.445 of the Revised Code.	64
The form that the superintendent prescribes pursuant to this	65
division may be in a tangible format, in an electronic format, or	66
in both tangible and electronic formats.	67

(2) The superintendent shall prescribe standard impression	68
sheets to obtain the fingerprint impressions of any person for	69
whom a criminal records check is requested pursuant to section	70
4123.4444123.445 of the Revised Code. Any person for whom the	71
administrator requests the superintendent to conduct a criminal	72
records check pursuant to that section shall have the person's	73
fingerprint impressions made at a county sheriff's office, a	74
municipal police department, or any other entity with the ability	75
to make fingerprint impressions on the standard impression sheets	76
prescribed by the superintendent. The office, department, or	77
entity may charge the person a reasonable fee for making the	78
impressions. The standard impression sheets the superintendent	79
prescribes pursuant to this division may be in a tangible format,	80
in an electronic format, or in both tangible and electronic	81
formats.	82

(3) The superintendent may prescribe methods of forwarding	83
fingerprint impressions and information necessary to conduct a	84
criminal records check. The methods shall include, but are not	85
limited to, electronic methods.	86

(D) A determination whether any information exists that	87
indicates that a person previously has been convicted of or	88
pleaded guilty to any offense listed or described in division (A)	89
of this section that the superintendent makes pursuant to	90
information considered in a criminal records check under this	91
section is valid for the person who is the subject of that	92
criminal records check for a period of one year after the date the	93
superintendent makes that determination.	94

(E) The superintendent shall prescribe and charge a	95
reasonable fee for providing a criminal records check requested	96
under section 4123.4444123.445 of the Revised Code. If another	97
request for a criminal records check is made under this section	98
for a person for whom a valid determination under division (D) of	99
this section is available, the superintendent shall provide the	100
determination for a reduced fee.	101

Sec. 4121.12.  (A) There is hereby created the bureau of	102
workers' compensation board of directors consisting of eleven	103
members to be appointed by the governor with the advice and	104
consent of the senate. One member shall be an individual who, on	105
account of the individual's previous vocation, employment, or	106
affiliations, can be classed as a representative of employees; two	107
members shall be individuals who, on account of their previous	108
vocation, employment, or affiliations, can be classed as	109
representatives of employee organizations and at least one of	110
these two individuals shall be a member of the executive committee	111
of the largest statewide labor federation; three members shall be	112
individuals who, on account of their previous vocation,	113
employment, or affiliations, can be classed as representatives of	114
employers, one of whom represents self-insuring employers, one of	115
whom is a state fund employer who employs one hundred or more	116
employees, and one of whom is a state fund employer who employs	117
less than one hundred employees; two members shall be individuals	118
who, on account of their vocation, employment, or affiliations,	119
can be classed as investment and securities experts who have	120
direct experience in the management, analysis, supervision, or	121
investment of assets and are residents of this state; one member	122
who shall be a certified public accountant; one member who shall	123
be an actuary who is a member in good standing with the American	124
academy of actuaries or who is an associate or fellow with the	125
society of actuaries; and one member shall represent the public	126
and also be an individual who, on account of the individual's	127
previous vocation, employment, or affiliations, cannot be classed	128
as either predominantly representative of employees or of	129
employers. The governor shall select the chairperson of the board	130
who shall serve as chairperson at the pleasure of the governor.	131

None of the members of the board, within one year immediately	132
preceding the member's appointment, shall have been employed by	133
the bureau of workers' compensation or by any person, partnership,	134
or corporation that has provided to the bureau services of a	135
financial or investment nature, including the management,	136
analysis, supervision, or investment of assets.	137

(B) Of the initial appointments made to the board, the	138
governor shall appoint the member who represents employees, one	139
member who represents employers, and the member who represents	140
the public to a term ending one year after the effective date of	141
this amendmentJune 11, 2007; one member who represents employers,	142
one member who represents employee organizations, one member who	143
is an investment and securities expert, and the member who is a	144
certified public accountant to a term ending two years after the	145
effective date of this amendmentJune 11, 2007; and one member who	146
represents employers, one member who represents employee	147
organizations, one member who is an investment and securities	148
expert, and the member who is an actuary to a term ending three	149
years after the effective date of this amendmentJune 11, 2007.	150
Thereafter, terms of office shall be for three years, with each	151
term ending on the same day of the same month as did the term that	152
it succeeds. Each member shall hold office from the date of the	153
member's appointment until the end of the term for which the	154
member was appointed.	155

Members may be reappointed. Any member appointed to fill a	156
vacancy occurring prior to the expiration date of the term for	157
which the member's predecessor was appointed shall hold office as	158
a member for the remainder of that term. A member shall continue	159
in office subsequent to the expiration date of the member's term	160
until a successor takes office or until a period of sixty days has	161
elapsed, whichever occurs first.	162

(C) In making appointments to the board, the governor shall	163
select the members from the list of names submitted by the	164
workers' compensation board of directors nominating committee	165
pursuant to this division. The nominating committee shall submit	166
to the governor a list containing four separate names for each of	167
the members on the board. Within fourteen days after the	168
submission of the list, the governor shall appoint individuals	169
from the list.	170

Within sixty days after a vacancy occurring as a result of	171
the expiration of a term and within thirty days after other	172
vacancies occurring on the board, the nominating committee shall	173
submit an initial list containing four names for each vacancy.	174
Within fourteen days after the submission of the initial list, the	175
governor either shall appoint individuals from that list or	176
request the nominating committee to submit another list of four	177
names for each member the governor has not appointed from the	178
initial list, which list the nominating committee shall submit to	179
the governor within fourteen days after the governor's request.	180
The governor then shall appoint, within seven days after the	181
submission of the second list, one of the individuals from either	182
list to fill the vacancy for which the governor has not made an	183
appointment from the initial list. With respect to the filling of	184
vacancies, the nominating committee shall provide the governor	185
with a list of four individuals who are, in the judgment of the	186
nominating committee, the most fully qualified to accede to	187
membership on the board.	188

In order for the name of an individual to be submitted to the	189
governor under this division, the nominating committee shall	190
approve the individual by an affirmative vote of a majority of its	191
members.	192

(D) All members of the board shall receive their reasonable	193
and necessary expenses pursuant to section 126.31 of the Revised	194
Code while engaged in the performance of their duties as members	195
and also shall receive an annual salary not to exceed sixty	196
thousand dollars in total, payable on the following basis:	197

(1) Except as provided in division (D)(2) of this section, a	198
member shall receive two thousand five hundred dollars during a	199
month in which the member attends one or more meetings of the	200
board and shall receive no payment during a month in which the	201
member attends no meeting of the board.	202

(2) A member may receive no more than thirty thousand dollars	203
per year to compensate the member for attending meetings of the	204
board, regardless of the number of meetings held by the board	205
during a year or the number of meetings in excess of twelve within	206
a year that the member attends.	207

(3) Except as provided in division (D)(4) of this section, if	208
a member serves on the workers' compensation audit committee,	209
workers' compensation actuarial committee, or the workers'	210
compensation investment committee, the member shall receive two	211
thousand five hundred dollars during a month in which the member	212
attends one or more meetings of the committee on which the member	213
serves and shall receive no payment during any month in which the	214
member attends no meeting of that committee.	215

(4) A member may receive no more than thirty thousand dollars	216
per year to compensate the member for attending meetings of any of	217
the committees specified in division (D)(3) of this section,	218
regardless of the number of meetings held by a committee during a	219
year or the number of committees on which a member serves.	220

The chairperson of the board shall set the meeting dates of	221
the board as necessary to perform the duties of the board under	222
this chapter and Chapters 4123., 4125., 4127., 4131., and 4167. of	223
the Revised Code. The board shall meet at least twelve times a	224
year. The administrator of workers' compensation shall provide	225
professional and clerical assistance to the board, as the board	226
considers appropriate.	227

(E) Before entering upon the duties of office, each appointed	228
member of the board shall take an oath of office as required by	229
sections 3.22 and 3.23 of the Revised Code and file in the office	230
of the secretary of state the bond required under section 4121.127	231
of the Revised Code.	232

(F) The board shall:

233

(1) Establish the overall administrative policy for the	234
bureau for the purposes of this chapter and Chapters 4123., 4125.,	235
4127., 4131., and 4167. of the Revised Code;	236

(2) Review progress of the bureau in meeting its cost and	237
quality objectives and in complying with this chapter and Chapters	238
4123., 4125., 4127., 4131., and 4167. of the Revised Code;	239

(3) Submit an annual report to the president of the senate,	240
the speaker of the house of representatives, the governor, and the	241
workers' compensation council and include all of the following in	242
that report:	243

(a) An evaluation of the cost and quality objectives of the	244
bureau;	245

(b) A statement of the net assets available for the provision	246
of compensation and benefits under this chapter and Chapters	247
4123., 4127., and 4131. of the Revised Code as of the last day of	248
the fiscal year;	249

(c) A statement of any changes that occurred in the net	250
assets available, including employer premiums and net investment	251
income, for the provision of compensation and benefits and payment	252
of administrative expenses, between the first and last day of the	253
fiscal year immediately preceding the date of the report;	254

(d) The following information for each of the six consecutive	255
fiscal years occurring previous to the report:	256

(i) A schedule of the net assets available for compensation	257
and benefits;	258

(ii) The annual cost of the payment of compensation and	259
benefits;	260

(iii) Annual administrative expenses incurred;

261

(iv) Annual employer premiums allocated for the provision of	262
compensation and benefits.	263

(e) A description of any significant changes that occurred	264
during the six years for which the board provided the information	265
required under division (F)(3)(d) of this section that affect the	266
ability of the board to compare that information from year to	267
year.	268

(4) Review all independent financial audits of the bureau.	269
The administrator shall provide access to records of the bureau to	270
facilitate the review required under this division.	271

(5) Study issues as requested by the administrator or the	272
governor;	273

(6) Contract with all of the following:

274

(a) An independent actuarial firm to assist the board in	275
making recommendations to the administrator regarding premium	276
rates;	277

(b) An outside investment counsel to assist the workers'	278
compensation investment committee in fulfilling its duties;	279

(c) An independent fiduciary counsel to assist the board in	280
the performance of its duties.	281

(7) Approve the investment policy developed by the workers'	282
compensation investment committee pursuant to section 4121.129 of	283
the Revised Code if the policy satisfies the requirements	284
specified in section 4123.442 of the Revised Code.	285

(8) Review and publish the investment policy no less than	286
annually and make copies available to interested parties.	287

(9) Prohibit, on a prospective basis, any specific investment	288
it finds to be contrary to the investment policy approved by the	289
board.	290

(10) Vote to open each investment class and allow the	291
administrator to invest in an investment class only if the board,	292
by a majority vote, opens that class;	293

(11) After opening a class but prior to the administrator	294
investing in that class, adopt rules establishing due diligence	295
standards for employees of the bureau to follow when investing in	296
that class and establish policies and procedures to review and	297
monitor the performance and value of each investment class;	298

(12) Submit a report annually on the performance and value of	299
each investment class to the governor, the president and minority	300
leader of the senate, and the speaker and minority leader of the	301
house of representatives.	302

(13) Advise and consent on all of the following:

303

(a) Administrative rules the administrator submits to it	304
pursuant to division (B)(5) of section 4121.121 of the Revised	305
Code for the classification of occupations or industries, for	306
premium rates and contributions, for the amount to be credited to	307
the surplus fund, for rules and systems of rating, rate revisions,	308
and merit rating;	309

(b) The duties and authority conferred upon the administrator	310
pursuant to section 4121.37 of the Revised Code;	311

(c) Rules the administrator adopts for the health partnership	312
program and the qualified health plan system, as provided in	313
sections 4121.44, 4121.441, and 4121.442 of the Revised Code;	314

(d) Rules the administrator submits to it pursuant to Chapter	315
4167. of the Revised Code regarding the public employment risk	316
reduction program and the protection of public health care workers	317
from exposure incidents.	318

As used in this division, "public health care worker" and	319
"exposure incident" have the same meanings as in section 4167.25	320
of the Revised Code.	321

(14)(11) Perform all duties required under this chapter and	322
Chapters 4123., 4125., 4127., 4131., and 4167. of the Revised	323
Code;	324

(15)(12) Meet with the governor on an annual basis to discuss	325
the administrator's performance of the duties specified in this	326
chapter and Chapters 4123., 4125., 4127., 4131., and 4167. of the	327
Revised Code;	328

(16)(13) Develop and participate in a bureau of workers'	329
compensation board of directors education program that consists of	330
all of the following:	331

(a) An orientation component for newly appointed members;

332

(b) A continuing education component for board members who	333
have served for at least one year;	334

(c) A curriculum that includes education about each of the	335
following topics:	336

(i) Board member duties and responsibilities;

337

(ii) Compensation and benefits paid pursuant to this chapter	338
and Chapters 4123., 4127., and 4131. of the Revised Code;	339

(iii) Ethics;

340

(iv) Governance processes and procedures;

341

(v) Actuarial soundness;

342

(vi) Investments;

343

(vii) Any other subject matter the board believes is	344
reasonably related to the duties of a board member.	345

(17)(14) Submit the program developed pursuant to division	346
(F)(16)(13) of this section to the workers' compensation council	347
for approval;	348

(18)(15) Hold all sessions, classes, and other events for the	349
program developed pursuant to division (F)(16)(13) of this section	350
in this state.	351

(G) The board may do both of the following:

352

(1) Vote to close any investment class;

353

(2) Createcreate any committees in addition to the workers'	354
compensation audit committee, the workers' compensation actuarial	355
committee, and the workers' compensation investment committee that	356
the board determines are necessary to assist the board in	357
performing its duties.	358

(H) The office of a member of the board who is convicted of	359
or pleads guilty to a felony, a theft offense as defined in	360
section 2913.01 of the Revised Code, or a violation of section	361
102.02, 102.03, 102.04, 2921.02, 2921.11, 2921.13, 2921.31,	362
2921.41, 2921.42, 2921.43, or 2921.44 of the Revised Code shall be	363
deemed vacant. The vacancy shall be filled in the same manner as	364
the original appointment. A person who has pleaded guilty to or	365
been convicted of an offense of that nature is ineligible to be a	366
member of the board. A member who receives a bill of indictment	367
for any of the offenses specified in this section shall be	368
automatically suspended from the board pending resolution of the	369
criminal matter.	370

(I) For the purposes of division (G)(1) of section 121.22 of	371
the Revised Code, the meeting between the governor and the board	372
to review the administrator's performance as required under	373
division (F)(15)(12) of this section shall be considered a meeting	374
regarding the employment of the administrator.	375

Sec. 4121.121.  (A) There is hereby created the bureau of	376
workers' compensation, which shall be administered by the	377
administrator of workers' compensation. A person appointed to the	378
position of administrator shall possess significant management	379
experience in effectively managing an organization or	380
organizations of substantial size and complexity. A person	381
appointed to the position of administrator also shall possess a	382
minimum of five years of experience in the field of workers'	383
compensation insurance or in another insurance industry, except as	384
otherwise provided when the conditions specified in division (C)	385
of this section are satisfied. The governor shall appoint the	386
administrator as provided in section 121.03 of the Revised Code,	387
and the administrator shall serve at the pleasure of the governor.	388
The governor shall fix the administrator's salary on the basis of	389
the administrator's experience and the administrator's	390
responsibilities and duties under this chapter and Chapters 4123.,	391
4125., 4127., 4131., and 4167. of the Revised Code. The governor	392
shall not appoint to the position of administrator any person who	393
has, or whose spouse has, given a contribution to the campaign	394
committee of the governor in an amount greater than one thousand	395
dollars during the two-year period immediately preceding the date	396
of the appointment of the administrator.	397

The administrator shall hold no other public office and shall	398
devote full time to the duties of administrator. Before entering	399
upon the duties of the office, the administrator shall take an	400
oath of office as required by sections 3.22 and 3.23 of the	401
Revised Code, and shall file in the office of the secretary of	402
state, a bond signed by the administrator and by surety approved	403
by the governor, for the sum of fifty thousand dollars payable to	404
the state, conditioned upon the faithful performance of the	405
administrator's duties.	406

(B) The administrator is responsible for the management of	407
the bureau and for the discharge of all administrative duties	408
imposed upon the administrator in this chapter and Chapters 4123.,	409
4125., 4127., 4131., and 4167. of the Revised Code, and in the	410
discharge thereof shall do all of the following:	411

(1) Perform all acts and exercise all authorities and powers,	412
discretionary and otherwise that are required of or vested in the	413
bureau or any of its employees in this chapter and Chapters 4123.,	414
4125., 4127., 4131., and 4167. of the Revised Code, except the	415
acts and the exercise of authority and power that is required of	416
and vested in the bureau of workers' compensation board of	417
directors or the industrial commission pursuant to those chapters.	418
The treasurer of state shall honor all warrants signed by the	419
administrator, or by one or more of the administrator's employees,	420
authorized by the administrator in writing, or bearing the	421
facsimile signature of the administrator or such employee under	422
sections 4123.42 and 4123.44 of the Revised Code.	423

(2) Employ, direct, and supervise all employees required in	424
connection with the performance of the duties assigned to the	425
bureau by this chapter and Chapters 4123., 4125., 4127., 4131.,	426
and 4167. of the Revised Code, including an actuary, and may	427
establish job classification plans and compensation for all	428
employees of the bureau provided that this grant of authority	429
shall not be construed as affecting any employee for whom the	430
state employment relations board has established an appropriate	431
bargaining unit under section 4117.06 of the Revised Code. All	432
positions of employment in the bureau are in the classified civil	433
service except those employees the administrator may appoint to	434
serve at the administrator's pleasure in the unclassified civil	435
service pursuant to section 124.11 of the Revised Code. The	436
administrator shall fix the salaries of employees the	437
administrator appoints to serve at the administrator's pleasure,	438
including the chief operating officer, staff physicians, and other	439
senior management personnel of the bureau and shall establish the	440
compensation of staff attorneys of the bureau's legal section and	441
their immediate supervisors, and take whatever steps are necessary	442
to provide adequate compensation for other staff attorneys.	443

The administrator may appoint a person who holds a certified	444
position in the classified service within the bureau to a	445
position in the unclassified service within the bureau. A person	446
appointed pursuant to this division to a position in the	447
unclassified service shall retain the right to resume the	448
position and status held by the person in the classified service	449
immediately prior to the person's appointment in the unclassified	450
service, regardless of the number of positions the person held in	451
the unclassified service. An employee's right to resume a	452
position in the classified service may only be exercised when the	453
administrator demotes the employee to a pay range lower than the	454
employee's current pay range or revokes the employee's	455
appointment to the unclassified service. An employee forfeits the	456
right to resume a position in the classified service when the	457
employee is removed from the position in the unclassified service	458
due to incompetence, inefficiency, dishonesty, drunkenness,	459
immoral conduct, insubordination, discourteous treatment of the	460
public, neglect of duty, violation of this chapter or Chapter	461
124., 4123., 4125., 4127., 4131., or 4167. of the Revised Code,	462
violation of the rules of the director of administrative services	463
or the administrator, any other failure of good behavior, any	464
other acts of misfeasance, malfeasance, or nonfeasance in office,	465
or conviction of a felony. An employee also forfeits the right to	466
resume a position in the classified service upon transfer to a	467
different agency.	468

Reinstatement to a position in the classified service shall	469
be to a position substantially equal to that position in the	470
classified service held previously, as certified by the department	471
of administrative services. If the position the person previously	472
held in the classified service has been placed in the unclassified	473
service or is otherwise unavailable, the person shall be appointed	474
to a position in the classified service within the bureau that the	475
director of administrative services certifies is comparable in	476
compensation to the position the person previously held in the	477
classified service. Service in the position in the unclassified	478
service shall be counted as service in the position in the	479
classified service held by the person immediately prior to the	480
person's appointment in the unclassified service. When a person is	481
reinstated to a position in the classified service as provided in	482
this division, the person is entitled to all rights, status, and	483
benefits accruing to the position during the person's time of	484
service in the position in the unclassified service.	485

(3) Reorganize the work of the bureau, its sections,	486
departments, and offices to the extent necessary to achieve the	487
most efficient performance of its functions and to that end may	488
establish, change, or abolish positions and assign and reassign	489
duties and responsibilities of every employee of the bureau. All	490
persons employed by the industrial commission in positions that,	491
after November 3, 1989, are supervised and directed by the	492
administrator under this section are transferred to the bureau in	493
their respective classifications but subject to reassignment and	494
reclassification of position and compensation as the administrator	495
determines to be in the interest of efficient administration. The	496
civil service status of any person employed by the industrial	497
commission is not affected by this section. Personnel employed by	498
the bureau or the industrial commission who are subject to	499
Chapter 4117. of the Revised Code shall retain all of their	500
rights and benefits conferred pursuant to that chapter as it	501
presently exists or is hereafter amended and nothing in this	502
chapter or Chapter 4123. of the Revised Code shall be construed	503
as eliminating or interfering with Chapter 4117. of the Revised	504
Code or the rights and benefits conferred under that chapter to	505
public employees or to any bargaining unit.	506

(4) Provide offices, equipment, supplies, and other	507
facilities for the bureau.	508

(5) Prepare and submit to the board information the	509
administrator considers pertinent or the board requires, together	510
with the administrator's recommendations, in the form of	511
administrative rules, for the advice and consent of the board, for	512
classifications of occupations or industries, for premium rates	513
and contributions, for the amount to be credited to the surplus	514
fund, for rules and systems of rating, rate revisions, and merit	515
rating. The administrator shall obtain, prepare, and submit any	516
other information the board requires for the prompt and efficient	517
discharge of its duties.	518

(6) Keep the accounts required by division (A) of section	519
4123.34 of the Revised Code and all other accounts and records	520
necessary to the collection, administration, and distribution of	521
the workers' compensation funds and shall obtain the statistical	522
and other information required by section 4123.19 of the Revised	523
Code.	524

(7) Exercise the investment powers vested in the	525
administrator by section 4123.44 of the Revised Code in accordance	526
with the investment policy approved by the board pursuant to	527
section 4121.12 of the Revised Code and in consultation with the	528
chief investment officer of the bureau of workers' compensation.	529
The administrator shall not engage in any prohibited investment	530
activity specified by the board pursuant to division (F)(9) of	531
section 4121.12 of the Revised Code and shall not invest in any	532
type of investment specified in divisions (B)(1) to (10) of	533
section 4123.442 of the Revised Code. All business shall be	534
transacted, all funds invested, all warrants for money drawn and	535
payments made, and all cash and securities and other property	536
held, in the name of the bureau, or in the name of its nominee,	537
provided that nominees are authorized by the administrator solely	538
for the purpose of facilitating the transfer of securities, and	539
restricted to the administrator and designated employees.	540

(8) Make contracts for and supervise the construction of any	541
project or improvement or the construction or repair of buildings	542
under the control of the bureau.	543

(9) Purchase supplies, materials, equipment, and services;	544
make contracts for, operate, and superintend the telephone, other	545
telecommunication, and computer services for the use of the	546
bureau; and make contracts in connection with office reproduction,	547
forms management, printing, and other services. Notwithstanding	548
sections 125.12 to 125.14 of the Revised Code, the administrator	549
may transfer surplus computers and computer equipment directly to	550
an accredited public school within the state. The computers and	551
computer equipment may be repaired or refurbished prior to the	552
transfer.	553

(10) Prepare and submit to the board an annual budget for	554
internal operating purposes for the board's approval. The	555
administrator also shall, separately from the budget the	556
industrial commission submits, prepare and submit to the director	557
of budget and management a budget for each biennium. The budgets	558
submitted to the board and the director shall include estimates of	559
the costs and necessary expenditures of the bureau in the	560
discharge of any duty imposed by law.	561

(11) As promptly as possible in the course of efficient	562
administration, decentralize and relocate such of the personnel	563
and activities of the bureau as is appropriate to the end that the	564
receipt, investigation, determination, and payment of claims may	565
be undertaken at or near the place of injury or the residence of	566
the claimant and for that purpose establish regional offices, in	567
such places as the administrator considers proper, capable of	568
discharging as many of the functions of the bureau as is	569
practicable so as to promote prompt and efficient administration	570
in the processing of claims. All active and inactive lost-time	571
claims files shall be held at the service office responsible for	572
the claim. A claimant, at the claimant's request, shall be	573
provided with information by telephone as to the location of the	574
file pertaining to the claimant's claim. The administrator shall	575
ensure that all service office employees report directly to the	576
director for their service office.	577

(12) Provide a written binder on new coverage where the	578
administrator considers it to be in the best interest of the risk.	579
The administrator, or any other person authorized by the	580
administrator, shall grant the binder upon submission of a request	581
for coverage by the employer. A binder is effective for a period	582
of thirty days from date of issuance and is nonrenewable. Payroll	583
reports and premium charges shall coincide with the effective date	584
of the binder.	585

(13) Set standards for the reasonable and maximum handling	586
time of claims payment functions, ensure, by rules, the impartial	587
and prompt treatment of all claims and employer risk accounts, and	588
establish a secure, accurate method of time stamping all incoming	589
mail and documents hand delivered to bureau employees.	590

(14) Ensure that all employees of the bureau follow the	591
orders and rules of the industrial commission as such orders and	592
rules relate to the industrial commission's overall adjudicatory	593
policy-making and management duties under this chapter and	594
Chapters 4123., 4127., and 4131. of the Revised Code.	595

(15) Manage and operate a data processing system with a	596
common data base for the use of both the bureau and the industrial	597
commission and, in consultation with the industrial commission,	598
using electronic data processing equipment, shall develop a	599
claims tracking system that is sufficient to monitor the status	600
of a claim at any time and that lists appeals that have been	601
filed and orders or determinations that have been issued pursuant	602
to section 4123.511 or 4123.512 of the Revised Code, including	603
the dates of such filings and issuances.	604

(16) Establish and maintain a medical section within the	605
bureau. The medical section shall do all of the following:	606

(a) Assist the administrator in establishing standard medical	607
fees, approving medical procedures, and determining eligibility	608
and reasonableness of the compensation payments for medical,	609
hospital, and nursing services, and in establishing guidelines for	610
payment policies which recognize usual, customary, and reasonable	611
methods of payment for covered services;	612

(b) Provide a resource to respond to questions from claims	613
examiners for employees of the bureau;	614

(c) Audit fee bill payments;

615

(d) Implement a program to utilize, to the maximum extent	616
possible, electronic data processing equipment for storage of	617
information to facilitate authorizations of compensation payments	618
for medical, hospital, drug, and nursing services;	619

(e) Perform other duties assigned to it by the administrator.

620

(17) Appoint, as the administrator determines necessary,	621
panels to review and advise the administrator on disputes arising	622
over a determination that a health care service or supply provided	623
to a claimant is not covered under this chapter or Chapter 4123.,	624
4127., or 4131. of the Revised Code or is medically unnecessary.	625
If an individual health care provider is involved in the dispute,	626
the panel shall consist of individuals licensed pursuant to the	627
same section of the Revised Code as such health care provider.	628

(18) Pursuant to section 4123.65 of the Revised Code, approve	629
applications for the final settlement of claims for compensation	630
or benefits under this chapter and Chapters 4123., 4127., and	631
4131. of the Revised Code as the administrator determines	632
appropriate, except in regard to the applications of self-insuring	633
employers and their employees.	634

(19) Comply with section 3517.13 of the Revised Code, and	635
except in regard to contracts entered into pursuant to the	636
authority contained in section 4121.44 of the Revised Code, comply	637
with the competitive bidding procedures set forth in the Revised	638
Code for all contracts into which the administrator enters	639
provided that those contracts fall within the type of contracts	640
and dollar amounts specified in the Revised Code for competitive	641
bidding and further provided that those contracts are not	642
otherwise specifically exempt from the competitive bidding	643
procedures contained in the Revised Code.	644

(20) Adopt, with the advice and consent of the board, rules	645
for the operation of the bureau.	646

(21) Prepare and submit to the board information the	647
administrator considers pertinent or the board requires, together	648
with the administrator's recommendations, in the form of	649
administrative rules, for the advice and consent of the board, for	650
the health partnership program and the qualified health plan	651
system, as provided in sections 4121.44, 4121.441, and 4121.442 of	652
the Revised Code.	653

(C) The administrator, with the advice and consent of the	654
senate, shall appoint a chief operating officer who has a minimum	655
of five years of experience in the field of workers' compensation	656
insurance or in another similar insurance industry if the	657
administrator does not possess such experience. The chief	658
operating officer shall not commence the chief operating officer's	659
duties until after the senate consents to the chief operating	660
officer's appointment. The chief operating officer shall serve in	661
the unclassified civil service of the state.	662

Sec. 4123.01.  As used in this chapter:

663

(A)(1) "Employee" means:

664

(a) Every person in the service of the state, or of any	665
county, municipal corporation, township, or school district	666
therein, including regular members of lawfully constituted police	667
and fire departments of municipal corporations and townships,	668
whether paid or volunteer, and wherever serving within the state	669
or on temporary assignment outside thereof, and executive officers	670
of boards of education, under any appointment or contract of hire,	671
express or implied, oral or written, including any elected	672
official of the state, or of any county, municipal corporation, or	673
township, or members of boards of education.	674

As used in division (A)(1)(a) of this section, the term	675
"employee" includes the following persons when responding to an	676
inherently dangerous situation that calls for an immediate	677
response on the part of the person, regardless of whether the	678
person is within the limits of the jurisdiction of the person's	679
regular employment or voluntary service when responding, on the	680
condition that the person responds to the situation as the person	681
otherwise would if the person were on duty in the person's	682
jurisdiction:	683

(i) Off-duty peace officers. As used in division (A)(1)(a)(i)	684
of this section, "peace officer" has the same meaning as in	685
section 2935.01 of the Revised Code.	686

(ii) Off-duty firefighters, whether paid or volunteer, of a	687
lawfully constituted fire department.	688

(iii) Off-duty first responders, emergency medical	689
technicians-basic, emergency medical technicians-intermediate, or	690
emergency medical technicians-paramedic, whether paid or	691
volunteer, of an ambulance service organization or emergency	692
medical service organization pursuant to Chapter 4765. of the	693
Revised Code.	694

(b) Every person in the service of any person, firm, or	695
private corporation, including any public service corporation,	696
that (i) employs one or more persons regularly in the same	697
business or in or about the same establishment under any contract	698
of hire, express or implied, oral or written, including aliens and	699
minors, household workers who earn one hundred sixty dollars or	700
more in cash in any calendar quarter from a single household and	701
casual workers who earn one hundred sixty dollars or more in cash	702
in any calendar quarter from a single employer, or (ii) is bound	703
by any such contract of hire or by any other written contract, to	704
pay into the state insurance fund the premiums provided by this	705
chapter.	706

(c) Every person who performs labor or provides services	707
pursuant to a construction contract, as defined in section 4123.79	708
of the Revised Code, if at least ten of the following criteria	709
apply:	710

(i) The person is required to comply with instructions from	711
the other contracting party regarding the manner or method of	712
performing services;	713

(ii) The person is required by the other contracting party to	714
have particular training;	715

(iii) The person's services are integrated into the regular	716
functioning of the other contracting party;	717

(iv) The person is required to perform the work personally;

718

(v) The person is hired, supervised, or paid by the other	719
contracting party;	720

(vi) A continuing relationship exists between the person and	721
the other contracting party that contemplates continuing or	722
recurring work even if the work is not full time;	723

(vii) The person's hours of work are established by the other	724
contracting party;	725

(viii) The person is required to devote full time to the	726
business of the other contracting party;	727

(ix) The person is required to perform the work on the	728
premises of the other contracting party;	729

(x) The person is required to follow the order of work set by	730
the other contracting party;	731

(xi) The person is required to make oral or written reports	732
of progress to the other contracting party;	733

(xii) The person is paid for services on a regular basis such	734
as hourly, weekly, or monthly;	735

(xiii) The person's expenses are paid for by the other	736
contracting party;	737

(xiv) The person's tools and materials are furnished by the	738
other contracting party;	739

(xv) The person is provided with the facilities used to	740
perform services;	741

(xvi) The person does not realize a profit or suffer a loss	742
as a result of the services provided;	743

(xvii) The person is not performing services for a number of	744
employers at the same time;	745

(xviii) The person does not make the same services available	746
to the general public;	747

(xix) The other contracting party has a right to discharge	748
the person;	749

(xx) The person has the right to end the relationship with	750
the other contracting party without incurring liability pursuant	751
to an employment contract or agreement.	752

Every person in the service of any independent contractor or	753
subcontractor who has failed to pay into the state insurance fund	754
the amount of premium determined and fixed by the administrator of	755
workers' compensation for the person's employment or occupation or	756
if a self-insuring employer has failed to pay compensation and	757
benefits directly to the employer's injured and to the dependents	758
of the employer's killed employees as required by section 4123.35	759
of the Revised Code, shall be considered as the employee of the	760
person who has entered into a contract, whether written or verbal,	761
with such independent contractor unless such employees or their	762
legal representatives or beneficiaries elect, after injury or	763
death, to regard such independent contractor as the employer.	764

(2) "Employee" does not mean:

765

(a) A duly ordained, commissioned, or licensed minister or	766
assistant or associate minister of a church in the exercise of	767
ministry;	768

(b) Any officer of a family farm corporation;

769

(c) An individual incorporated as a corporation; or

770

(d) An individual who otherwise is an employee of an employer	771
but who signs the waiver and affidavit specified in section	772
4123.15 of the Revised Code on the condition that the	773
administrator has granted a waiver and exception to the	774
individual's employer under section 4123.15 of the Revised Code.	775

Any employer may elect to include as an "employee" within	776
this chapter, any person excluded from the definition of	777
"employee" pursuant to division (A)(2) of this section. If an	778
employer is a partnership, sole proprietorship, individual	779
incorporated as a corporation, or family farm corporation, such	780
employer may elect to include as an "employee" within this	781
chapter, any member of such partnership, the owner of the sole	782
proprietorship, the individual incorporated as a corporation, or	783
the officers of the family farm corporation. In the event of an	784
election, the employer shall serve upon the bureau of workers'	785
compensation written notice naming the persons to be covered,	786
include such employee's remuneration for premium purposes in all	787
future payroll reports, and no person excluded from the definition	788
of "employee" pursuant to division (A)(2) of this section,	789
proprietor, individual incorporated as a corporation, or partner	790
shall be deemed an employee within this division until the	791
employer has served such notice.	792

For informational purposes only, the bureau shall prescribe	793
such language as it considers appropriate, on such of its forms as	794
it considers appropriate, to advise employers of their right to	795
elect to include as an "employee" within this chapter a sole	796
proprietor, any member of a partnership, an individual	797
incorporated as a corporation, the officers of a family farm	798
corporation, or a person excluded from the definition of	799
"employee" under division (A)(2) of this section, that they should	800
check any health and disability insurance policy, or other form of	801
health and disability plan or contract, presently covering them,	802
or the purchase of which they may be considering, to determine	803
whether such policy, plan, or contract excludes benefits for	804
illness or injury that they might have elected to have covered by	805
workers' compensation.	806

(B) "Employer" means:

807

(1) The state, including state hospitals, each county,	808
municipal corporation, township, school district, and hospital	809
owned by a political subdivision or subdivisions other than the	810
state;	811

(2) Every person, firm, professional employer organization as	812
defined in section 4125.01 of the Revised Code, and private	813
corporation, including any public service corporation, that (a)	814
has in service one or more employees or shared employees regularly	815
in the same business or in or about the same establishment under	816
any contract of hire, express or implied, oral or written, or (b)	817
is bound by any such contract of hire or by any other written	818
contract, to pay into the insurance fund the premiums provided by	819
this chapter.	820

All such employers are subject to this chapter. Any member of	821
a firm or association, who regularly performs manual labor in or	822
about a mine, factory, or other establishment, including a	823
household establishment, shall be considered an employee in	824
determining whether such person, firm, or private corporation, or	825
public service corporation, has in its service, one or more	826
employees and the employer shall report the income derived from	827
such labor to the bureau as part of the payroll of such employer,	828
and such member shall thereupon be entitled to all the benefits of	829
an employee.	830

(C) "Injury" includes any injury, whether caused by external	831
accidental means or accidental in character and result, received	832
in the course of, and arising out of, the injured employee's	833
employment. "Injury" does not include:	834

(1) Psychiatric conditions except where the claimant's	835
psychiatric conditions have arisen from an injury or occupational	836
disease sustained by that claimant or where the claimant's	837
psychiatric conditions have arisen from sexual conduct in which	838
the claimant was forced by threat of physical harm to engage or	839
participate;	840

(2) Injury or disability caused primarily by the natural	841
deterioration of tissue, an organ, or part of the body;	842

(3) Injury or disability incurred in voluntary participation	843
in an employer-sponsored recreation or fitness activity if the	844
employee signs a waiver of the employee's right to compensation or	845
benefits under this chapter prior to engaging in the recreation or	846
fitness activity;	847

(4) A condition that pre-existed an injury unless that	848
pre-existing condition is substantially aggravated by the injury.	849
Such a substantial aggravation must be documented by objective	850
diagnostic findings, objective clinical findings, or objective	851
test results. Subjective complaints may be evidence of such a	852
substantial aggravation. However, subjective complaints without	853
objective diagnostic findings, objective clinical findings, or	854
objective test results are insufficient to substantiate a	855
substantial aggravation.	856

(D) "Child" includes a posthumous child and a child legally	857
adopted prior to the injury.	858

(E) "Family farm corporation" means a corporation founded for	859
the purpose of farming agricultural land in which the majority of	860
the voting stock is held by and the majority of the stockholders	861
are persons or the spouse of persons related to each other within	862
the fourth degree of kinship, according to the rules of the civil	863
law, and at least one of the related persons is residing on or	864
actively operating the farm, and none of whose stockholders are a	865
corporation. A family farm corporation does not cease to qualify	866
under this division where, by reason of any devise, bequest, or	867
the operation of the laws of descent or distribution, the	868
ownership of shares of voting stock is transferred to another	869
person, as long as that person is within the degree of kinship	870
stipulated in this division.	871

(F) "Occupational disease" means a disease contracted in the	872
course of employment, which by its causes and the characteristics	873
of its manifestation or the condition of the employment results in	874
a hazard which distinguishes the employment in character from	875
employment generally, and the employment creates a risk of	876
contracting the disease in greater degree and in a different	877
manner from the public in general.	878

(G) "Self-insuring employer" means an employer who is granted	879
the privilege of paying compensation and benefits directly under	880
section 4123.35 of the Revised Code, including a board of county	881
commissioners for the sole purpose of constructing a sports	882
facility as defined in section 307.696 of the Revised Code,	883
provided that the electors of the county in which the sports	884
facility is to be built have approved construction of a sports	885
facility by ballot election no later than November 6, 1997.	886

(H) "Public employer" means an employer as defined in	887
division (B)(1) of this section.	888

(I) "Sexual conduct" means vaginal intercourse between a male	889
and female; anal intercourse, fellatio, and cunnilingus between	890
persons regardless of gender; and, without privilege to do so, the	891
insertion, however slight, of any part of the body or any	892
instrument, apparatus, or other object into the vaginal or anal	893
cavity of another. Penetration, however slight, is sufficient to	894
complete vaginal or anal intercourse.	895

(J) "Bureau of workers' compensation custodial funds" means	896
the state insurance fund created in section 4123.30 of the	897
Revised Code, the premium payment security fund created in	898
section 4123.34 of the Revised Code, the self-insuring employer	899
guaranty fund created in section 4123.351 of the Revised Code,	900
the disabled worker relief fund created in section 4123.412 of	901
the Revised Code, the public work-relief employees' compensation	902
fund created in section 4127.05 of the Revised Code, the	903
coal-workers pneumoconiosis fund created in section 4131.03 of	904
the Revised Code, and the marine industry fund created in section	905
4131.13 of the Revised Code.	906

Sec. 4123.34.  It shall be the duty of the bureau of workers'	907
compensation board of directors and the administrator of workers'	908
compensation to safeguard and maintain the solvency of the state	909
insurance fund and all other funds specified in this chapter and	910
Chapters 4121., 4127., and 4131. of the Revised Code. The	911
administrator, in the exercise of the powers and discretion	912
conferred upon the administrator in section 4123.29 of the Revised	913
Code, shall fix and maintain, with the advice and consent of the	914
board, for each class of occupation or industry, the lowest	915
possible rates of premium consistent with the maintenance of a	916
solvent state insurance fund and the creation and maintenance of a	917
reasonable surplus, after the payment of legitimate claims for	918
injury, occupational disease, and death that the administrator	919
authorizes to be paid from the state insurance fund for the	920
benefit of injured, diseased, and the dependents of killed	921
employees. In establishing rates, the administrator shall take	922
into account the necessity of ensuring sufficient money is set	923
aside in the premium payment security fund to cover any defaults	924
in premium obligations. The administrator shall observe all of the	925
following requirements in fixing the rates of premium for the	926
risks of occupations or industries:	927

(A) The administrator shall keep an accurate account of the	928
money paid in premiums by each of the several classes of	929
occupations or industries, and the losses on account of injuries,	930
occupational disease, and death of employees thereof, and also	931
keep an account of the money received from each individual	932
employer and the amount of losses incurred against the state	933
insurance fund on account of injuries, occupational disease, and	934
death of the employees of the employer.	935

(B) Ten per cent of the money paid into the state insurance	936
fund shall be set aside for the creation of a surplus until the	937
surplus amounts to the sum of one hundred thousand dollars, after	938
which time, whenever necessary in the judgment of the	939
administrator to guarantee a solvent state insurance fund, a sum	940
not exceeding five per cent of all the money paid into the state	941
insurance fund shall be credited to the surplus fund. A revision	942
of basic rates shall be made annually on the first day of July.	943

Notwithstanding any provision of the law to the contrary, one	944
hundred eighty days after the effective date on which	945
self-insuring employers first may elect under division (D) of	946
section 4121.66 of the Revised Code to directly pay for	947
rehabilitation expenses, the administrator shall calculate the	948
deficit, if any, in the portion of surplus fund that is used for	949
reimbursement to self-insuring employers for all expenses other	950
than handicapped reimbursement under section 4123.343 of the	951
Revised Code. The administrator, from time to time, may determine	952
whether the surplus fund has such a deficit and may assess all	953
self-insuring employers who participated in the portion of the	954
surplus fund during the accrual of the deficit and who during that	955
time period have not made the election under division (D) of	956
section 4121.66 of the Revised Code the amount the administrator	957
determines necessary to reduce the deficit.	958

Revisions of basic rates shall be in accordance with the	959
oldest four of the last five calendar years of the combined	960
accident and occupational disease experience of the administrator	961
in the administration of this chapter, as shown by the accounts	962
kept as provided in this section, excluding the experience of	963
employers that are no longer active if the administrator	964
determines that the inclusion of those employers would have a	965
significant negative impact on the remainder of the employers in a	966
particular manual classification; and the administrator shall	967
adopt rules, with the advice and consent of the board, governing	968
rate revisions, the object of which shall be to make an equitable	969
distribution of losses among the several classes of occupation or	970
industry, which rules shall be general in their application.	971

(C) The administrator may apply that form of rating system	972
that the administrator finds is best calculated to merit rate or	973
individually rate the risk more equitably, predicated upon the	974
basis of its individual industrial accident and occupational	975
disease experience, and may encourage and stimulate accident	976
prevention. The administrator shall develop fixed and equitable	977
rules controlling the rating system, which rules shall conserve to	978
each risk the basic principles of workers' compensation insurance.	979

(D) The administrator, from the money paid into the state	980
insurance fund, shall set aside into an account of the state	981
insurance fund titled a premium payment security fund sufficient	982
money to pay for any premiums due from an employer and uncollected	983
that are in excess of the employer's premium security deposit.	984

The fund shall be in the custody of the treasurer of state.	985
The administrator may invest the surplus and reserve belonging to	986
the fund in accordance with section 4123.44 of the Revised Code.	987
All investment earnings of the fund shall be deposited in the	988
fund. Disbursements from the fund shall be made by the bureau of	989
workers' compensation upon order of the administrator to the state	990
insurance fund. The use of the moneys held by the premium payment	991
security fund is restricted to reimbursement to the state	992
insurance fund of premiums due and uncollected in excess of an	993
employer's premium security deposit. The moneys constituting the	994
premium payment security fund shall be maintained without regard	995
to or reliance upon any other fund. This section does not prevent	996
the deposit or investment of the premium payment security fund	997
with any other fund created by this chapter, but the premium	998
payment security fund is separate and distinct for every other	999
purpose and a strict accounting thereof shall be maintained.	1000

(E) The administrator may grant discounts on premium rates	1001
for employers who meet either of the following requirements:	1002

(1) Have not incurred a compensable injury for one year or	1003
more and who maintain an employee safety committee or similar	1004
organization or make periodic safety inspections of the workplace.	1005

(2) Successfully complete a loss prevention program	1006
prescribed by the superintendent of the division of safety and	1007
hygiene and conducted by the division or by any other person	1008
approved by the superintendent.	1009

(F)(1) In determining the premium rates for the construction	1010
industry the administrator shall calculate the employers' premiums	1011
based upon the actual remuneration construction industry employees	1012
receive from construction industry employers, provided that the	1013
amount of remuneration the administrator uses in calculating the	1014
premiums shall not exceed an average weekly wage equal to one	1015
hundred fifty per cent of the statewide average weekly wage as	1016
defined in division (C) of section 4123.62 of the Revised Code.	1017

(2) Division (F)(1) of this section shall not be construed as	1018
affecting the manner in which benefits to a claimant are awarded	1019
under this chapter.	1020

(3) As used in division (F) of this section, "construction	1021
industry" includes any activity performed in connection with the	1022
erection, alteration, repair, replacement, renovation,	1023
installation, or demolition of any building, structure, highway,	1024
or bridge.	1025

Sec. 4123.351.  (A) The administrator of workers'	1026
compensation shall require every self-insuring employer to pay a	1027
contribution, calculated under this section, to the self-insuring	1028
employers' guaranty fund established pursuant to this section. The	1029
fund shall provide for payment of compensation and benefits to	1030
employees of the self-insuring employer in order to cover any	1031
default in payment by that employer.	1032

(B) The bureau of workers' compensation shall operate the	1033
self-insuring employers' guaranty fund for self-insuring	1034
employers. The administrator annually shall establish the	1035
contributions due from self-insuring employers for the fund at	1036
rates as low as possible but such as will assure sufficient moneys	1037
to guarantee the payment of any claims against the fund. The	1038
bureau's operation of the fund is not subject to sections 3929.10	1039
to 3929.18 of the Revised Code or to regulation by the	1040
superintendent of insurance.	1041

(C) If a self-insuring employer defaults, the bureau shall	1042
recover the amounts paid as a result of the default from the	1043
self-insuring employers' guaranty fund. If a self-insuring	1044
employer defaults and is in compliance with this section for the	1045
payment of contributions to the fund, such self-insuring employer	1046
is entitled to the immunity conferred by section 4123.74 of the	1047
Revised Code for any claim arising during any period the employer	1048
is in compliance with this section.	1049

(D)(1) There is hereby established a self-insuring employers'	1050
guaranty fund, which shall be in the custody of the treasurer of	1051
state and which shall be separate from the other funds established	1052
and administered pursuant to this chapter. The fund shall consist	1053
of contributions and other payments made by self-insuring	1054
employers under this section. All investment earnings of the fund	1055
shall be credited to the fund. The bureau shall make disbursements	1056
from the fund pursuant to this section.	1057

(2) The administrator has the same powers tomay invest any	1058
of the surplus orand reserve belonging to the fund as are	1059
delegated to the administrator underin accordance with section	1060
4123.44 of the Revised Code with respect to the state insurance	1061
fund. The administrator shall apply interest earned solely to the	1062
reduction of assessments for contributions from self-insuring	1063
employers and to the payments required due to defaults.	1064

(3) If the bureau of workers' compensation board of directors	1065
determines that reinsurance of the risks of the fund is necessary	1066
to assure solvency of the fund, the board may:	1067

(a) Enter into contracts for the purchase of reinsurance	1068
coverage of the risks of the fund with any company or agency	1069
authorized by law to issue contracts of reinsurance;	1070

(b) Require the administrator to pay the cost of reinsurance	1071
from the fund;	1072

(c) Include the costs of reinsurance as a liability and	1073
estimated liability of the fund.	1074

(E) The administrator, with the advice and consent of the	1075
board, may adopt rules pursuant to Chapter 119. of the Revised	1076
Code for the implementation of this section, including a rule,	1077
notwithstanding division (C) of this section, requiring	1078
self-insuring employers to provide security in addition to the	1079
contribution to the self-insuring employers' guaranty fund	1080
required by this section. The additional security required by the	1081
rule, as the administrator determines appropriate, shall be	1082
sufficient and adequate to provide for financial assurance to meet	1083
the obligations of self-insuring employers under this chapter and	1084
Chapter 4121. of the Revised Code.	1085

(F) The purchase of coverage under this section by	1086
self-insuring employers is valid notwithstanding the prohibitions	1087
contained in division (A) of section 4123.82 of the Revised Code	1088
and is in addition to the indemnity contracts that self-insuring	1089
employers may purchase pursuant to division (B) of section 4123.82	1090
of the Revised Code.	1091

(G) The administrator, on behalf of the self-insuring	1092
employers' guaranty fund, has the rights of reimbursement and	1093
subrogation and shall collect from a defaulting self-insuring	1094
employer or other liable person all amounts the administrator has	1095
paid or reasonably expects to pay from the fund on account of the	1096
defaulting self-insuring employer.	1097

(H) The assessments for contributions, the administration of	1098
the self-insuring employers' guaranty fund, the investment of the	1099
money in the fund, and the payment of liabilities incurred by the	1100
fund do not create any liability upon the state.	1101

Except for a gross abuse of discretion, neither the board,	1102
nor the individual members thereof, nor the administrator shall	1103
incur any obligation or liability respecting the assessments for	1104
contributions, the administration of the self-insuring employers'	1105
guaranty fund, the investment of the fund, or the payment of	1106
liabilities therefrom.	1107

Sec. 4123.412.  For the relief of persons who are permanently	1108
and totally disabled as the result of injury or disease sustained	1109
in the course of their employment and who are receiving workers'	1110
compensation which is payable to them by virtue of and under the	1111
laws of this state in amounts, the total of which, when combined	1112
with disability benefits received pursuant to the Social Security	1113
Act is less than three hundred forty-two dollars per month	1114
adjusted annually as provided in division (B) of section 4123.62	1115
of the Revised Code, there is hereby created a separate fund to be	1116
known as the disabled workers' relief fund, which fund shall	1117
consist of the sums that are from time to time appropriated by the	1118
general assembly and made available to the order of the bureau of	1119
workers' compensation to carry out the objects and purposes of	1120
sections 4123.412 to 4123.418 of the Revised Code. The fund shall	1121
be in the custody of the treasurer of the state. The	1122
administrator may invest the surplus and reserve belonging to the	1123
fund in accordance with section 4123.44 of the Revised Code.	1124
Disbursements from the fund shall be made by the bureau to those	1125
persons entitled to participate therein and in amounts to each	1126
participant as is provided in section 4123.414 of the Revised	1127
Code. All investment earnings of the fund shall be credited to the	1128
fund.	1129

Sec. 4123.44.  The members of the bureau of workers'	1130
compensation board of directors, the administrator of workers'	1131
compensation, and the bureau of workers' compensation chief	1132
investment officer are the trustees of the state insurance fund	1133
bureau of workers' compensation custodial funds. The	1134
administrator, in accordance with sections 4121.126 and 4121.127	1135
of the Revised Code and the investment policy approved by the	1136
board pursuant to section 4121.12 of the Revised Code, and in	1137
consultation with the bureau of workers' compensation chief	1138
investment officer, may invest any of the surplus or reserve	1139
belonging to each of the state insurance fundbureau of workers'	1140
compensation custodial funds in the classes of investments	1141
specified in section 4123.443 of the Revised Code. The	1142
administrator and the bureau of workers' compensation chief	1143
investment officer shall not deviate from the investment policy	1144
approved by the board without the approval of the workers'	1145
compensation investment committee and the board.	1146

The administrator shall not invest in any type of investment	1147
specified in divisions (B)(1) to (10) of section 4123.442 of the	1148
Revised Code.	1149

The administrator and other fiduciaries shall discharge their	1150
duties with respect to the funds with the care, skill, prudence,	1151
and diligence under the circumstances then prevailing that a	1152
prudent person acting in a like capacity and familiar with such	1153
matters would use in the conduct of an enterprise of a like	1154
character and with like aims, and by diversifying the investments	1155
of the assets of the funds so as to minimize the risk of large	1156
losses, unless under the circumstances it is clearly prudent not	1157
to do so.	1158

To facilitate investment of the funds, the administrator may	1159
establish a partnership, trust, limited liability company,	1160
corporation, including a corporation exempt from taxation under	1161
the Internal Revenue Code, 100 Stat. 2085, 26 U.S.C. 1, as	1162
amended, or any other legal entity authorized to transact business	1163
in this state.	1164

When reporting on the performance of investments, the	1165
administrator shall comply with the performance presentation	1166
standards established by the association for investment management	1167
and research.	1168

All investments shall be purchased at current market prices	1169
and the evidences of title to the investments shall be placed in	1170
the custody of the treasurer of state, who is hereby designated as	1171
custodian, or in the custody of the treasurer of state's	1172
authorized agent. Evidences of title of the investments so	1173
purchased may be deposited by the treasurer of state for	1174
safekeeping with an authorized agent selected by the treasurer of	1175
state who is a qualified trustee under section 135.18 of the	1176
Revised Code. The treasurer of state or the agent shall collect	1177
the principal, dividends, distributions, and interest as they	1178
become due and payable and place them when collected into the	1179
state insuranceappropriate bureau of workers' compensation	1180
custodial fund.	1181

The treasurer of state shall pay for investments purchased by	1182
the administrator on receipt of written or electronic instructions	1183
from the administrator or the administrator's designated agent	1184
authorizing the purchase, and pending receipt of the evidence of	1185
title of the investment by the treasurer of state or the treasurer	1186
of state's authorized agent. The administrator may sell	1187
investments held by the administrator, and the treasurer of state	1188
or the treasurer of state's authorized agent shall accept payment	1189
from the purchaser and deliver evidence of title of the investment	1190
to the purchaser, on receipt of written or electronic instructions	1191
from the administrator or the administrator's designated agent	1192
authorizing the sale, and pending receipt of the moneys for the	1193
investments. The amount received shall be placed in the state	1194
insuranceappropriate bureau of workers' compensation custodial	1195
fund. The administrator and the treasurer of state may enter into	1196
agreements to establish procedures for the purchase and sale of	1197
investments under this division and the custody of the	1198
investments.	1199

No purchase or sale of any investment shall be made under	1200
this section, except as authorized by the administrator.	1201

Any statement of financial position distributed by the	1202
administrator shall include the fair value, as of the statement	1203
date, of all investments held by the administrator under this	1204
section.	1205

When in the judgment of the administrator it is necessary to	1206
provide available funds for the payment of compensation or	1207
benefits under this chapter, the administrator may borrow money	1208
from any available source and pledge as security a sufficient	1209
amount of bonds or other securities in which the state insurance	1210
fund is invested. The aggregate unpaid amount of loans existing at	1211
any one time for money so borrowed shall not exceed ten million	1212
dollars. The bonds or other securities so pledged as security for	1213
such loans to the administrator shall be the sole security for the	1214
payment of the principal and interest of any such loan. The	1215
administrator shall not be personally liable for the payment of	1216
the principal or the interest of any such loan. No such loan shall	1217
be made for a longer period of time than one year. Such loans may	1218
be renewed but no one renewal shall be for a period in excess of	1219
one year. Such loans shall bear such rate of interest as the	1220
administrator determines and in negotiating the loans, the	1221
administrator shall endeavor to secure as favorable interest rates	1222
and terms as circumstances will permit.	1223

The treasurer of state may deliver to the person or	1224
governmental agency making such loan, the bonds or other	1225
securities which are to be pledged by the administrator as	1226
security for such loan, upon receipt by the treasurer of state of	1227
an order of the administrator authorizing such loan. Upon payment	1228
of any such loan by the administrator, the bonds or other	1229
securities pledged as security therefor shall be returned to the	1230
treasurer of state as custodian of such bonds.	1231

The administrator may pledge with the treasurer of state such	1232
amount of bonds or other securities in which the state insurance	1233
fund is invested as is reasonably necessary as security for any	1234
certificates issued, or paid out, by the treasurer of state upon	1235
any warrants drawn by the administrator.	1236

The administrator, subject to the approval of the board, may	1237
secure investment information services, consulting services, and	1238
or other like services to facilitate investment of the surplus	1239
and reserve belonging to each of the state insurance fundbureau	1240
of workers' compensation custodial funds and, subject to the	1241
approval of the board, may enter into a contract with an	1242
investment manager to have that manager invest the assets of those	1243
funds. The administrator shall pay the expense of securing such	1244
services from the state insurance fund.	1245

Sec. 4123.442. When developing the investment policy for the	1246
investment of the assets of the bureau of workers' compensation	1247
custodial funds specified in this chapter and Chapters 4121.,	1248
4127., and 4131. of the Revised Code, the workers' compensation	1249
investment committee shall do all of the following:	1250

(A) Use only the classes of investments specified in section	1251
4123.443 of the Revised Code;	1252

(B) Specify the asset allocation targets and ranges, risk	1253
factors, asset class benchmarks, time horizons, total return	1254
objectives, and performance evaluation guidelines;	1255

(B) Prohibit investing the assets of those funds, directly or	1256
indirectly, in vehicles that target any of the following:	1257

(1) Coins;

1258

(2) Artwork;

1259

(3) Horses;

1260

(4) Jewelry or gems;

1261

(5) Stamps;

1262

(6) Antiques;

1263

(7) Artifacts;

1264

(8) Collectibles;

1265

(9) Memorabilia;

1266

(10) Similar unregulated investments that are not commonly	1267
part of an institutional portfolio, that lack liquidity, and that	1268
lack readily determinable valuation.	1269

(C) Specify that the administrator of workers' compensation	1270
may invest in an investment class only if the bureau of workers'	1271
compensation board of directors, by a majority vote, opens that	1272
class;	1273

(D) Prohibit investing the assets of those funds in any class	1274
of investments the board, by majority vote, closed, or any	1275
specific investment in which the board prohibits the administrator	1276
from investing;	1277

(E)(D) Not specify in the investment policy that the	1278
administrator or employees of the bureau of workers' compensation	1279
are prohibited from conducting business with an investment	1280
management or consulting firm, any investment management or	1281
consulting professional associated with that firm, any third	1282
party solicitor associated with that firm, or any political	1283
action committee controlled by that firm or controlled by an	1284
investment management or consulting professional of that firm	1285
based on criteria that are more restrictive than the restrictions	1286
described in divisions (Y) and (Z) of section 3517.13 of the	1287
Revised Code.	1288

Sec. 4123.443. (A) The administrator of workers'	1289
compensation, in accordance with section 4123.44 of the Revised	1290
Code, may invest the surplus and reserve of each of the bureau of	1291
workers' compensation custodial funds in any of the following	1292
classes of investments:	1293

(1) Bonds and mortgages on unencumbered real estate within	1294
this or any other state worth twenty-five per cent more than the	1295
sum loaned thereon, exclusive of buildings, unless such buildings	1296
are insured by some company authorized to do business in this	1297
state;	1298

(2) Bonds, notes, debentures, and other such obligations	1299
secured by mortgages insured by the federal housing administrator	1300
or the secretary of agriculture of the United States under Title I	1301
of "The Bankhead-Jones Farm Tenant Act" as amended;	1302

(3) Loans to veterans guaranteed in whole or in part by the	1303
United States pursuant to Title III of the "Servicemen's	1304
Readjustment Act of 1944," 58 Stat. 284, 38 U.S.C. 693, as	1305
amended, provided such guaranteed loans are liens upon real	1306
estate;	1307

(4) Legally authorized and executed bonds, notes, warrants,	1308
and securities that are the direct obligation of or are guaranteed	1309
as to both principal and interest by Canada, that are the direct	1310
obligation of or are guaranteed as to both principal and interest	1311
by any province of Canada, that are the direct obligation of or	1312
are guaranteed as to both principal and interest by any municipal	1313
corporation of Canada having a population of one hundred thousand	1314
or more by the latest official census, and that are not in default	1315
as to principal or interest;	1316

(5) Obligations issued, assumed, or guaranteed by the	1317
international finance corporation or by the international bank for	1318
reconstruction and development, the Asian development bank, the	1319
inter-American development bank, the African development bank, or	1320
similar development bank in which the president, as authorized by	1321
congress and on behalf of the United States, has accepted	1322
membership.	1323

(6) Bonds or other evidences of indebtedness, not in default	1324
as to principal or interest, that are valid obligations issued,	1325
assumed, or guaranteed by the United States or for which the faith	1326
of the United States is pledged to provide payment of the interest	1327
and principal, by any state thereof, by the Commonwealth of Puerto	1328
Rico, by any territory or insular possession of the United States,	1329
or by the District of Columbia, or for which the faith of the	1330
state or the District of Columbia is pledged to provide payment of	1331
the interest and principal;	1332

(7) Bonds or other evidences of indebtedness, not in default	1333
as to principal or interest, that are valid obligations issued,	1334
assumed, or guaranteed by any county, municipal corporation,	1335
district, or political subdivision, or by any civil division or	1336
public instrumentality of such governmental units, if by statutory	1337
or other legal requirements such obligations are payable, as to	1338
both principal and interest, from taxes levied upon all taxable	1339
property within the jurisdiction of such governmental unit and if	1340
they are direct obligations of such a governmental unit, that unit	1341
has not defaulted for a period of more than one hundred twenty	1342
days in the payment of interest upon, or for a period of more than	1343
one year in the payment of principal of, any of its bonds, notes,	1344
warrants, securities, or other interest-bearing obligations,	1345
during the ten years immediately preceding the acquisition of such	1346
bonds, notes, warrants, securities, or other interest-bearing	1347
obligations;	1348

(8) Bonds or other obligations issued by or for account of	1349
any governmental unit specified in division (A)(7) of this	1350
section having a population of five thousand or more by the	1351
latest official federal or state census that are payable as to	1352
both principal and interest from revenues or earnings from the	1353
whole or any part of a publicly owned utility, provided that by	1354
statute or other applicable legal requirements, rates from the	1355
service or operation of such utility must be fixed, maintained,	1356
and collected at all times so as to produce sufficient revenues or	1357
earnings to pay both principal and interest of such bonds or	1358
obligations as they become due;	1359

(9) Any bonds or obligations issued or guaranteed by the	1360
United States, any state, the District of Columbia, the	1361
Commonwealth of Puerto Rico, any county, municipal corporation,	1362
district, political subdivision, civil division, commission,	1363
board, authority, agency, or other instrumentality of one or more	1364
of them, if all of the following apply:	1365

(a) There is a specific pledge of revenues, earnings, or	1366
other adequate security;	1367

(b) No prior or parity obligation of the same issuer, payable	1368
from revenues or earnings from the same source, has been in	1369
default as to principal or interest during the five years next	1370
preceding the date of such investment, but such issuer need not	1371
have been in existence for that period, and obligations acquired	1372
under this division may be newly issued;	1373

(c) There is adequate provision for payment of expenses of	1374
operation and maintenance and the principal and interest on all	1375
obligations when due.	1376

(10) Any bonds issued by or for federal land banks and any	1377
debentures issued by or for federal intermediate credit banks	1378
under the act of congress known as the "Federal Farm Loan Act of	1379
1916," 39 Stat. 360, 12 U.S.C.A. 641 and amendment thereto;	1380

(11) Any debentures issued by or for banks for cooperatives	1381
under the act of congress known as the "Farm Credit Act of 1933,"	1382
48 Stat. 257, 12 U.S.C.A. 131 and amendments thereto;	1383

(12) Bonds issued under the "Home Owners' Loan Act of 1933,"	1384
48 Stat. 128, 12 U.S.C.A. 1461;	1385

(13) The stock of a national bank located in this state,	1386
organized under an act of congress entitled "An act to provide a	1387
national currency, secured by the pledge of United States stocks,	1388
and to provide for the circulation and redemption thereof,"	1389
approved February 25, 1863, and acts amendatory thereof and	1390
supplementary thereto;	1391

(14) First mortgage bonds of railroads upon which default in	1392
the payment of the interest coupons has not been made within three	1393
years prior to the purchase thereof by the administrator;	1394

(15) Legally authorized and executed bonds, notes, warrants,	1395
and other interest-bearing securities of any school district,	1396
water district, road district; or any special district of any	1397
state or of the District of Columbia, if both of the following	1398
apply:	1399

(a) Such school district, water district, road district, or	1400
special district has been created by legislative action and is	1401
empowered to levy taxes on all taxable property in such district	1402
for the payment of such bonds, notes, warrants, and other	1403
interest-bearing securities.	1404

(b) Such school district, water district, road district, or	1405
special district has not defaulted for a period of more than one	1406
hundred twenty days in the payment of interest upon, or for a	1407
period of more than one year in the payment of principal of, its	1408
bonds, notes, warrants, and other interest-bearing securities,	1409
during the ten years immediately preceding the acquisition of such	1410
bonds, notes, warrants, and other interest-bearing securities.	1411

(16) Any securities described in section 77r-1 of the	1412
"Secondary Mortgage Market Enhancement Act of 1984," 98 Stat.	1413
1689, 15 U.S.C.A. 77r-1, subject to all of the limitations	1414
prescribed in divisions (B)(6) to (9) of this section for	1415
investments not guaranteed by the full faith and credit of the	1416
United States.	1417

(17) Notwithstanding division (A)(16) of this section, any of	1418
the following securities:	1419

(a) Securities offered and sold pursuant to 15 U.S.C.A.	1420
section 77d(5);	1421

(b) Mortgage related securities described in 15 U.S.C.A.	1422
section 78c(a)(41);	1423

(c) Securities issued or guaranteed by the federal home loan	1424
mortgage corporation or the federal national mortgage association.	1425

(18) Bonds or other evidences of indebtedness, bearing or	1426
accruing interest, issued, assumed, or guaranteed by any solvent	1427
corporation, trust, partnership, or similar business entity	1428
organized and existing under the laws of this or any other state,	1429
or of the United States, the Commonwealth of Puerto Rico, or of	1430
the District of Columbia, or of Canada or any province of Canada,	1431
upon which there is no existing interest or principal default,	1432
provided that the bonds or other evidences of indebtedness are	1433
rated by at least one of the following:	1434

(a) Moody's service;

1435

(b) Standard and Poor's;

1436

(c) Fitch ratings.

1437

(19) Stocks or limited liability company membership interests	1438
of any insurance, financial, investment, or investment management	1439
companies if the investment management companies are registered	1440
with the securities and exchange commission under the "Investment	1441
Company Act of 1940," 54 Stat. 789, 15 U.S.C. 80a-1, as amended;	1442

(20) Other stocks of any solvent corporation organized under	1443
the laws of this or any other state, or of the United States, the	1444
District of Columbia, Canada, or any province of Canada;	1445

(21) Tangible personal property or interests in that property	1446
for the production of income, provided that the amount of assets	1447
of the bureau of workers' compensation custodial fund that is	1448
invested in such property or interests does not exceed two per	1449
cent of the admitted assets of that fund;	1450

(22) In equipment trust obligations or certificates, security	1451
agreements, or other evidences of indebtedness entered into or	1452
guaranteed by any company operating wholly or partly within the	1453
United States or Canada, if that debt obligation is secured by a	1454
first lien on tangible personal property that is purchased or	1455
secured for payment thereof and that debt obligation is repayable	1456
within twenty years from the date of issue in annual, semiannual,	1457
or more frequent installments beginning not later than the first	1458
year after that date;	1459

(23) Government money market funds and money market funds	1460
that have received the highest credit ratings for money market	1461
funds offered by either Standard and Poor's or Moody's service;	1462

(24) Negotiable promissory notes maturing in not more than	1463
six months from the date the note is issued, secured by collateral	1464
security through the transfer of any of the classes of securities	1465
described in this section, with absolute power of sale within	1466
twenty days after default in payment at maturity;	1467

(25) Repurchase agreements with and interest-bearing	1468
obligations of, including savings accounts and time certificates	1469
of deposit of a national bank of the United States, a commonwealth	1470
bank of Puerto Rico, a chartered bank of Canada, or a state bank,	1471
provided such bank is either a member of the federal deposit	1472
insurance corporation created pursuant to the "Banking Act of	1473
1933," as amended, or the Canada deposit insurance corporation	1474
created pursuant to the act of parliament known as the "Canada	1475
Deposit Insurance Corporation Act," as amended;	1476

(26) Certificates of deposit, savings share accounts,	1477
investment share accounts, stock deposits, stock certificates, or	1478
other evidences of indebtedness of a savings and loan association,	1479
provided all such evidences of indebtedness are insured pursuant	1480
to the "Financial Institutions Reform, Recovery, and Enforcement	1481
Act of 1989," 103 Stat. 183, 12 U.S.C.A. 1811, as amended;	1482

(27) Bankers' acceptances and bills of exchange of the kinds	1483
and maturities made eligible by law for rediscount with the	1484
federal reserve banks, provided that the same are accepted by a	1485
bank or trust company incorporated under the laws of the United	1486
States or of this state or any other bank or trust company which	1487
is a member of the federal reserve system;	1488

(28) Except as provided in division (A) of section 4123.444	1489
of the Revised Code, any of the following:	1490

(a) Bonds, notes, debentures, or other evidences of	1491
indebtedness issued, assumed, or guaranteed by a solvent	1492
corporation, trust, or partnership formed or existing under the	1493
laws of a foreign jurisdiction, provided each such foreign	1494
investment is of the same kind and quality as United States	1495
investments authorized under this section;	1496

(b) Common or preferred stock or shares of any solvent	1497
corporation formed or existing under the laws of a foreign	1498
jurisdiction, provided each such foreign investment is of the same	1499
kind and quality as United States investments authorized under	1500
this section;	1501

(c) Bonds or other evidences of indebtedness issued, assumed,	1502
or guaranteed by a foreign jurisdiction.	1503

(29) Except as provided in division (B) of section 4123.444	1504
of the Revised Code, investments denominated in foreign currency	1505
regardless of whether they are foreign investments;	1506

(30) Any securities or other property not otherwise permitted	1507
under this section, provided that the total amount of the assets	1508
of an individual bureau of workers' compensation custodial fund	1509
that is invested in those investments does not exceed, in the	1510
aggregate, six per cent of the total admitted assets of that fund	1511
and provided that those investments are made within the	1512
limitations prescribed in division (C) of section 4123.444 of the	1513
Revised Code;	1514

(31) Within the limitations prescribed in division (C) of	1515
section 4123.444 of the Revised Code, loans or investments in	1516
small businesses having more than half of their assets or	1517
employees in this state and venture capital firms having an	1518
office within this state, provided that, as a condition of the	1519
administrator making an investment in a venture capital firm, the	1520
firm must agree to use its best efforts to make investments, in an	1521
aggregate amount at least equal to the investment to be made by	1522
the administrator in that venture capital firm, in small	1523
businesses having their principal offices within this state and	1524
having either more than one-half of their assets within this state	1525
or more than one-half of their employees employed within this	1526
state, and provided that the amount of assets of a bureau of	1527
workers' compensation custodial fund that is invested in such	1528
investments does not exceed five per cent of the total admitted	1529
assets of that fund.	1530

(B) For purposes of this section and section 4123.444 of the	1531
Revised Code, the admitted assets of an individual bureau of	1532
workers' compensation custodial fund shall be calculated as of	1533
the thirty-first day of December immediately preceding the date	1534
the value of the applicable fund is determined.	1535

(C) As used in this section and section 4123.444 of the	1536
Revised Code:	1537

(1) "Foreign currency" means a currency other than that of	1538
the United States.	1539

(2) "Foreign jurisdiction" means a jurisdiction outside the	1540
United States, Puerto Rico, or Canada whose bonds are rated 1 by	1541
the securities valuation office of the national association of	1542
insurance commissioners.	1543

(3) "Government money market fund" means a fund that at all	1544
times invests in obligations issued, guaranteed, or insured by the	1545
federal government of the United States or collateralized	1546
repurchase agreements comprised of such obligations, and that	1547
qualifies for investment without a reserve pursuant to the	1548
purposes and procedures of the securities valuation office of the	1549
national association of insurance commissioners.	1550

(4) "Small businesses" means any corporation, partnership,	1551
proprietorship, or other entity that either does not have more	1552
than four hundred employees, or would qualify as a small business	1553
for the purpose of receiving financial assistance from small	1554
business investment companies licensed under the "Small Business	1555
Investment Act of 1958," 72 Stat. 689, 15 U.S.C.A. 661, as	1556
amended, and rules of the small business administration.	1557

(5) "Venture capital firm" means any corporation,	1558
partnership, proprietorship, or other entity, the principal	1559
business of which is or will be the making of investments in small	1560
businesses.	1561

(D) As used in division (A)(31) of this section,	1562
"investments" means any equity investment, including limited	1563
partnership interests and other equity interests in which	1564
liability is limited to the amount of the investment, but does not	1565
include general partnership interests or other interests involving	1566
general liability.	1567

Sec. 4123.444. (A) The administrator shall not invest the	1568
assets of an individual bureau of workers' compensation custodial	1569
fund in foreign investments under division (A)(28) of section	1570
4123.443 of the Revised Code, including investments denominated	1571
in foreign currency, in a sum exceeding in the aggregate fifteen	1572
per cent of the admitted assets of that fund. The aggregate	1573
amount of the assets of a bureau of workers' compensation	1574
custodial fund that is invested in a single foreign jurisdiction	1575
shall not exceed three per cent of the admitted assets of the	1576
surplus and reserve of that fund.	1577

(B) The administrator shall not invest the assets of an	1578
individual bureau of workers' compensation custodial fund in	1579
investments denominated in foreign currency in a sum exceeding in	1580
the aggregate ten per cent of the admitted assets of that fund.	1581
The aggregate amount of the assets of a bureau of workers'	1582
compensation custodial fund that is invested in investments	1583
denominated in a single foreign currency shall not exceed three	1584
per cent of the admitted assets of that fund.	1585

(C) The administrator shall not, at any time, invest the	1586
assets of an individual bureau of workers' compensation custodial	1587
fund in a sum exceeding five per cent of the admitted assets of	1588
that fund in the bonds, notes, debentures, other evidences of	1589
indebtedness, and stocks of a particular corporation, trust,	1590
partnership, or similar business entity and shall not, at any	1591
time, own directly or indirectly more than twenty-five per cent of	1592
the outstanding bonds, notes, debentures, other evidences of	1593
indebtedness, and stocks of any corporation.	1594

(D) In the event that, subsequent to being made under	1595
division (A)(31) of section 4123.443 of the Revised Code, a loan	1596
or investment is determined to have become qualified as a loan or	1597
investment under any of the divisions (A)(1) to (A)(25) of that	1598
section, the administrator may consider such loan or investment as	1599
held under those divisions and such loan or investment shall no	1600
longer be considered as having been made under division (A)(31) of	1601
that section.	1602

(E) The administrator shall not own more than one-fourth of	1603
the capital stock of a national bank, shall not invest the assets	1604
of an individual bureau of workers' compensation custodial fund in	1605
the stocks and bonds of any railroad company or loan on any such	1606
stocks and bonds held in that fund in an amount that exceeds	1607
one-fifth of the surplus and reserve of that fund, and shall not	1608
invest the assets of an individual bureau of workers'	1609
compensation custodial fund in railroad property or loan on such	1610
property held in that fund in an amount that exceeds, in the	1611
aggregate, one-fourth of the surplus and reserve of that fund.	1612

The amount of assets of a bureau of workers' compensation	1613
custodial fund invested in real estate in accordance with section	1614
4123.443 of the Revised Code shall not exceed at any one time,	1615
ten per cent of the assets of the surplus and reserve of that	1616
fund. The amount of assets of a bureau of workers' compensation	1617
custodial fund invested in any one real estate investment shall	1618
not exceed at any one time, two per cent of the assets of the	1619
surplus and reserve of that fund. Nothing in this division	1620
authorizes the administrator to use an investment in real estate	1621
primarily for recreational, agricultural, or mining purposes.	1622

Sec. 4123.444.        Sec. 4123.445.  (A) As used in this section and	1623
section 4123.4454123.446 of the Revised Code:	1624

(1) "Bureau of workers' compensation funds" means any fund	1625
specified in Chapter 4121., 4123., 4127., or 4131. of the Revised	1626
Code that the administrator of workers' compensation has the	1627
authority to invest, in accordance with the administrator's	1628
investment authority under section 4123.44 of the Revised Code.	1629

(2) "Investment manager" means any person with whom the	1630
administrator of workers' compensation contracts pursuant to	1631
section 4123.44 of the Revised Code to facilitate the investment	1632
of assets of bureau of workers' compensation custodial funds.	1633

(3)(2) "Business entity" means any person with whom an	1634
investment manager contracts for the investment of assets of	1635
bureau of workers' compensation custodial funds.	1636

(4)(3) "Financial or investment crime" means any criminal	1637
offense involving theft, receiving stolen property, embezzlement,	1638
forgery, fraud, passing bad checks, money laundering, drug	1639
trafficking, or any criminal offense involving money or	1640
securities, as set forth in Chapters 2909., 2911., 2913., 2915.,	1641
2921., 2923., and 2925. of the Revised Code or other law of this	1642
state, or the laws of any other state or the United States that	1643
are substantially equivalent to those offenses.	1644

(4) "Investment consultant" means any person with whom the	1645
administrator contracts pursuant to section 4123.44 of the Revised	1646
Code to obtain the person's advice and opinions in order to	1647
facilitate the investment of assets of bureau of workers'	1648
compensation custodial funds.	1649

(B)(1) Before entering into a contract with an investment	1650
manager to invest bureau of workers' compensation custodial	1651
funds, the administrator shall do both of the following:	1652

(a) Request from any investment manager with whom the	1653
administrator wishes to contract for those investments a list of	1654
all employees who will be investing assets of bureau of workers'	1655
compensation custodial funds. The list shall specify each	1656
employee's state of residence for the five years prior to the	1657
date of the administrator's request.	1658

(b) Request that the superintendent of the bureau of criminal	1659
investigation and identification conduct a criminal records check	1660
in accordance with this section and section 109.579 of the Revised	1661
Code with respect to every employee the investment manager names	1662
in that list.	1663

(2) After an investment manager enters into a contract with	1664
the administrator to invest bureau of workers' compensation	1665
custodial funds and before an investment manager enters into a	1666
contract with a business entity to facilitate those investments,	1667
the investment manager shall request from any business entity	1668
with whom the investment manager wishes to contract to make those	1669
investments a list of all employees who will be investing assets	1670
of the bureau of workers' compensation custodial funds. The list	1671
shall specify each employee's state of residence for the five	1672
years prior to the investment manager's request. The investment	1673
manager shall forward to the administrator the list received from	1674
the business entity. The administrator shall request the	1675
superintendent to conduct a criminal records check in accordance	1676
with this section and section 109.579 of the Revised Code with	1677
respect to every employee the business entity names in that list.	1678
Upon receipt of the results of the criminal records check, the	1679
administrator shall advise the investment manager whether the	1680
results were favorable or unfavorable.	1681

(3) If, after a contract has been entered into between the	1682
administrator and an investment manager or between an investment	1683
manager and a business entity for the investment of assets of	1684
bureau of workers' compensation custodial funds, the investment	1685
manager or business entity wishes to have an employee who was	1686
not the subject of a criminal records check under division	1687
(B)(1) or (B)(2) of this section invest assets of the bureau of	1688
workers' compensation custodial funds, that employee shall be the	1689
subject of a criminal records check pursuant to this section and	1690
section 109.579 of the Revised Code prior to handling the	1691
investment of assets of those funds. The investment manager	1692
shall submit to the administrator the name of that employee	1693
along with the employee's state of residence for the five years	1694
prior to the date in which the administrator requests the	1695
criminal records check. The administrator shall request that the	1696
superintendent conduct a criminal records check on that employee	1697
pursuant to this section and section 109.579 of the Revised Code.	1698

(4) Before entering into a contract with an investment	1699
consultant regarding the investment of bureau of workers'	1700
compensation custodial funds, the administrator shall do both of	1701
the following:	1702

(a) Request from any investment consultant with whom the	1703
administrator wishes to contract a list of all employees who will	1704
be providing advice and opinions regarding the investment of the	1705
assets of bureau of workers' compensation custodial funds. The	1706
list shall specify each employee's state of residence for the	1707
five years prior to the date of the administrator's request.	1708

(b) Request that the superintendent of the bureau of criminal	1709
investigation and identification conduct a criminal records check	1710
in accordance with this section and section 109.579 of the Revised	1711
Code with respect to every employee the investment consultant	1712
names in that list.	1713

(5) If, after a contract has been entered into between the	1714
administrator and an investment consultant, the investment	1715
consultant wishes to have an employee who was not the subject of	1716
a criminal records check under division (B)(4) of this section	1717
provide advice and opinions regarding the investment of the	1718
assets of the bureau of workers' compensation custodial funds,	1719
that employee shall be the subject of a criminal records check	1720
pursuant to this section and section 109.579 of the Revised Code	1721
prior to providing advice and opinions regarding the investment of	1722
assets of those funds. The investment consultant shall submit to	1723
the administrator the name of that employee along with the	1724
employee's state of residence for the five years prior to the	1725
date in which the administrator requests the criminal records	1726
check. The administrator shall request that the superintendent	1727
conduct a criminal records check on that employee pursuant to	1728
this section and section 109.579 of the Revised Code.	1729

(C)(1) If an employee who is the subject of a criminal	1730
records check pursuant to division (B) of this section has not	1731
been a resident of this state for the five-year period immediately	1732
prior to the time the criminal records check is requested or does	1733
not provide evidence that within that five-year period the	1734
superintendent has requested information about the employee from	1735
the federal bureau of investigation in a criminal records check,	1736
the administrator shall request that the superintendent obtain	1737
information from the federal bureau of investigation as a part of	1738
the criminal records check for the employee. If the employee has	1739
been a resident of this state for at least that five-year period,	1740
the administrator may, but is not required to, request that the	1741
superintendent request and include in the criminal records check	1742
information about that employee from the federal bureau of	1743
investigation.	1744

(2) The administrator shall provide to an investment manager	1745
or consultant a copy of the form prescribed pursuant to division	1746
(C)(1) of section 109.579 of the Revised Code and a standard	1747
impression sheet for each employee for whom a criminal records	1748
check must be performed, to obtain fingerprint impressions as	1749
prescribed pursuant to division (C)(2) of section 109.579 of the	1750
Revised Code. TheAn investment manager shall obtain the	1751
completed form and impression sheet either directly from each	1752
employee or from a business entity and shall forward the completed	1753
form and sheet to the administrator, who shall forward these forms	1754
and sheets to the superintendent. An investment consultant shall	1755
obtain the completed form and impression sheet directly from each	1756
employee and shall forward the completed form and sheet to the	1757
administrator, who shall forward these forms and sheets to the	1758
superintendent.	1759

(3) Any employee who receives a copy of the form and the	1760
impression sheet pursuant to division (C)(2) of this section and	1761
who is requested to complete the form and provide a set of	1762
fingerprint impressions shall complete the form or provide all the	1763
information necessary to complete the form and shall complete the	1764
impression sheets in the manner prescribed in division (C)(2) of	1765
section 109.579 of the Revised Code.	1766

(D) For each criminal records check the administrator	1767
requests under this section, at the time the administrator makes a	1768
request the administrator shall pay to the superintendent the fee	1769
the superintendent prescribes pursuant to division (E) of section	1770
109.579 of the Revised Code.	1771

Sec. 4123.445.        Sec. 4123.446.  (A) The administrator of workers'	1772
compensation shall not enter into a contract with an investment	1773
manager for the investment of assets of the bureau of workers'	1774
compensation custodial funds if any employee of that investment	1775
manager who will be investing assets of bureau of workers'	1776
compensation custodial funds has been convicted of or pleaded	1777
guilty to a financial or investment crime.	1778

(B) An investment manager who has entered into a contract	1779
with the bureau of workers' compensation for the investment of	1780
assets of bureau of workers' compensation custodial funds shall	1781
not contract with a business entity for the investment of those	1782
assets if any employee of that business manager who will be	1783
investing assets of bureau of workers' compensation custodial	1784
funds has been convicted of or pleaded guilty to a financial or	1785
investment crime.	1786

(C) The administrator shall not enter into a contract with an	1787
investment consultant if any employee of that investment	1788
consultant who will be providing advice and opinions regarding the	1789
investment of the assets of bureau of workers' compensation	1790
custodial funds has been convicted of or pleaded guilty to a	1791
financial or investment crime.	1792

(D) The administrator shall not enter into a contract with an	1793
investment manager or consultant who refuses to submit the list of	1794
the investment manager's or consultant's employees required under	1795
division (B) of section 4123.4444123.445 of the Revised Code. An	1796
investment manager shall not enter into a contract with a business	1797
entity who refuses to submit the list of the business entity's	1798
employees required under division (B) of section 4123.4444123.445	1799
of the Revised Code.	1800

(D)(E) If, after a contract has been awarded to an investment	1801
manager or, business entity for the investment of assets of bureau	1802
of workers' compensation funds, or an investment consultant, the	1803
investment manager or, business entity, or investment consultant	1804
discovers that an employee who is handling the investment of	1805
those assets, or an employee who is providing advice and opinions	1806
regarding the investment of those assets, as applicable, has been	1807
convicted of or pleaded guilty to a financial or investment crime,	1808
the investment manager or, business entity, or investment	1809
consultant immediately shall notify the administrator.	1810

Sec. 4123.447.  When in the judgment of the administrator of	1811
workers' compensation it is necessary to provide available funds	1812
for the payment of compensation or benefits under this chapter or	1813
Chapter 4121., 4127., or 4131. of the Revised Code, the	1814
administrator may borrow money from any available source, deposit	1815
the money received in the bureau of workers' compensation	1816
custodial fund from which such compensation and benefits are	1817
paid, and pledge as security a sufficient amount of bonds or	1818
other securities in which the assets of that fund are invested.	1819
The aggregate unpaid amount of loans existing at any one time for	1820
money so borrowed shall not exceed ten million dollars. The bonds	1821
or other securities so pledged as security for such loans to the	1822
administrator shall be the sole security for the payment of the	1823
principal and interest of any such loan. The administrator shall	1824
not be personally liable for the payment of the principal or the	1825
interest of any such loan. No such loan shall be made for a longer	1826
period of time than one year. Such loans may be renewed but no one	1827
renewal shall be for a period in excess of one year. Such loans	1828
shall bear such rate of interest as the administrator determines	1829
and in negotiating the loans, the administrator shall endeavor to	1830
secure as favorable interest rates and terms as circumstances will	1831
permit.	1832

The treasurer of state may deliver to the person or	1833
governmental agency making such loan, the bonds or other	1834
securities which are to be pledged by the administrator as	1835
security for such loan, upon receipt by the treasurer of state of	1836
an order of the administrator authorizing such loan. Upon payment	1837
of any such loan by the administrator, the bonds or other	1838
securities pledged as security therefor shall be returned to the	1839
treasurer of state as custodian of such bonds.	1840

The administrator may pledge with the treasurer of state such	1841
amount of bonds or other securities in which the assets of the	1842
particular bureau of workers' compensation custodial fund are	1843
invested as is reasonably necessary as security for any	1844
certificates issued, or paid out, by the treasurer of state upon	1845
any warrants drawn by the administrator.	1846

Sec. 4123.443.        Sec. 4123.448.  Rental payments by the bureau of	1847
workers' compensation or the industrial commission to or for the	1848
benefit of the state insurance fund for each building owned by the	1849
bureau that was constructed or acquired as an investment in	1850
productive real estate, shall be made pursuant to a lease	1851
agreement for a term that shall not exceed two years. Beginning	1852
July 1, 1991, the rental payments to be made under each such lease	1853
agreement shall include the amount needed to amortize the	1854
construction or acquisition costs for the building over a period	1855
not to exceed twenty-five years, and, until such costs are	1856
amortized, an amount representing return on investment to the	1857
state insurance fund determined by multiplying the unamortized	1858
acquisition or construction costs of the building by a rate that	1859
is not more than three per cent below the rate determined by the	1860
tax commissioner under division (B) of section 5703.47 of the	1861
Revised Code.	1862

Sec. 4127.05.  The premiums, collected under this chapter	1863
shall be paid into a separate fund to be known as the "public	1864
work-relief employees' compensation fund," and all compensation,	1865
death benefits, and expenses for medical, nurse, and hospital	1866
services, medicine, and funerals, shall be paid out of the fund.	1867

Such premiums shall be collected, the moneys of the fund	1868
disbursed and the fund maintained, without regard to or reliance	1869
upon any other fund mentioned in Chapter 4123. of the Revised	1870
Code.	1871

This section shall not prevent the deposit or investment of	1872
the moneys of the public work-relief employees' compensation fund	1873
with the moneys of the state insurance fund provided for in	1874
Chapter 4123. of the Revised Code, but such funds shall be	1875
separate for all other purposes.	1876

The administrator of workers' compensation may invest the	1877
surplus and reserve belonging to the fund in accordance with	1878
section 4123.44 of the Revised Code.	1879

Sec. 4131.03.  (A) For the relief of persons who are entitled	1880
to receive benefits by virtue of the federal act, there is hereby	1881
established a coal-workers pneumoconiosis fund, which shall be	1882
separate from the funds established and administered pursuant to	1883
Chapter 4123. of the Revised Code. The fund shall consist of	1884
premiums and other payments thereto by subscribers who elect to	1885
subscribe to the fund to insure the payment of benefits required	1886
by the federal act.	1887

(B) The coal-workers pneumoconiosis fund shall be in the	1888
custody of the treasurer of state. The bureau of workers'	1889
compensation shall make disbursements from the fund to those	1890
persons entitled to payment therefrom and in the amounts required	1891
pursuant to sections 4131.01 to 4131.06 of the Revised Code. All	1892
investment earnings of the fund shall be credited to the fund.	1893

(C) The administrator of workers' compensation shall have the	1894
same powers tomay invest any of the surplus orand reserve	1895
belonging to the coal-workers pneumoconiosis fund as are	1896
delegated to him underin accordance with section 4123.44 of the	1897
Revised Code with respect to the state insurance fund.	1898

(D) If the administrator determines that reinsurance of the	1899
risks of the coal-workers pneumoconiosis fund is necessary to	1900
assure solvency of the fund, hethe administrator may:	1901

(1) Enter into contracts for the purchase of reinsurance	1902
coverage of the risks of the fund with any company or agency	1903
authorized by law to issue contracts of reinsurance;	1904

(2) Pay the cost of reinsurance from the fund;

1905

(3) Include the costs of reinsurance as a liability and	1906
estimated liability of the fund.	1907

Sec. 4131.13.  (A) For the relief of persons who are entitled	1908
to receive benefits by virtue of the federal act, there is hereby	1909
established a marine industry fund, which shall be separate from	1910
the funds established and administered pursuant to Chapter 4123.	1911
of the Revised Code. The marine industry fund shall consist of	1912
premiums and other payments thereto by marine industry employers	1913
who apply to the bureau of workers' compensation for permission to	1914
subscribe to the fund to insure the payment of benefits required	1915
by the federal act.	1916

By rule, the administrator of workers' compensation shall	1917
establish criteria for the acceptance or rejection of applications	1918
by marine industry employers who apply to subscribe to the fund.	1919

(B) The marine industry fund shall be in the custody of the	1920
treasurer of state. The bureau shall make disbursements from the	1921
fund to those persons entitled to payment therefrom and in the	1922
amounts required pursuant to the federal act. The auditor of state	1923
annually shall complete a fiscal audit of the fund. All investment	1924
earnings of the fund shall be credited to the fund.	1925

(C) The administrator shall have the same powers tomay	1926
invest any of the surplus orand reserve belonging to the marine	1927
industry fund as are delegated to him underin accordance with	1928
section 4123.44 of the Revised Code with respect to the state	1929
insurance fund.	1930

(D) If the bureau of workers' compensation board of directors	1931
determines that reinsurance of the risks of the marine industry	1932
fund is necessary to assure solvency of the fund, the board may:	1933

(1) Enter into contracts for the purchase of reinsurance	1934
coverage of the risks of the fund with any company or agency	1935
authorized by law to issue contracts of reinsurance;	1936

(2) Require the administrator to pay the cost of reinsurance	1937
from the fund;	1938

(3) Include the costs of reinsurance as a liability and	1939
estimated liability of the fund.	1940

(E) For the purpose of maintaining the solvency of the marine	1941
industry fund, the administrator may borrow money from the state	1942
insurance fund as is necessary. Money borrowed from the state	1943
insurance fund shall be repaid from the marine industry fund	1944
together with an appropriate interest rate not to exceed the	1945
average yield of fixed income investments of the state insurance	1946
fund for the six-month period ended on the last day of the month	1947
preceding the month in which the money is borrowed. Loans made	1948
pursuant to this division are a proper investment of the surplus	1949
or reserve of the state insurance fund.	1950

(F) In no event shall any of the assets of any of the funds	1951
created and administered pursuant to Chapter 4123. of the Revised	1952
Code be disbursed in payment of any cost or obligation of or	1953
insured by the marine industry fund. This division shall not be	1954
construed to prohibit as a proper investment loans made from the	1955
state insurance fund to the marine industry fund pursuant to	1956
division (E) of this section.	1957

Section 2. That existing sections 109.579, 4121.12, 4121.121,	1958
4123.01, 4123.34, 4123.351, 4123.412, 4123.44, 4123.442, 4123.443,	1959
4123.444, 4123.445, 4127.05, 4131.03, and 4131.13 of the Revised	1960
Code are hereby repealed.	1961

Section 3. The Bureau of Workers' Compensation Board of	1962
Directors shall approve an investment policy that meets the	1963
requirements of sections 4121.12 and 4123.442 of the Revised	1964
Code, as amended by this act, no later than ninety days after the	1965
effective date of this act. The investment policy in existence on	1966
the effective date of this act shall remain in effect until the	1967
Board approves the new investment policy.	1968

Section 4. This act applies to investments made on or after	1969
the effective date of the investment policy approved by the Bureau	1970
of Workers' Compensation Board of Directors pursuant to Section 3	1971
of this act.	1972