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(123rd General Assembly)(Amended Substitute Senate Bill Number 161)
AN ACT
To amend sections 3334.01, 3334.02, 3334.08, 3334.10, 3334.11, 3334.12,
3334.15, 3366.01, 3366.03, 3366.04, and 5747.01 and to enact sections 3333.37,
3333.371, 3333.372, 3333.373, 3333.374, 3333.375, 3334.18, 3334.19,
3334.20, 3334.21, and 5747.70 of the Revised Code to require the
Ohio tuition trust authority to establish a variable college
savings program, to make other changes in the Ohio College Savings Program, to
expand the scope of education loans eligible to be financed by
obligations issued by the Treasurer of State, to authorize the "Ohio
Outstanding Scholarship" and "Ohio Priority Needs Fellowship" Programs to be
administered by the Ohio Board of Regents, and to maintain the
provisions of this act on and after July 1, 2000, by amending the
version of section 5747.01 of the Revised Code that takes effect
on that date.
Be it enacted by the General Assembly of the State of Ohio:
SECTION 1 . That sections 3334.01, 3334.02, 3334.08, 3334.10, 3334.11,
3334.12, 3334.15, 3366.01, 3366.03, 3366.04, and 5747.01 be amended and
sections 3333.37, 3333.371, 3333.372, 3333.373, 3333.374, 3333.375, 3334.18,
3334.19,
3334.20, 3334.21, and 5747.70 of the Revised Code be enacted to read
as follows:
Sec. 3333.37. As used in sections 3333.37 to 3333.375 of the
Revised Code, the following words and terms have the
following meanings unless the context indicates a different meaning or intent: (A) "Cost of attendance" means all costs of a student incurred in
connection with a program of study at an eligible institution, as determined
by the institution, including tuition; instructional fees; room and board;
books, computers, and supplies; and other related fees, charges, and expenses. (B) "Eligible institution" means either of the following: (1) A state-assisted post-secondary educational institution within the
state; (2) A nonprofit institution of higher education within the state that
holds a certificate of authorization from the Ohio board of regents
pursuant to Chapter 1713. of the Revised Code, that
is accredited by the appropriate regional and, when appropriate, professional
accrediting associations within whose jursidiction it falls, is authorized to
grant a bachelor's degree or higher, and satisfies other conditions as set
forth in the policy guidelines. (C) "Eligible student" means either of the following: (1) An undergraduate student who meets all of the following: (a) Is a resident of this state; (b) Has graduated from any Ohio secondary school for
which the state board of education prescribes minimum standards in accordance
with section 3301.07 of the Revised Code; (c) Is attending and in good standing, or has been accepted for
attendance, at any eligible institution as a full-time student to pursue a
bachelor's degree. (2) A graduate student who
is a resident of this state, and is attending and in good
standing, or has been accepted for attendance, at any eligible institution. (D) "Fellowship" or "fellowship program" means the Ohio
priority needs fellowship created by sections 3333.37 to 3333.375 of the
Revised Code. (E) "Full-time student" has the meaning as defined by rule of the
Ohio board of regents. (F) "Ohio outstanding scholar" means a student who is the
recipient of a scholarship under sections 3333.37 to 3333.375 of the
Revised Code. (G) "Policy guidelines" means the rules adopted by the
Ohio board of regents pursuant to section 3333.374 of the
Revised Code. (H) "Priority needs fellow" means a student who is the recipient
of a fellowship under sections 3333.37 to 3333.375 of the Revised
Code. (I) "Priority needs field of study" means those academic majors
and disciplines as determined by the Ohio board of regents that
support the purposes and intent of sections 3333.37 to 3333.375 of the
Revised Code as described in section 3333.371 of the
Revised Code. (J) "Scholarship" or "scholarship program" means the
Ohio outstanding scholarship created by sections 3333.37 to 3333.375
of the Revised Code. Sec. 3333.371. The purposes of sections 3333.37 to 3333.375 of the
Revised Code are to create both of the following: (A) A scholarship program for undergraduate students who are
residents of this state and are pursuing a
baccalaureate degree in any field of study to encourage the retention of
Ohio outstanding students; (B) A fellowship program for graduate students who are residents
of this state for attendance at Ohio
institutions of higher education to encourage such students to pursue
fields of study that are determined to be a priority for the state in
advancing its economic, technological, and academic interests. Sec. 3333.372. (A) There is hereby authorized the "Ohio
outstanding scholarship" and the "Ohio priority needs fellowship"
programs, which shall be established and administered by the Ohio
board of regents for eligible students. The programs shall provide
scholarships to eligible
undergraduate students and fellowships to eligible graduate students, equal to
the annual cost of attendance at eligible institutions, to pursue
baccalaureate
degrees and post-baccalaureate degrees in priority needs field of study
consistent with section 3333.371 of the Revised Code. (B) The scholarship and fellowship programs created under
sections 3333.37 to 3333.375 of the Revised Code and any
necessary administrative expenses shall be funded solely from the
Ohio outstanding scholarship and the Ohio priority needs
fellowship programs payment funds established pursuant to section 3333.375 of
the Revised Code. (C) The scholarships shall be renewable for each of three
additional
years for undergraduate study, and the fellowships shall be renewable for each
of two additional years for graduate study, provided the Ohio
outstanding scholar or priority needs fellow remains an eligible student at an
eligible institution. Sec. 3333.373. (A) The board of regents shall establish the
rules advisory committee, which shall consist of the chancellor of the
Ohio board of regents or the chancellor's designee, the treasurer of
state or the treasurer of state's designee, the director of development or the
director's designee, one state senator appointed by the president of the
senate, one state representative appointed by the speaker of the house of
representatives, and two public members appointed by the chancellor
representing the interests of the state-assisted eligible institutions and
private nonprofit eligible institutions, respectively. (B) The committee, within one hundred twenty days after the
effective date of this section, shall provide recommendations to the
Ohio board of regents as to such rules, criteria, and guidelines as
are necessary and appropriate to implement the scholarship and fellowship
programs created by sections 3333.37 to 3333.375 of the Revised
Code. (C) The committee shall meet at least annually to review the
scholarship and fellowship programs guidelines; make recommendations to amend,
rescind, or modify the policy guidelines; and approve scholarship and
fellowship awards to eligible students. (D) Section 101.84 of the Revised Code does not
apply to this section. Sec. 3333.374. (A) After receipt of recommendations from the
rules advisory committee or if no recommendations are received, the
Ohio board of regents, not later than one hundred eighty days after
the effective date of this section and with the approval of the treasurer of
state, shall adopt rules, in accordance with Chapter 119. of the
Revised Code, establishing such policy guidelines as the
board considers necessary and appropriate to provide for the implementation of
the scholarship and fellowship programs. (B) Nothing in this section or section 3333.373 of the
Revised Code shall prevent the board, with the approval of
the treasurer of state, from amending or rescinding rules adopted pursuant to
division (A) of this section, or from adopting new rules, in
accordance with Chapter 119. of the Revised Code,
from time to time as are necessary to further the purposes of sections 3333.37
to 3333.375 of the Revised Code. Sec. 3333.375. (A)(1) There is hereby created the Ohio
outstanding scholarship and the Ohio priority needs fellowship
programs payment funds, which shall be in the custody of the treasurer of
state, but shall not be a part of the state treasury. (2) The payment funds shall consist solely of all moneys returned to the
treasurer of state, as issuer of certain tax-exempt student loan revenue
bonds, from all indentures of trust, both presently existing and future,
created as a result of tax-exempt student loan revenue bonds issued under
Chapter 3366. of the Revised Code, and any moneys
earned from allowable investments of the payment funds under division
(B) of this section. (3) The payment funds shall be used solely for scholarship and fellowships
awarded under sections 3333.37 to 3333.375 of the Revised
Code by the Ohio board of regents and for any necessary
administrative expenses incurred by the board in administering the scholarship
and fellowship programs. (B) The treasurer of state may invest any moneys in the payment
funds not currently needed for scholarship and fellowship payments in any kind
of investments in which moneys of the public employees retirement system may
be invested under Chapter 145. of the Revised Code. (C)(1) The instruments of title of all investments shall be
delivered to the treasurer of state or to a qualified trustee designated by
the treasurer of state as provided in section 135.18 of the Revised
Code. (2) The treasurer of state shall collect both principal and investment
earnings on all investments as they become due and pay them into the payment
funds. (3) All deposits to the payment funds shall be made in public depositories
of this state and secured as provided in section 135.18 of the
Revised Code. (D) On or before March 1, 2001, and on or before the
first day of March in each subsequent year, the treasurer of state
shall provide to the chancellor of the Ohio board of regents a
statement indicating the moneys in the Ohio outstanding scholarship
and the Ohio priority needs fellowship programs payment funds that
are available for the upcoming academic year to award scholarships and
fellowships under sections 3333.37 to 3333.375 of the Revised
Code. Sec. 3334.01. As used in this chapter: (A) "Aggregate original principal amount" means the
aggregate of the initial offering prices to the public of college
savings bonds, exclusive of accrued interest, if any. "Aggregate
original principal amount" does not mean the aggregate accreted
amount payable at maturity or redemption of such bonds. (B) "Beneficiary" means an: (1) An individual designated by the purchaser under a
tuition payment contract or through a scholarship program
as the individual on whose behalf tuition credits purchased
under the contract or awarded through the scholarship program will be applied
toward the payment of undergraduate, graduate, or professional tuition;
or (2) An individual designated by the contributor under a variable
college savings program contract as the individual whose tuition and other
higher education expenses will be paid from a variable college savings program
account. (C) "Capital appreciation bond" means a bond for which the following is true: (1) The principal amount is less than the amount payable
at maturity or early redemption; and (2) No interest is payable on a current basis. (D) "Tuition credit" means a credit of the Ohio tuition trust authority
purchased under section 3334.09 of the Revised Code. (E) "College savings bonds" means revenue and other
obligations issued on behalf of the state or any agency or
issuing authority thereof as a zero-coupon or capital
appreciation bond, and designated as college savings bonds as
provided in this chapter. "College savings bond issue" means any
issue of bonds of which any part has been designated as college
savings bonds. (F) "Institution of higher education" means a state
institution of higher education, a private college,
university, or other postsecondary institution located in this state that
possesses a certificate of authorization issued by the Ohio board of regents
pursuant to Chapter 1713. of the Revised Code or a certificate of registration
issued by the state board of proprietary school registration under Chapter
3332. of the Revised Code, or an accredited college,
university, or other postsecondary institution located outside this state that
is accredited by an
accrediting organization or professional association recognized
by the authority. To be considered an institution of higher education, an
institution shall meet the definition of an eligible educational institution
under section 529 of the Internal Revenue Code. (G) "Issuing authority" means any authority, commission,
body, agency, or individual empowered by the Ohio
Constitution or the Revised Code to issue bonds or any other debt obligation
of the state or any agency or department thereof. "Issuer" means
the issuing authority or, if so designated under division (B) of
section 3334.04 of the Revised Code, the treasurer of state. (H) "Tuition" means the charges imposed to attend an
institution of higher education as an undergraduate, graduate, or professional
student and all fees required as a condition of enrollment, as determined by
the Ohio tuition trust authority. "Tuition" does not include fees charged
to out-of-state residents by state institutions of higher
education, laboratory fees, room and board, or other similar fees
and charges. (I) "Weighted average tuition" means the tuition cost resulting from the
following calculation: (1) Add the products of the annual undergraduate tuition
charged to Ohio residents
at each four-year state university multiplied by that
institution's total number of undergraduate fiscal year equated
students; and (2) Divide the gross total of the products from division
(J)(I)(1) of this section by the total number of undergraduate
fiscal year equated students attending four-year state
universities. (J) "Zero-coupon bond" means a bond which has a stated
interest rate of zero per cent and on which no interest is
payable until the maturity or early redemption of the bond, and
is offered at a substantial discount from its original stated
principal amount. (K) "State institution of higher education" includes the
state universities listed in section 3345.011 of the Revised
Code, community colleges created pursuant to Chapter 3354. of the
Revised Code, university branches created pursuant to Chapter
3355. of the Revised Code, technical colleges created pursuant to
Chapter 3357. of the Revised Code, state community colleges
created pursuant to Chapter 3358. of the Revised Code, the medical college of
Ohio at Toledo, and the northeastern Ohio universities college of medicine. (L) "Four-year state university" means those state
universities listed in section 3345.011 of the Revised Code. (M) "Principal amount" refers to the initial offering
price to the public of an obligation, exclusive of the accrued
interest, if any. "Principal amount" does not refer to the
aggregate accreted amount payable at maturity or redemption of an
obligation. (N) "Scholarship program" means a program registered with the Ohio tuition
trust authority pursuant to section 3334.18 3334.17 of the
Revised Code. (O) "Internal Revenue Code" means the
"Internal Revenue Code of 1986," 100 Stat.
2085, 26 U.S.C.A. 1 et seq., as amended. (P) "Other higher education expenses" means
room and board and books, supplies, equipment, and
nontuition-related fees associated with the cost of attendance
of a beneficiary at an institution of higher education, but only
to the extent that such expenses meet the definition of
"qualified higher education expenses" under section 529 of the
Internal Revenue Code. "Other higher education
expenses" does not include tuition as defined in division
(H) of this section. (Q) "Purchaser" means
the person signing the tuition payment contract, who controls
the account and acquires tuition credits for an account under
the terms and conditions of the contract. (R) "Contributor" means a person who signs a variable college
savings program contract with the Ohio tuition trust authority and
contributes to and owns the account created under the contract. Sec. 3334.02. (A) In order to help make higher education
affordable and accessible to all citizens of Ohio, to maintain
state institutions of higher education by helping to provide a
stable financial base to these institutions, to provide the
citizens of Ohio with financing assistance for higher education
and protection against rising tuition costs, to encourage saving
to enhance the ability of citizens of Ohio to obtain financial
access to institutions of higher education, to encourage
elementary and secondary students in this state to achieve
academic excellence, and to promote a well-educated and
financially secure population to the ultimate benefit of all
citizens of the state of Ohio, there is hereby created the Ohio
college savings program. The program shall consist of the
issuance of college savings bonds and the sale of tuition credits
and, if offered, supplemental credits. (B) The provisions of Chapter 1707. of the Revised Code
shall not apply to tuition credits
or any agreement or transaction related thereto. (C) To provide the citizens of Ohio with a choice of
tax-advantaged college savings programs and the opportunity to participate in
more than one type of
college savings program at a time, the Ohio tuition trust
authority shall establish and administer a variable college savings program
as a qualified state tuition program under section 529 of the
Internal Revenue Code. The program shall
allow contributors to make cash contributions to variable college savings
program accounts created for the purpose of paying future tuition and other
higher education expenses and providing variable rates of return
on contributions. (D) A person may participate simultaneously in both the
Ohio college
savings program and the variable college savings program. Sec. 3334.08. (A) In Subject to division (B) of this
section, in addition to any other powers
conferred by this chapter, the Ohio tuition trust authority may
do any of the following: (1) Impose reasonable residency requirements for
beneficiaries of tuition credits; (2) Impose reasonable limits on the number of tuition
credit participants; (3) Impose and collect administrative fees and charges in
connection with any transaction under this chapter; (4) Purchase insurance from insurers licensed to do
business in this state providing for coverage against any loss in
connection with the authority's property, assets, or activities
or to further ensure the value of tuition credits; (5) Indemnify or purchase policies of insurance on behalf
of members, officers, and employees of the authority from
insurers licensed to do business in this state providing for
coverage for any liability incurred in connection with any civil
action, demand, or claim against a director, officer, or employee
by reason of an act or omission by the director, officer, or
employee that was not manifestly outside the scope of the
employment or official duties of the director, officer, or employee or
with malicious purpose, in bad
faith, or in a wanton or reckless manner; (6) Make, execute, and deliver contracts, conveyances, and
other instruments necessary to the exercise and discharge of the
powers and duties of the authority; (7) Promote, advertise, and publicize the Ohio college
savings
program and the variable college savings program; (8) Adopt rules under section 111.15 of the Revised Code
for the implementation of the Ohio college savings program; (9) Contract, for the provision of all or part of the
services necessary for the management and operation of the
Ohio
college savings program and the variable college savings program, with
a bank, trust company, savings and
loan association, insurance company, or licensed dealer in
securities if the bank, company, association, or dealer is
authorized to do business in this state and information about the
contract is filed with the controlling board pursuant to division
(D)(6) of section 127.16 of the Revised Code; (10) Contract for other services, or for goods, needed by
the authority in the conduct of its business, including but not
limited to credit card services; (11) Employ an executive director and other personnel as
necessary to carry out its responsibilities under this chapter,
and fix the compensation of these persons. All employees of the
authority shall be in the unclassified civil service and shall be
eligible for membership in the public employees retirement
system. (12) Contract with financial consultants, actuaries,
auditors, and other consultants as necessary to carry out its
responsibilities under this chapter; (13) Enter into agreements with any agency of the state or
its political subdivisions or with private employers under which
an employee may agree to have a designated amount deducted in
each payroll period from the wages or salary due the employee for
the purpose of purchasing tuition credits pursuant to a tuition
payment contract or making contributions pursuant to a variable college
savings program contract; (14) Enter into an agreement with the treasurer of state
under which the treasurer of state will receive, and credit to
the Ohio tuition trust fund or variable college savings program fund,
from any bank or savings and loan
association authorized to do business in this state, amounts that
a depositor of the bank or association authorizes the bank or
association to withdraw periodically from the depositor's account
for the
purpose of purchasing tuition credits pursuant to a tuition
payment contract or making contributions pursuant to a variable college
savings program contract; (15) Solicit and accept gifts, grants, and loans from any
person or governmental agency and participate in any governmental
program; (16) Impose limits
on the number of credits which may be
purchased on behalf of or assigned or awarded to any beneficiary and on the
total amount of contributions that may be made on behalf of a beneficiary; (17) Impose restrictions on the substitution of another
individual for the original beneficiary under the Ohio college
savings program; (18) Impose a limit on the age of a beneficiary, above
which tuition credits may not be purchased on
behalf of that
beneficiary; (19) Enter into a cooperative agreement with the treasurer
of state to provide for the direct disbursement of payments under
tuition payment or variable college savings program contracts; (20) Determine the other higher education expenses for which
tuition credits or contributions may be used; (21) Terminate any prepaid tuition payment or variable college
savings program contract if no
purchases or contributions are made for a period of three years or more
and there
are fewer than a total of five tuition units or tuition credits or less
than a dollar amount set by rule
on account, provided that notice of a possible termination shall
be provided in advance, explaining any options to prevent
termination, and a reasonable amount of time shall be provided
within which to act to prevent a termination; (22) Maintain a separate account for each tuition payment or variable
college savings program contract; (23) Perform all acts necessary and proper to carry out
the duties and responsibilities of the authority pursuant to this
chapter. (B) The authority shall adopt rules
under section 111.15 of the Revised Code for the
implementation
and administration of the variable college savings program. The rules shall
provide taxpayers with the maximum tax advantages and flexibility consistent
with
section 529 of the Internal Revenue Code and
regulations adopted
thereunder with regard to disposition of contributions and earnings,
designation of beneficiaries, and rollover of account assets to other
programs. (C) Except as otherwise specified in this chapter, the
provisions of Chapters 123., 125., and 4117. of the Revised Code
shall not apply to the authority. The department of
administrative services shall, upon the request of the authority,
act as the authority's agent for the purchase of equipment,
supplies, insurance, or services, or the performance of
administrative services pursuant to Chapter 125. of the Revised
Code. Sec. 3334.10. Divisions (A) and, (B), (C),
and (D) of this section do not apply to
scholarship programs established under section 3334.17 of the Revised Code. (A) Unless otherwise provided for in the
contract, a tuition payment contract may be terminated by the
purchaser under any of
the following circumstances upon the written request of the purchaser
to the authority: (1) Upon the death or permanent disability of the beneficiary; (2) Upon notification to the Ohio tuition trust authority
in writing that the beneficiary is age eighteen or older, has
decided not to attend an institution of higher education, and
requests that the tuition payment contract be terminated; (3) Upon the beneficiary's completion of the degree requirements at
an institution of higher education; (4) Upon the rollover of all
contributions to amounts in a tuition credit
account to the prepaid tuition plan of
an equivalent account in
another state; (5) Upon the occurrence of other circumstances determined
by the authority to be grounds for termination. (B) The authority shall determine the method and schedule
for payment of refunds upon termination of a tuition payment
contract. (1) In cases described by division (A)(2) or (3) of this section, the
amount of the refund shall be equal to ninety-nine
one-hundredths of not less than one per cent of the weighted
average tuition in the
academic year the contract refund is terminated
paid, multiplied by the number of tuition
credits purchased and not used, minus any reasonable charges and fees provided
for by the authority, or such other lesser sum as shall be
determined by the authority but only to the extent that such a
lesser sum is necessary to meet the refund penalty requirements
for qualified state tuition programs under section 529 of the
Internal Revenue Code. (2) In cases described by division (A)(1) of this section,
the amount of the refund shall be equal to the greater of the following: (a) One per cent of the weighted average tuition in the academic year the
contract refund is terminated paid, multiplied by
the number of tuition credits purchased and not
used; (b) The total purchase price of all tuition credits purchased for the
beneficiary and not used. (3) In cases described by division (A)(5) of this section,
the amount of the refund shall be either of the following as
determined by the authority: (a) The refund provided by division (B)(1) of this section; (b) The refund provided by division (B)(2) of this
section, or such other lesser sum as shall be
determined by the authority but only to the extent that such a
lesser sum is necessary to meet the refund penalty requirements
for qualified state tuition programs under section 529 of the
Internal Revenue Code. (C)
Unless otherwise provided for in the contract, a variable college
savings program account may be terminated by the contributor for any
reason upon the written request of the contributor to the
authority. Termination of a variable college savings program
account shall occur no earlier than a maturity period set by the
authority after the first contribution is made to the account. (D) The authority shall determine the method and schedule for
payment of refunds upon termination of a variable savings program
account. (1) The contributor under a variable savings program contract may
receive a refund of the balance in an account, less any administrative
fees, if the account is terminated upon the death or permanent
disability of the beneficiary or, to the extent allowed under rules of the
authority, upon the rollover of all amounts
in a variable college savings program account to an equivalent
account in another state. (2) If a variable college savings program account is terminated
for any reason other than those set forth in division (D)(1) of
this section, the contributor may receive a refund of the balance in the
account, less any administrative fees, and less
any additional amount necessary to meet the minimum refund penalty
requirements for a qualified state tuition program under section
529 of the Internal Revenue Code. (3) Earnings shall be calculated as the total value of the
variable savings program
account less the aggregate contributions, or in such other manner as
prescribed by section 529 of the Internal Revenue
Code. (E) In the case of a scholarship program, a refund of tuition
credits
in the program's account may be made only for just cause with the approval of
the authority. The refund shall be paid to the entity that established
the scholarship program or, with that entity's approval, to the
authority if this is authorized by federal tax
law. The amount of any refund shall be determined by the authority
and shall meet the requirements for refunds made on
account of scholarships under section 529 of the Internal
Revenue Code. (D)(F) If a beneficiary is awarded a scholarship other than
under a scholarship program, a waiver of tuition, or similar subvention that
the
authority
determines cannot be converted into money by the beneficiary, the
authority shall, during each academic term that the beneficiary
furnishes the authority such information about the scholarship,
waiver, or similar subvention as the authority requires, refund
to the person designated in the contract, or, in the case of a beneficiary
under a scholarship program, to the beneficiary an amount equal to the
value that the tuition credits or the amounts in the variable college
savings program account that are not needed on
account of
the scholarship, waiver, or similar subvention would otherwise
have to the beneficiary that term at the institution of higher education
where the beneficiary is enrolled. The authority may, at its sole
option, designate the institution of higher education at which the
beneficiary is enrolled as the agent of the authority for
purposes of refunds pursuant to this division.
(E)(G) If, in any academic term for which tuition credits
or any amounts in a variable college savings program account
have been used to pay all or part of a beneficiary's tuition, the
beneficiary withdraws from the institution of higher education at
which the beneficiary is enrolled prior to the end of the
academic term, a pro rata share of any refund of tuition as a
result of the withdrawal equal to that portion of the tuition
paid with tuition credits or the amounts in a variable college savings
program account shall be made to the authority, unless
the authority designates a different procedure. The authority
shall credit any refund received, less any reasonable charges and
fees provided for by the authority, to the appropriate account established
under division (F)(1) or (2) of section 3334.11
of the Revised Code or division (H) of this section.
(H) The authority shall maintain a separate account for each
variable college savings contract entered into pursuant to division
(A) of section 3334.18 of the Revised Code for
contributions
made on
behalf of a beneficiary, showing the name of the beneficiary
of that contract and the amount of
contributions made pursuant to that contract. upon request of any
beneficiary or contributor, the authority shall provide a
statement indicating, in the case of a beneficiary, the amount of
contributions made pursuant to that contract on behalf of the beneficiary, or,
in the case of a contributor, contributions made, disbursed, or refunded
pursuant to that contract. Sec. 3334.11. (A) The assets of the Ohio tuition trust
authority reserved for payment of the obligations of the
authority pursuant to tuition payment contracts shall be placed
in a fund, which is hereby created and shall be known as the
Ohio
tuition trust fund. The fund shall be in the custody of the
treasurer of state, but shall not be part of the state treasury.
That portion of payments received by the authority or the
treasurer of state from persons purchasing tuition credits under
tuition payment contracts that the authority determines is
actuarially necessary for the payment of obligations of the
authority pursuant to tuition payment contracts, all interest and
investment income earned by the fund, and all other receipts of
the authority from any other source that the authority
determines appropriate, shall be deposited in the fund. No
purchaser or beneficiary of tuition credits shall have any claim
against the funds of any state institution of higher education.
All investment fees and other costs incurred in connection with
the exercise of the investment powers of the authority pursuant
to divisions (D) and (E) of this section shall be paid from the
assets of the fund. (B) Unless otherwise provided by the authority, the assets
of the Ohio tuition trust fund shall be expended in the following
order: (1) To make payments to beneficiaries, or institutions of
higher education on behalf of beneficiaries, under division (B)
of section 3334.09 of the Revised Code; (2) To make refunds as provided in divisions (B), (C)(E), and
(D)(F) of section 3334.10 of the Revised Code; (3) To pay the investment fees and other costs of
administering the fund. (C)(1) Except as may be provided in an agreement under
division (A)(19) of section 3334.08 of the Revised Code,
all disbursements from the Ohio tuition trust fund shall be made by
the treasurer of state on order of a designee of the authority. (2) The treasurer of state shall deposit any portion of
the Ohio tuition trust fund not needed for immediate use in the
same manner as state funds are deposited. (D) The authority is the trustee of the Ohio tuition trust
fund. The authority shall have full power to invest the
assets of the fund and in exercising this power shall be subject to the
limitations and requirements contained in divisions
(K) to (M) of this section and
sections 145.112 and 145.113 of the Revised Code. The
evidences of title of all investments shall be
delivered to the
treasurer of state or to a qualified trustee designated by the
treasurer of state as
provided in section 135.18 of the Revised Code. Assets of the
fund shall be administered by the authority in a manner designed
to be actuarially sound so that the assets of the fund will be
sufficient to satisfy the obligations of the authority pursuant
to tuition payment contracts and defray the reasonable expenses
of administering the fund. (E) The public employees retirement board shall, with the
approval of the authority, exercise the investment powers of the
authority as set forth in division (D) of this section until the
authority determines that assumption and exercise by the
authority of the investment powers is financially and
administratively feasible. The investment powers shall be
exercised by the public employees retirement board in a manner
agreed upon by the authority that maximizes the return on
investment and minimizes the administrative expenses. (F)(1) The authority shall maintain a separate account for
each
tuition payment contract entered into pursuant to division (A) of section
3334.09 of the Revised Code for the purchase of
tuition credits on behalf of a beneficiary or beneficiaries
showing the beneficiary or beneficiaries of that contract and the
number of tuition credits purchased pursuant to that contract.
Upon request of any beneficiary or person who has entered into a
tuition payment contract, the authority shall provide a statement
indicating, in the case of a beneficiary, the number of tuition
credits purchased on behalf of the beneficiary, or in the case of
a person who has entered into a tuition payment contract, the
number of tuition credits purchased, used, or refunded pursuant
to that contract. A beneficiary and person that have entered
into a tuition payment contract each may file only one request
under this division in any year. (2) The authority shall maintain an account for each
scholarship program showing the number of tuition credits that
have been purchased for or donated to the program and the number
of tuition credits that have been used. Upon the request of the
entity that established the scholarship program, the authority shall
provide a statement indicating these numbers. (G) In addition to the Ohio tuition trust fund, there is
hereby established a reserve fund that shall be in the
custody
of the treasurer of state but shall not be part of the state
treasury, and shall be known as the Ohio tuition trust reserve
fund, and an operating fund that shall be part of the
state
treasury, and shall be known as the Ohio tuition trust operating
fund. That portion of payments received by the authority or the
treasurer of state from persons purchasing tuition credits under
tuition payment contracts that the authority determines is
not
actuarially necessary for the payment of obligations of the
authority pursuant to tuition payment contracts, any interest and
investment income earned by the reserve fund, any administrative
charges and fees imposed by the authority on transactions under
this chapter or on purchasers or beneficiaries of tuition
credits, and all other receipts from any other source that
the
authority determines appropriate, shall be deposited in the
reserve fund to pay the operating expenses of the authority and
the costs of administering the program. The assets of the
reserve fund may be invested in the same manner and subject to
the same limitations set forth in divisions (D), (E),
and (K) to (M) of this
section and sections 145.112 and 145.113 of the Revised Code. All investment
fees and
other costs incurred in
connection with the exercise of the investment powers shall
be
paid from the assets of the reserve fund. Except as otherwise
provided for in this chapter, all operating expenses of the
authority and costs of administering the program shall be paid
from the operating fund. The treasurer shall, upon request of
the authority, transfer funds from the reserve fund to the
operating fund as the authority determines appropriate to pay
those current operating expenses of the authority and costs of
administering the program as the authority designates. Any
interest or investment income earned on the assets of the
operating fund shall be deposited in the operating fund. (H) In January of each year the authority shall report to
each person who received any payments or refunds from the
authority during the preceding year information relative to the
value of the payments or refunds to assist in determining
that
person's tax liability. (I) The authority shall report to the tax commissioner
any information, and at the times, as
the tax commissioner
requires to determine any tax liability that a person may have
incurred during the preceding year as a result of having received
any payments or refunds from the authority. (J) All records of the authority indicating the identity
of purchasers and beneficiaries of tuition credits or college
savings bonds, the number of tuition credits purchased, used, or
refunded under a tuition payment contract, and the number of
college savings bonds purchased, held, or redeemed are not public
records within the meaning of section 149.43 of the Revised Code. (K) The authority and other
fiduciaries shall discharge their duties with respect to the
funds with care, skill, prudence,
and diligence under the circumstances then prevailing that a
prudent person acting in a like capacity and familiar with such
matters would use in the conduct of an enterprise of a like
character and with like aims; and by diversifying the investments
of the assets of the funds so as to minimize the risk of large losses,
unless
under the circumstances it is clearly prudent not to do so. To facilitate investment of the funds, the authority may establish a
partnership, trust, limited liability company, corporation, including a
corporation exempt from taxation under the Internal Revenue
Code, 100 Stat. 2085, 26 U.S.C. 1, as amended, or
any other legal entity authorized to transact business in this state. (L) In exercising its fiduciary responsibility with
respect to the investment of the assets of the funds, it shall be the
intent of the authority to give consideration to investments that enhance the
general welfare of the state and its citizens where the
investments offer quality, return, and safety comparable to other
investments currently available to the authority. In fulfilling this
intent, equal consideration shall also be given to investments
otherwise qualifying under this section that involve minority
owned and controlled firms and firms owned and controlled by
women, either alone or in joint venture with other firms. The
authority shall adopt, in regular meeting, policies, objectives, or
criteria for the operation of the investment program
that include asset
allocation targets and ranges, risk factors, asset class benchmarks, time
horizons, total return objectives, and performance evaluation guidelines.
In
adopting policies and criteria for the selection of agents with
whom the authority may contract for the administration of the assets of the
funds, the authority shall give equal consideration to minority owned and
controlled firms, firms owned and controlled by women, and
ventures involving minority owned and controlled firms and firms
owned and controlled by women that otherwise meet the policies and criteria
established by the authority. Amendments and additions to the policies and
criteria shall be adopted in regular meeting. The authority shall publish its
policies, objectives, and criteria under this provision no less often than
annually and
shall make copies available to interested parties. When reporting on the performance of investments, the authority shall
comply
with the performance presentation standards established by the association for
investment management and research. (M) All investments shall be purchased at current market
prices and the evidences of title of the investments shall be
placed in the hands of the treasurer of state, who is hereby
designated as custodian thereof, or in the hands of the
treasurer of state's authorized agent. The treasurer of state or the
agent shall collect the principal, dividends, distributions, and interest
thereon as they become due and payable and place them when so collected into
the custodial funds. The treasurer of state shall pay for investments purchased by the
authority on receipt of written or electronic instructions from the authority
or the authority's designated agent authorizing the purchase and pending
receipt of the
evidence of title of the investment by the treasurer of state or the treasurer
of state's authorized agent. The authority may sell investments held by the
authority, and the treasurer of state or the treasurer of state's authorized
agent shall accept payment from the purchaser
and deliver evidence of title of the investment to the purchaser on receipt of
written or electronic instructions from the authority or the authority's
designated agent authorizing the sale, and pending receipt of the moneys for
the investments. The amount received shall be placed in the custodial funds.
The authority and the treasurer of state may enter into agreements to
establish procedures for the purchase and sale of investments under this
division and the custody of the investments. No purchase or sale of any investment shall be made under this section
except as authorized by the authority. Any statement of financial position distributed by the authority shall
include fair value, as of the statement date, of all investments held by the
authority under this section. Sec. 3334.12. Notwithstanding anything to the contrary in
sections 3334.07 and 3334.09 of the Revised Code: (A) Annually, the Ohio tuition trust authority shall have
the actuarial soundness of the Ohio tuition trust fund evaluated
by a nationally recognized actuary and shall determine whether
additional assets are necessary to defray the obligations of the
authority. If, after the authority sets the price for tuition credits,
circumstances
arise that the executive director determines necessitate an additional
evaluation of the actuarial soundness of the fund, the executive director
shall
have a nationally recognized actuary conduct the necessary
evaluation. If the assets of the fund are insufficient to ensure
the actuarial soundness of the fund, the authority shall adjust
the price of subsequent purchases of tuition credits. (B) Upon termination of the program or liquidation of the
Ohio tuition trust fund, the Ohio tuition trust reserve fund, and
the Ohio tuition trust operating fund, any remaining assets of
the funds after all obligations of the funds have been satisfied
pursuant to division (B) of section 3334.11 of the Revised Code
shall be transferred to the general revenue fund of the state. (C) The authority shall prepare and cause to have audited
an annual financial report on all financial activity of the Ohio
tuition trust authority within ninety days of the end of the
fiscal year. The authority shall transmit a copy of the audited
financial report to the governor, the president of the senate,
the speaker of the house of representatives, and the minority
leaders of the senate and the house of representatives. Copies
of the audited financial report also shall be made available,
upon request, to the persons entering into contracts with the
authority and to prospective purchasers of tuition credits and prospective
contributors to variable college savings program accounts. Sec. 3334.15. (A) The right of a person to a tuition credit or a
payment under
section 3334.09 of the Revised Code pursuant to a tuition credit contract
or, a scholarship program, or a variable
college
savings program account shall not be
subject to execution, garnishment,
attachment, the operation of bankruptcy or the insolvency laws, or other
process of law. (B) The right of a person to a tuition credit or a payment under
section 3334.09 of the Revised Code pursuant to a tuition credit contract, a scholarship
program, or a variable college savings program account shall not be used as
security or collateral for a loan. Sec. 3334.18. (A) A variable college savings program
established by the Ohio tuition trust authority shall include
provisions for a contract to be entered into between a contributor and
the authority that will authorize the contributor to open an account
for a beneficiary and authorize
the contributor to substitute a new beneficiary for one originally
named in the contract, TO THE EXTENT PERMITTED
BY SECTION 529 OF THE INTERNAL REVENUE CODE. (B) The authority shall provide adequate safeguards to prevent
total contributions to a variable college savings program account or purchases
of tuition credits, either separately or combined, that are made on
behalf of a beneficiary from exceeding the amount necessary to provide for the
tuition and other higher
education expenses of the beneficiary, CONSISTENT WITH THE
MAXIMUM CONTRIBUTIONS PERMITTED BY SECTION 529 OF THE INTERNAL
REVENUE CODE. However, in no event shall
contributions or purchases exceed the
allowable limit for a qualified state tuition program under section 529
of the Internal Revenue Code. (C)(1) Participation in the variable college savings program does
not guarantee that contributions and the investment return on contributions,
if any, will be
adequate to cover future tuition and other higher education
expenses or that a beneficiary will be admitted to or permitted to
continue to attend an institution of higher education. (2) Returns on contributors' investments in the variable college
savings program are not guaranteed by the state and the contributors to
the variable college savings program assume all investment risk, including
the potential loss of principal and liability for penalties such
as those levied for noneducational withdrawals. (3) The state
shall have no debt or obligation to any contributor, beneficiary,
or any other person as a result of the establishment of the
program, and the state assumes no risk or liability for funds invested in
the variable college savings program. (4) Informational materials about the variable college savings
program prepared by the authority or its agents and provided to
prospective contributors shall state clearly the information set forth in
division (C) of this section. Sec. 3334.19. (A) The Ohio tuition trust authority
shall adopt an investment
plan that sets forth investment policies and guidelines to be utilized in
administering the variable college savings program. Except as provided in
section 3334.20 of the
Revised Code, the authority shall
contract with one or more insurance companies, banks, or other
financial institutions to act as its investment agents and to
provide such services as the authority considers appropriate to
the investment plan, including: (1) Purchase, control, and safekeeping of assets; (2) Record keeping and accounting for individual accounts and
for the program as a whole; (3) Provision of consolidated statements of
account. (B) The authority or its investment agents shall maintain a
separate account for the beneficiary of each contract entered into under the
variable college savings program. If a beneficiary has more than one such
account, the authority or its agents shall track total
contributions and earnings and provide a consolidated system of
account distributions to institutions of higher education. (C) The authority or its agents may place assets of the program
in savings accounts and may purchase fixed or variable life insurance or
annuity contracts,
securities, evidence of indebtedness, or other investment products pursuant to
the investment plan. (D) Contributors shall not direct the investment of their
contributions under the investment plan. The authority shall impose other
limits on contributors' investment discretion as required under section 529
of the Internal Revenue Code. (E) The investment agents with which the authority
contracts shall discharge their duties with respect to program funds with the
care and diligence
that a prudent person familiar with such matters and with the character and
aims of the program would use. (F) The assets of the program shall be preserved, invested, and
expended solely for the purposes of this chapter and shall not be loaned or
otherwise transferred or used
by the state for any other purpose. This section shall not be construed to
prohibit the investment agents of the authority from investing, by purchase or
otherwise, in
bonds, notes, or other obligations of the state or any agency or
instrumentality of the state. Unless otherwise specified by the
authority, assets of the program shall be expended in the
following order of priority: (1) To make payments on behalf of beneficiaries; (2) To make refunds upon termination of variable college savings
program contracts; (3) To pay the costs of program administration and operations. (G) No records of the authority indicating the identity of
contributors and beneficiaries under the program or amounts
contributed to, earned by, or distributed from program accounts
are public records within the meaning of section 149.43 of the Revised Code. Sec. 3334.20. (A) AS USED IN THIS SECTION, "STATE AGENCY" MEANS
EVERY
DEPARTMENT, BUREAU, BOARD, COMMISSION, OFFICE, OR OTHER ORGANIZED
BODY ESTABLISHED BY THE CONSTITUTION OR LAWS OF THIS STATE FOR THE
EXERCISE OF STATE GOVERNMENT. (B) If a condition arises concerning the investment of funds
received under the variable college savings program and REQUIRING an interim
period for investment of program funds, which condition is
determined pursuant to division (D) of this section, the
Ohio
tuition trust Authority shall choose the treasurer of state, a state agency
having investment authority, or an investment agent
under contract with the authority to invest program funds pursuant
to the investment plan established under division (A) of section
3334.19 of the Revised Code. The treasurer of state, state
agency, OR INVESTMENT AGENT chosen by the authority pursuant to this division
shall be subject to the requirements and conditions
that apply to investment agents specified in section 3334.19 of the
Revised Code. (C) The authority shall be the trustee of the program. DURING
THE INTERIM PERIOD, the authority shall receive and hold all payments,
deposits, and contributions, as well as gifts, bequests,
endowments, and federal, state, or local grants and any funds from
any other source, public or private, and all earnings, until
disbursed to pay tuition or other higher education expenses or
refunds pursuant to college savings plans contracts. The
authority shall keep such funds segregated from all other assets
of the authority. (D) The authority shall adopt rules under section 111.15 of the
Revised Code defining the
conditions under which an interim investment period is required
and this section applies. The rules shall include any condition
requiring THE TERMINATION OF THE INTERIM PERIOD AND the authority
to contract with alternative investment agents pursuant to section
3334.19 of the Revised Code and any other requirements that
apply
during the interim investment period. (E) When the interim period for investment of program funds
terminates, the investment agents selected pursuant to section 3334.19 of
the Revised Code for the investment of program funds SHALL
HAVE THE SOLE AUTHORITY TO INVEST PROGRAM FUNDS PURSUANT TO THE
INVESTMENT PLAN ESTABLISHED UNDER DIVISION (A) OF THAT
SECTION AND SHALL BE SUbject to that section. Sec. 3334.21. The variable college savings program may be
terminated by statute or upon the determination of the Ohio
tuition trust authority that the program is not financially feasible.
Upon termination, all amounts held in program accounts shall be returned
to account owners, to the extent possible, and any unclaimed assets in
the program shall be transferred to the unclaimed funds trust fund
and disposed of in accordance with section 169.05 of the Revised Code. Sec. 3366.01. As used in this chapter, the following
words and terms have the following meanings unless the
context indicates a different meaning or intent: (A) "Bond proceedings" means the
order, trust, agreement, indenture and other agreements, or
amendments and supplements to the foregoing, or any one or more
or combination thereof, authorizing or providing for the terms
and conditions applicable to, or providing for the issuance,
security, or liquidity of, obligations and the provisions
contained in such obligations. (B) "Bond service charges" means
principal, including mandatory sinking fund requirements for
retirement of obligations, and interest, and redemption premium,
if any, required to be paid on obligations. (C) "Bond service fund" means the
applicable fund and accounts therein created in the bond
proceedings for and pledged to the payment of bond service
charges, including all moneys and investments, and earnings from
investments, credited and to be credited thereto. (D) "Costs of attendance" means all
costs of a student incurred in connection with
a program of study at an eligible institution,
as determined by the institution, including tuition;
instructional fees; room and board; books, computers, and
supplies; and other related fees, charges, and expenses. (E) "Designated nonprofit
corporation administrator" means, with respect to all
obligations issued prior to september 1,
1999, and to all nonfederal education loans,
the nonprofit corporation designated on November 10,
1992,
under division (D) of section 3351.07 of the
Revised Code to operate exclusively for
charitable and educational purposes by expanding access to higher
education financing programs for students and families in need of
student financial aid.
For all other purposes, "designated administrator" means the Ohio
corporation that is a subsidiary of the nonprofit corporation designated
under division (D) of section 3351.07 of the Revised
Code
and that has agreed to enter into an administration agreement with the issuing
authority and the director of development, or any other person that enters
into
an administration agreement with the issuing authority and the director
of development. (F) "Education loan" means a loan
made by an eligible lender pursuant to the policy guidelines to
or for the benefit
of a student for the purpose of financing part or all of the
student's costs of attendance. (G) "Eligible borrower" means any of
the following: (1) Individuals who are residents of the state, and who
are attending and are in good standing in, or who have been
accepted for attendance at, any eligible institution located in
this state or elsewhere, on a part-time or full-time basis, to
pursue an associate, baccalaureate, or advanced degree or a
nursing diploma; (2) Individuals who reside outside the state and who
have been accepted for attendance at, or who are attending and
are in good standing in, any eligible institution located in this
state, on a part-time or full-time basis, to pursue an associate,
baccalaureate, or advanced degree or a nursing diploma; (3) Individuals who are parents or legal guardians of,
or other persons, as set forth in the policy guidelines,
borrowing under an education loan for the benefit of
individuals meeting requirements set forth in division
(G)(1) or (2) of this section, in order to assist them
in paying costs of attendance. (H)(1) "Eligible institution" means
an institution described in any of divisions
(H)(1)(a), (b), or (c) of this section that satisfies
all
of the requirements set forth in divisions
(H)(2), (3), and (4) of this section. (a) The institution is a state-assisted
post-secondary educational institution within this state. (b) The institution is a nonprofit institution
within this state having a certificate of authorization from the
Ohio board of regents pursuant to Chapter 1713.
of the Revised Code. (c) The institution is a post-secondary
educational institution similar to one described in division
(H)(1)(a) or (b) of this section that
is located outside this state and that is similarly approved by
the appropriate agency of that state. (2) The institution is accredited by the appropriate
regional and, when appropriate, professional accrediting
associations within whose jurisdiction it falls. (3) The institution satisfies the eligibility
requirements for participation in the federal family education
loan program authorized under Title IV,
Part B, of the "Higher
Education Act of 1965," 20
U.S.C.A. 1071 et seq., as
amended, as long as that program remains in existence. (4) The institution satisfies the other conditions set
forth in the policy guidelines. (I) "Eligible lender" means, with respect to lenders making
nonfederal education loans, a bank, national banking
association, savings bank, savings and loan association, or
credit union having an office in this state that satisfies the
criteria for eligible lenders established pursuant to the policy
guidelines. With respect to lenders making federal education loans,
"eligible
lender" means any person that is permitted to make loans under the
federal family education loan program authorized under Title
IV,
Part B, of the "Higher Education
Act of 1965," 20 U.S.C.A. 1071 et seq., as amended; that
has an office in this state; and that satisfies the criteria for eligible
lenders established pursuant to the policy guidelines. (J) "Federal education loan" means an education loan that is
originated in compliance with the federal family education loan program
authorized under Title
IV,
Part
B, of the
"Higher Education Act of
1965," 20 U.S.C.A. 1071 et seq., as amended. (J)(K) "Governmental agency" means the
state and any state department, division, commission,
institution, or authority; the United States or
any agency thereof; or any agency, commission, or authority
established pursuant to an interstate compact or agreement; or
any combination of the foregoing.
(K)(L) "Issuing authority" means the
treasurer of state, or the officer who by law performs the
functions of the treasurer of state.
(L)(M) "Nonfederal education loan" means any education
loan that is
not a federal education loan.
(N) "Obligations" means the bonds,
notes, or securities of this state issued by the issuing
authority pursuant to this chapter. (M)(O) "Person" means any individual,
corporation, business trust, estate, trust, partnership, or
association, any federal, state, interstate, regional, or local
governmental agency, any subdivision of the state, or any
combination of these.
(N)(P) "Pledged receipts" means, to the
extent the following are pledged by the bond proceedings for
the payment of bond service charges: all receipts representing
moneys accruing from or in connection with the repayment of
education loans, including interest and payments from any
guarantee or insurance in respect to such education loans;
accrued interest received from the sale of obligations; the
balances in the special funds; income from the investment of the
special funds; all right, title, or interest of the state in any
education loans and any guarantees or insurance in respect
thereof; all right, title, and interest of the state and the
designated
nonprofit corporation administrator in the education loans and
any guarantees
or insurance in respect thereof, and any money representing the
proceeds of obligations or any income from or interest on those
proceeds; or any other gifts, grants, donations, and pledges and
any income and receipts therefrom, available and pledged for the
payment of bond service charges.
(O)(Q) "Policy guidelines" means the
rules adopted pursuant to division (A) of section
3366.03 of the Revised Code.
(P)(R) "Proceeds loan" means the
transfer, pursuant to a loan agreement or agency agreement, of
the proceeds of the obligations, or the deposit of the proceeds
of the obligations with a trustee in trust under a trust
agreement, indenture, or other trust document under the bond
proceedings pending their disbursement for the purposes
authorized by this chapter.
(Q)(S) "Resident" means any student who
would qualify as a resident of this state for state subsidy and
tuition surcharge purposes under rules adopted by the
Ohio board of regents under section 3333.31 of the
Revised Code.
(R)(T) "Special funds" or
"funds" means the bond service fund and any other
funds, including reserve funds, created under the bond
proceedings, including all moneys and investments, and earnings
from investment, credited and to be credited thereto.
(S)(U) "Student" means an individual
described in division (G)(1) or (2) of this section who
meets requirements established under the policy guidelines. "Student"
includes dependent and independent
undergraduate, graduate, and professional students.
(T)(V) "Subdivision" has the same
meaning as in division (MM) of section 133.01 of the
Revised Code.
Sec. 3366.03. (A) In furtherance of the
public policy and purpose set forth in section 3366.02 of the
Revised Code and to implement that purpose, the
director of development, with the approval of the issuing
authority, shall adopt, amend, or rescind rules, pursuant to
Chapter 119. of the Revised Code, establishing such policy
guidelines as the director considers necessary or appropriate to
provide for creating a secondary market for education loans
as authorized by this chapter. The policy guidelines shall
include such provisions as the director
considers appropriate to further the public policy and purpose
set forth in section 3366.02 of the Revised
Code. (B) The director of development or the issuing
authority or both may: (1) Enter into agreements with the any designated nonprofit
corporation administrator to provide for the proceeds loan for the
purchase of
education loans on the secondary market; (2) Enter into agreements with the any designated nonprofit
corporation administrator to provide for stimulating the making of
education
loans through the the acquisition of such loans, in accordance
with the policy guidelines; and (3) Do all other acts and enter into contracts and
execute all instruments necessary or appropriate to carry out the
provisions of this chapter. (C) All expenses and obligations incurred by
the issuing authority or the director of development in carrying
out duties and in exercising powers under this chapter shall be
payable solely from, as appropriate, pledged receipts, moneys
from the sale of obligations, or any amounts contributed by the
designated nonprofit corporation administrator. This chapter
does not
authorize the issuing authority to incur debt or bonded
indebtedness of the state, or to obligate or pledge any moneys
other than pledged receipts for the payment of any obligations. (D) The designated nonprofit corporation administrator,
subject to the applicable provisions of this chapter, shall
purchase education loans from eligible lenders directly or
indirectly, with moneys
loaned or otherwise provided to it under this chapter from the
proceeds of obligations, which education loans are used by and
for students
for paying costs of attendance at eligible institutions. (E) In accordance with the policy guidelines,
the designated nonprofit corporation administrator shall do all
of the
following: (1) Specify the terms of and procedures for making,
selling, purchasing, servicing, and collecting those education
loans eligible for purchase under the guidelines; (2) Take such actions as may be necessary or
appropriate to establish the terms of, purchase, service or
otherwise administer, and collect any education loan; (3) With respect to those loans acquired pursuant to this
chapter, establish the fees including, without limitation,
origination and loan fees; charges; rates of interest; times of
payment of interest and principal; late charges; aggregate
amounts of education loans to be issued per year and in total;
eligibility and credit criteria of eligible borrowers;
refinancing or consolidation
provisions; criteria for participation by eligible lenders;
criteria for allocating the distribution of education loans among
students attending or planning to attend different eligible
institutions; terms of sales and purchases of education loans;
and other terms, conditions, and provisions of and security for
education loans. The designated nonprofit corporation administrator shall not
purchase any
education loan unless the loan conforms to the policy
guidelines. (F) If the director of development determines that
education loans are not being made in the amount or manner
anticipated, the designated nonprofit corporation administrator,
with the
consent of the director, may enter into special arrangements with
certain eligible lenders pursuant to guidelines adopted under
this chapter to stimulate the provision of education loans. (G) The designated nonprofit
corporation administrator may establish additional procedures and
set
other terms and conditions not inconsistent with the policy
guidelines as may be necessary or appropriate in connection with
the program authorized under this chapter. (H) At least annually by a date specified by
the director of development, the designated nonprofit corporation
administrator
shall provide to the issuing authority and the director of
development reports on the use of the proceeds of obligations. (I) For purposes of this chapter, any designated administrator
other than the nonprofit corporation designated under division (D)
of section 3351.07 of the Revised Code shall be a person
that
maintains its principal place of business in the state and that has as its
principal business the making, purchasing, holding, or
selling of loans made to finance individuals' cost of post-secondary
education. Sec. 3366.04. (A) The issuing authority may
issue obligations under this section to provide money
to make proceeds loans to the designated nonprofit
corporation administrator for the purpose of acquiring education
loans, or needed for capitalized interest, for funding reserves,
and for paying costs and expenses incurred in connection with the
issuance, carrying, securing, paying, redeeming, or retirement of
the obligations or any obligations refunded thereby, including
payment of costs and expenses relating to letters of credit,
lines of credit, insurance, put agreements, standby purchase
agreements, indexing, marketing, remarketing and administrative
arrangements, interest swap or hedging agreements, and any other
credit enhancement facility as defined in division (H) of
section 133.01 of the Revised Code, liquidity,
remarketing, renewal, or refunding arrangements, all of which are
authorized by this section. The proceeds thereof shall, as
provided in the bond proceedings, be loaned, or otherwise made
available as a proceeds loan, to the designated nonprofit
corporation administrator. The issuing authority may appoint
trustees, paying
agents, and transfer agents and may retain the services of
financial advisors, accounting experts, and attorneys, and retain
or contract for the services of marketing, remarketing, indexing,
and administrative agents, other consultants, and independent
contractors, including printing services, as are necessary to
carry out the provisions of this section. The costs of such
services are allowable costs payable from the proceeds of such
obligations. (B) The holders or owners of obligations shall
have no right to have taxes levied by the general assembly, or
any moneys other than pledged receipts obligated or pledged, and
any moneys other than pledged receipts shall not be obligated or
pledged, for the payment of bond service charges. The
obligations are not debts of the state, bond service charges are
payable solely from the revenues and funds pledged as pledged
receipts for their payment, and the right of such holders and
owners to payment of bond service charges is limited to pledged
receipts as provided in the bond proceedings, and each such
obligation shall bear on its face a statement to that effect.
No money, including money from the general revenue fund, shall be
appropriated, obligated, or used to pay bond
service charges or the costs incurred in the administration of
this chapter, other than pledged receipts. (C) Obligations shall be authorized by order of
the issuing authority at the request of the designated nonprofit
corporation administrator and with the approval of the director of
development,
and the bond proceedings shall provide for the purpose thereof
and the principal amount or amounts, and shall provide for or
authorize the manner for determining the principal maturity or
maturities, the interest rate or rates or the maximum interest
rate, the date of the obligations and the dates of payment of
interest thereon, their denomination, and the establishment
within or outside this state of a place or places of payment of
bond service charges. Sections 9.98 to 9.983 of the
Revised Code apply to obligations issued under
this section. The purpose of such obligations may be stated in
the bond proceedings in terms describing the general purpose to
be served. The bond proceedings shall also provide, subject to
the provisions of any other applicable bond proceedings, for the
pledge of, and the granting of a security interest in, all, or
such part as the issuing authority may determine, of the pledged
receipts to the payment of bond service charges, which pledge may
be made and security interest granted, subject to the provisions
of any applicable prior bond proceedings, either prior to or on a
parity with or subordinate to other expenses, claims, or
payments, and may be made or granted to secure obligations senior
or subordinate to, or on a parity with, obligations theretofore
or thereafter issued, if and to the extent provided in the bond
proceedings. The pledged receipts so pledged or subject to a
security interest and thereafter received by the issuing
authority or the designated nonprofit corporation administrator
on behalf of
the issuing authority or otherwise received are immediately
subject to
such pledge and security interest without any physical delivery
thereof or further act, and such pledge and security interest are
valid, binding, and enforceable against all parties having claims
of any kind against the state or any governmental agency, or
against the designated nonprofit corporation administrator,
whether or not such
parties have notice thereof, and shall create a perfected
security interest for all purposes of Chapter 1309. of
the Revised Code, without the necessity for
separation or delivery or possession of the pledged receipts, or
for the filing or recording of the bond proceedings by which such
pledge and security interest are created or any certificate,
statement, or other document with respect thereto; and the pledge
of such pledged receipts and the security interest are effective
and the money therefrom and thereof may be applied to the
purposes for which pledged without necessity for any act of
appropriation. Every pledge made and security interest granted,
and every covenant and agreement made with respect thereto in the
bond proceedings may therein be extended to the benefit of the
owners and holders of obligations authorized by this section, and
to any trustee therefor, for the further security of the payment
of the bond service charges. (D) The bond proceedings may contain additional
provisions as to: (1) The redemption of obligations prior to maturity at
such price or prices and under such terms and conditions as are
provided in the bond proceedings; (2) Other terms of the obligations; (3) Limitations on the issuance of additional
obligations; (4) The terms of any trust agreement or indenture
securing the obligations or under which the same may be issued; (5) The investment of the proceeds of obligations and
amounts on deposit in the special funds; (6) Any or every provision of the bond proceedings
being binding upon such officer, board, commission, authority,
agency, department, or other person or body as may from time to
time have the authority under law to take such actions as may be
necessary to perform all or any part of the duty required by such
provision; (7) Any provision that may be made in a trust agreement
or indenture; (8) Provisions for the use of the proceeds of repayment
of education loans to acquire additional education loans; (9) Any other or additional agreements with the holders
of the obligations, the trustee therefor, or the designated
nonprofit corporation administrator, relating to the obligations
or the
security therefor, including the assignment of security obtained
or to be obtained for education loans. (E) The obligations and any coupons pertaining
to obligations shall be in the form specified in the bond
proceedings and shall be signed by or bear the facsimile
signature of the issuing authority. Any obligations or coupons
may be executed by the person who, on the date of execution, is
the proper issuing authority although on the date of such bonds
or coupons such person was not the issuing authority. In case
the issuing authority whose signature or a facsimile of whose
signature appears on any such obligation or coupon ceases to be
the issuing authority before delivery thereof, such signature or
facsimile is nevertheless valid and sufficient for all purposes
as if that official had remained the issuing authority until such
delivery. (F) All obligations are negotiable instruments
and securities under Chapter 1308. of the Revised
Code, subject to the provisions of the bond proceedings
as to registration. The obligations may be issued in coupon or
in registered form, or both, as the issuing authority
determines. Provision may be made for the registration of any
obligations with coupons attached thereto as to principal alone
or as to both principal and interest, their exchange for
obligations so registered, and for the conversion or reconversion
into obligations with coupons attached thereto of any obligations
registered as to both principal and interest, and for reasonable
charges for such registration, exchange, conversion, and
reconversion. (G) Obligations may be sold at public sale or
at private sale, as determined by the issuing authority in the
bond proceedings. (H) Pending preparation of definitive
obligations, the issuing authority may issue interim receipts or
certificates which shall be exchanged for such definitive
obligations. (I) In the discretion of the issuing authority,
obligations may be secured additionally by a trust agreement or
indenture between the issuing authority and a corporate trustee
and, if so provided for in the bond proceedings, any other
necessary or appropriate party. Any such trustee shall be a
trust company, bank, or national banking association authorized
to exercise trust powers within the state. Any such agreement or
indenture may contain the order authorizing the issuance of the
obligations, any provisions that may be contained in any bond
proceedings, and other provisions which are customary or
appropriate in an agreement or indenture of such type, including,
but not limited to: (1) Maintenance of each pledge, security interest, and
trust agreement, indenture, or other instrument comprising part
of the bond proceedings until the bond service charges on the
obligations secured thereby have been fully paid, or provision
therefor has been made in accordance with the bond proceedings; (2) In the event of default in any payments required to
be made by the bond proceedings, or any other agreement of the
issuing authority made as a part of the contract under which the
obligations were issued, enforcement of such payments or
agreement by mandamus, the appointment of a receiver, suit in
equity, action at law, or any combination of the foregoing; (3) The rights and remedies of the holders of
obligations and of the trustee, and provisions for protecting and
enforcing them, including limitations on rights of individual
holders of obligations; (4) The replacement of any obligations that become
mutilated or are destroyed, lost, or stolen; (5) Such other provisions as the trustee and the
issuing authority agree upon, including limitations, conditions,
or qualifications relating to the education loans that may be
made or acquired pursuant to the trust agreement or indenture. (J) Any holder of obligations or a trustee
under the bond proceedings, except to the extent that rights are
restricted by the bond proceedings, may by any suitable form of
legal proceedings, protect and enforce any rights under the laws
of this state or granted by such bond proceedings. Such rights
include the right to compel the performance of all duties of the
issuing authority or the director of development required by this
chapter or the bond proceedings; to enjoin unlawful activities;
and, in the event of default with respect to the payment of any
bond service charges on any obligations or in the performance of
any covenant or agreement on the part of the issuing authority or
the director of development in the bond proceedings, to apply to
a court having jurisdiction to appoint a receiver to receive and
administer the pledged receipts pledged to the payment of the
bond service charges on such obligations or which are the subject
of the covenant or agreement, with full power to pay and to
provide for payment of bond service charges on such obligations
and with such powers, subject to the direction of the court, as
are accorded receivers in general equity cases, excluding any
power to pledge revenues or receipts or other income or moneys,
other than pledged receipts, and excluding any power to take
possession of, or cause the sale or otherwise dispose of, any
property other than the pledged receipts. Each duty of the issuing authority, of each governmental
agency including the director of development, of the designated
nonprofit corporation administrator, and of any of the officers,
members, or
employees of any of the foregoing, undertaken pursuant to the
bond proceedings or any agreement made under authority of this
chapter, and each duty in every agreement by or with the issuing
authority under this chapter, each governmental agency including
the director of development, and the designated nonprofit
corporation administrator, is hereby established as a duty of the
issuing
authority, the governmental agency, or the designated nonprofit
corporation administrator, respectively, and of each such officer,
member, or
employee having authority to perform such duty, specifically
enjoined by the law resulting from an office, trust, or station
within the meaning of section 2731.01 of the Revised
Code. The person who is at the time the issuing authority or
the director of development, or the officers or employees of
either of them, are not liable in their personal capacities on
any obligations or any agreements of or with the issuing
authority or the director of development. (K) The issuing authority may issue obligations
for the refunding, including funding and retirement, and advance
refunding with or without payment or redemption prior to
maturity, of any obligations previously issued. Such obligations
may be issued in amounts sufficient for payment of the principal
amount of the prior obligations, any redemption premiums thereon,
principal maturities of any such obligations maturing prior to
the redemption of the remaining obligations on a parity
therewith, interest accrued or to accrue to the maturity dates or
dates of redemption of such obligations, and expenses incurred or
to be incurred in connection with such issuance and such
refunding, funding, and retirement. Subject to the bond
proceedings therefor, the portion of proceeds of the sale of
obligations issued under this division to be applied to bond
service charges on the prior obligations shall be credited to an
appropriate account held by the trustee for such prior or new
obligations or to the appropriate account in the bond service
fund for such obligations. Obligations authorized under this
division shall be deemed to be issued for those purposes for
which such prior obligations were issued and are subject to the
provisions of this section pertaining to other obligations,
except as otherwise provided in this section. (L) The authority to issue obligations under
this section includes authority to issue obligations in the form
of bond anticipation notes and to renew the same from time to
time by the issuance of new notes. The holders of such notes or
interest coupons pertaining thereto shall have a right to be paid
solely from the pledged receipts and special funds that may be
pledged to the payment of the bonds anticipated, or from the
proceeds of such anticipated bonds or renewal notes, or both, as
the issuing authority provides in the order authorizing such
notes. Such notes may be additionally secured by covenants of
the issuing authority and the director of development to the
effect that the issuing authority and the director of development
will do such or all things necessary for the issuance of such
bonds or renewal notes in appropriate amounts, and apply the
proceeds thereof to the extent necessary, to make full payment of
the principal of and interest on such notes at the time or times
contemplated, as provided in such order. For such this purpose,
the
issuing authority shall issue bonds or renewal notes in such
principal amount and upon such terms as may be necessary to
provide funds to pay, when required, the principal of and
interest
and any premium on such notes. Subject to this division, all
provisions for and references to obligations in this section are
applicable to notes authorized under this division. The issuing authority in the bond proceedings
authorizing the issuance of bond anticipation notes shall set
forth for such bonds an estimated interest rate and a schedule of
principal payments for such bonds and the annual maturity dates
thereof, but this provision does not modify any authority in this
section to pledge receipts to, to grant a security interest in
those receipts for the purpose of securing, and to covenant to
issue bonds to fund, the payment of principal of and interest and
any premium on such notes, or to provide in the bond proceedings
authorizing the issuance of the anticipated bonds interest rates
and a schedule of principal payments for such bonds and the
annual maturity dates thereof which differ from the estimates in
the bond proceedings authorizing the issuance of such bond
anticipation notes. (M) Obligations issued under this section are
lawful investments for banks; savings banks; savings and loan
associations;
credit union share guarantee corporations; trust companies;
trustees; fiduciaries; insurance companies, including domestic
for life and domestic not for life; trustees or other officers
having charge of sinking and bond retirement or other special
funds of the state and of subdivisions and taxing districts of
the state; the commissioners of the sinking fund of the state;
the administrator of workers' compensation, subject to the
approval of the workers' compensation board; the state teachers
retirement system; the public employees retirement system; the
school employees retirement system; and the Ohio police and
fire pension fund, notwithstanding any other
provisions
of the Revised Code or rules adopted pursuant
to
those provisions by any agency of the state with respect to
investments by them, and are also eligible as security for the
repayment of the deposit of public moneys. (N) Provision may be made in the applicable
bond proceedings for the establishment of separate accounts in
the bond service fund and for the application of such accounts
only to the specified bond service charges on obligations
pertinent to such accounts and bond service fund and for other
accounts therein within the general purposes of such
fund. Unless otherwise provided in any applicable bond
proceedings, moneys to the credit of or in the several special
funds established pursuant to this section shall be invested and
disbursed as provided in the bond proceedings. (O) The issuing authority shall pledge and
grant a security interest in all, or such portion as the issuing
authority determines, of the pledged receipts to the payment of
bond service charges on obligations, and for the establishment
and maintenance of any reserves, as provided in the bond
proceedings, and make other provisions therein with respect to
pledged receipts as authorized by this chapter, which provisions
are controlling notwithstanding any other provisions of law
pertaining thereto. (P) The obligations, the transfer thereof, and
the interest, accreted amount, and other income therefrom,
including any profit made on the sale thereof, shall at all times
be free from taxation, direct or indirect, within this state. Sec. 5747.01. Except as otherwise expressly provided or
clearly appearing from the context, any term used in this chapter
has the same meaning as when used in a comparable context in the
Internal Revenue Code, and all other statutes of the United
States relating to federal income taxes. As used in this chapter: (A) "Adjusted gross income" or "Ohio adjusted gross
income" means adjusted gross income as defined and used in the
Internal Revenue Code, adjusted as provided in this section: (1) Add interest or dividends on obligations or securities
of any state or of any political subdivision or authority of any
state, other than this state and its subdivisions and authorities. (2) Add interest or dividends on obligations of any
authority, commission, instrumentality, territory, or possession
of the United States that are exempt from federal income taxes
but not from state income taxes. (3) Deduct interest or dividends on obligations of the
United States and its territories and possessions or of any
authority, commission, or instrumentality of the United States to
the extent included in federal adjusted gross income but exempt
from state income taxes under the laws of the United States. (4) Deduct disability and survivor's benefits to the
extent included in federal adjusted gross income. (5) Deduct benefits under Title II of the Social Security
Act and tier 1 railroad retirement benefits to the extent
included in federal adjusted gross income under section 86 of the
Internal Revenue Code. (6) Add, in the case of a taxpayer who is a beneficiary of
a trust that makes an accumulation distribution as defined in
section 665 of the Internal Revenue Code, the portion, if any, of
such distribution that does not exceed the undistributed net
income of the trust for the three taxable years preceding the
taxable year in which the distribution is made. "Undistributed
net income of a trust" means the taxable income of the trust
increased by (a)(i) the additions to adjusted gross income
required under division (A) of this section and (ii) the personal
exemptions allowed to the trust pursuant to section 642(b) of the
Internal Revenue Code, and decreased by (b)(i) the deductions to
adjusted gross income required under division (A) of this
section, (ii) the amount of federal income taxes attributable to
such income, and (iii) the amount of taxable income that has been
included in the adjusted gross income of a beneficiary by reason
of a prior accumulation distribution. Any undistributed net
income included in the adjusted gross income of a beneficiary
shall reduce the undistributed net income of the trust commencing
with the earliest years of the accumulation period. (7) Deduct the amount of wages and salaries, if any, not
otherwise allowable as a deduction but that would have been
allowable as a deduction in computing federal adjusted gross
income for the taxable year, had the targeted jobs credit allowed
and determined under sections 38, 51, and 52 of the Internal
Revenue Code not been in effect. (8) Deduct any interest or interest equivalent on public
obligations and purchase obligations to the extent included in
federal adjusted gross income. (9) Add any loss or deduct any gain resulting from the
sale, exchange, or other disposition of public obligations to the
extent included in federal adjusted gross income. (10) Regarding tuition credits purchased under Chapter 3334. of the
Revised
Code: (a) Deduct the following:
(i) For credits that as of the end of the taxable
year have not been refunded pursuant to the termination of a tuition payment
contract under section 3334.10 of the Revised
Code, the amount of income related to the
credits, to the extent included in federal adjusted gross income;
(ii) For credits that during the taxable year have
been refunded pursuant to the termination of a tuition payment contract under
section 3334.10 of the Revised Code, the excess of the total purchase price
of the tuition credits refunded over the amount of refund, to the extent the
amount of the excess was not deducted in determining federal adjusted
gross income.
(b) Add the following:
(i) For credits that as of the end of the taxable
year have not been refunded pursuant to the termination of a tuition payment
contract under section 3334.10 of the Revised Code, the amount of loss related
to the credits, to the extent the amount of the loss was deducted in
determining federal adjusted gross income;
(ii) For credits that during the taxable year have
been refunded pursuant to the termination of a tuition payment contract under
section 3334.10 of the Revised
Code, the excess of the amount of refund over
the purchase price of each tuition credit refunded, to the extent not included
in federal adjusted gross income
Deduct or add amounts, as provided under section 5747.70 of the
Revised
Code, related to contributions to variable college savings program
accounts made or tuition credits purchased pursuant to Chapter
3334. of the Revised Code.
(11)(a) Deduct, to the extent not otherwise allowable as a deduction or
exclusion in computing federal or Ohio adjusted gross income for the taxable
year, the amount the taxpayer paid during the taxable year for medical care
insurance and qualified long-term care insurance for the taxpayer, the
taxpayer's spouse, and dependents. No deduction for medical care insurance
under division (A)(11) of this section shall be allowed either to any taxpayer
who is eligible to participate in any subsidized health plan maintained by any
employer of the taxpayer or of the taxpayer's spouse, or to any taxpayer who
is entitled to, or on
application would be entitled to, benefits under part A of Title
XVIII of the "Social Security Act," 49 Stat. 620 (1935), 42 U.S.C.
301, as amended. For the purposes of division (A)(11)(a) of this
section, "subsidized health plan" means a health plan for which
the employer pays any portion of the plan's cost. The deduction
allowed under division (A)(11)(a) of this section shall be the net
of any related premium refunds, related premium reimbursements, or
related insurance premium dividends received during the taxable
year. (b) Deduct, to the extent not otherwise deducted or excluded in
computing federal or Ohio adjusted gross income during the taxable
year, the amount the taxpayer paid during the taxable year, not
compensated for by any insurance or otherwise, for medical care of
the taxpayer, the taxpayer's spouse, and dependents, to the extent
the expenses exceed seven and one-half per cent of the taxpayer's
federal adjusted gross income. (c) For purposes of division (A)(11) of this section, "medical
care" has the meaning given in section 213 of the Internal Revenue
Code, subject to the special rules, limitations, and exclusions
set forth therein, and "qualified long-term care" has the same
meaning given in section 7702(B)(b) of the Internal Revenue Code. (12)(a) Deduct any amount included in federal adjusted gross
income solely because the amount represents a reimbursement or
refund of expenses that in any year the taxpayer had
deducted as an itemized deduction pursuant to section 63 of the
Internal Revenue Code and applicable United States
department of the treasury regulations.
The deduction otherwise allowed under
division (A)(12)(a) of this section shall be reduced to the extent
the reimbursement is attributable to an amount the taxpayer
deducted under this section in any taxable year. (b) Add any amount not otherwise included in Ohio adjusted gross
income for any taxable year to the extent that the amount is
attributable to the recovery during the taxable year of any amount
deducted or excluded in computing federal or Ohio adjusted gross
income in any taxable year. (13) Deduct any portion of the deduction described in
section 1341(a)(2) of the Internal Revenue Code, for repaying
previously reported income received under a claim of right, that
meets both of the following requirements: (a) It is allowable for repayment of an item that was
included in the taxpayer's adjusted gross income for a prior
taxable year and did not qualify for a credit under division (A)
or (B) of section 5747.05 of the Revised Code for that year; (b) It does not otherwise reduce the taxpayer's adjusted
gross income for the current or any other taxable year. (14) Deduct an amount equal to the deposits made to, and
net investment earnings of, a medical savings account during the taxable year,
in accordance with section 3924.66 of the Revised Code. The deduction
allowed by division (A)(14) of this section does not apply to medical
savings account deposits and earnings otherwise deducted or excluded for the
current or any other taxable year from the taxpayer's federal adjusted gross
income. (15)(a) Add an amount equal to the funds withdrawn from a medical
savings account during the taxable year, and the net investment earnings on
those funds, when the funds withdrawn were used for any purpose other than to
reimburse an account holder for, or to pay, eligible medical expenses, in
accordance with section 3924.66 of the Revised Code; (b) Add the amounts distributed from a medical savings account
under division (A)(2) of section 3924.68 of the Revised Code during the
taxable year. (16) Add any amount claimed as a credit under section 5747.059 of the Revised
Code to the extent that such amount satisfies either of the following: (a) The amount was deducted or excluded from the computation of the
taxpayer's federal adjusted gross income as required to be reported for the
taxpayer's taxable year under the Internal Revenue Code; (b) The amount resulted in a reduction of the taxpayer's federal adjusted
gross income as required to be reported for any of the taxpayer's taxable
years under the Internal Revenue Code. (17) Deduct the amount contributed by the taxpayer to an
individual development account program established by a county department of
human services pursuant to sections 329.11 to 329.14 of the Revised Code for
the purpose of matching funds deposited by program participants. On request of
the tax commissioner, the taxpayer shall provide any information that, in the
tax commissioner's opinion, is necessary to establish the amount deducted under
division (A)(17) of this section. (18) Beginning in taxable year 2001, if the taxpayer is married
and files a joint return and the
combined federal adjusted gross income of the taxpayer and the taxpayer's
spouse for the taxable year does not exceed one hundred thousand dollars, or
if the taxpayer is single and has a federal adjusted gross income for the
taxable
year not exceeding fifty thousand dollars, deduct amounts paid during the
taxable year for qualified tuition and fees paid to an eligible institution
for the taxpayer, the taxpayer's spouse, or any dependent of the taxpayer, who
is a resident of this state and is enrolled in or attending a program that
culminates in a degree or diploma at an eligible institution. The deduction
may be claimed only to the extent that qualified tuition and fees are not
otherwise deducted or excluded for any taxable year from federal or
Ohio adjusted gross income. The deduction
may not be claimed for educational expenses for which the taxpayer claims a
credit under section 5747.27 of the Revised Code. (19) Add any reimbursement received during the taxable year of any amount
the taxpayer deducted under division (A)(18) of this section in any
previous taxable year to the extent the amount is not otherwise included in
Ohio adjusted gross income. (B) "Business income" means income arising from
transactions, activities, and sources in the regular course of a
trade or business and includes income from tangible and
intangible property if the acquisition, rental, management, and
disposition of the property constitute integral parts of the
regular course of a trade or business operation. (C) "Nonbusiness income" means all income other than
business income and may include, but is not limited to,
compensation, rents and royalties from real or tangible personal
property, capital gains, interest, dividends and distributions,
patent or copyright royalties, or lottery winnings, prizes, and
awards. (D) "Compensation" means any form of remuneration paid to
an employee for personal services. (E) "Fiduciary" means a guardian, trustee, executor,
administrator, receiver, conservator, or any other person acting
in any fiduciary capacity for any individual, trust, or estate. (F) "Fiscal year" means an accounting period of twelve
months ending on the last day of any month other than December. (G) "Individual" means any natural person. (H) "Internal Revenue Code" means the "Internal Revenue
Code of 1986," 100 Stat. 2085, 26 U.S.C.A. 1, as amended. (I) "Resident" means: (1) An individual who is domiciled in this state, subject
to section 5747.24 of the Revised Code; (2) The estate of a decedent who at the time of death
was domiciled in this state. The domicile tests of section
5747.24 of the Revised Code and any election under section
5747.25 of the Revised Code are not controlling for purposes of
division (I)(2) of this section. (J) "Nonresident" means an individual or estate that is
not a resident. An individual who is a resident for only part of
a taxable year is a nonresident for the remainder of that taxable
year. (K) "Pass-through entity" has the same meaning as in section 5733.04 of the
Revised Code. (L) "Return" means the notifications and reports required
to be filed pursuant to this chapter for the purpose of reporting
the tax due and includes declarations of estimated tax when so
required. (M) "Taxable year" means the calendar year or the
taxpayer's fiscal year ending during the calendar year, or
fractional part thereof, upon which the adjusted gross income is
calculated pursuant to this chapter. (N) "Taxpayer" means any person subject to the tax imposed
by section 5747.02 of the Revised Code or any pass-through entity that
makes the election under division (D) of section 5747.08 of the Revised Code. (O) "Dependents" means dependents as defined in the
Internal Revenue Code and as claimed in the taxpayer's federal
income tax return for the taxable year or which the taxpayer
would have been permitted to claim had the taxpayer filed a
federal income
tax return. (P) "Principal county of employment" means, in the case of
a nonresident, the county within the state in which a taxpayer
performs services for an employer or, if those services are
performed in more than one county, the county in which the major
portion of the services are performed. (Q) As used in sections 5747.50 to 5747.55 of the Revised Code: (1) "Subdivision" means any county, municipal corporation,
park district, or township. (2) "Essential local government purposes" includes all
functions that any subdivision is required by general law to
exercise, including like functions that are exercised under a
charter adopted pursuant to the Ohio Constitution. (R) "Overpayment" means any amount already paid that
exceeds the figure determined to be the correct amount of the
tax. (S) "Taxable income" applies to estates only and means
taxable income as defined and used in the Internal Revenue Code
adjusted as follows: (1) Add interest or dividends on obligations or securities
of any state or of any political subdivision or authority of any
state, other than this state and its subdivisions and
authorities; (2) Add interest or dividends on obligations of any
authority, commission, instrumentality, territory, or possession
of the United States that are exempt from federal income taxes
but not from state income taxes; (3) Add the amount of personal exemption allowed to the
estate pursuant to section 642(b) of the Internal Revenue Code; (4) Deduct interest or dividends on obligations of the
United States and its territories and possessions or of any
authority, commission, or instrumentality of the United States
that are exempt from state taxes under the laws of the United
States; (5) Deduct the amount of wages and salaries, if any, not
otherwise allowable as a deduction but that would have been
allowable as a deduction in computing federal taxable income for
the taxable year, had the targeted jobs credit allowed under
sections 38, 51, and 52 of the Internal Revenue Code not been in
effect; (6) Deduct any interest or interest equivalent on public
obligations and purchase obligations to the extent included in
federal taxable income; (7) Add any loss or deduct any gain resulting from sale,
exchange, or other disposition of public obligations to the
extent included in federal taxable income; (8) Except in the case of the final return of an estate,
add any amount deducted by the taxpayer on both its Ohio estate
tax return pursuant to section 5731.14 of the Revised Code, and
on its federal income tax return in determining either federal
adjusted gross income or federal taxable income; (9)(a) Deduct any amount included in federal taxable income
solely because the amount represents a reimbursement or refund of
expenses that in a previous year the decedent had deducted as an
itemized deduction pursuant to section 63 of the Internal Revenue
Code and applicable treasury regulations.
The deduction otherwise
allowed under division (S)(9)(a) of this section shall be reduced
to the extent the reimbursement is attributable to an amount the
taxpayer or decedent deducted under this section in any taxable
year. (b) Add any amount not otherwise included in Ohio taxable income
for any taxable year to the extent that the amount is attributable
to the recovery during the taxable year of any amount deducted or
excluded in computing federal or Ohio taxable income in any
taxable year. (10) Deduct any portion of the deduction described in
section 1341(a)(2) of the Internal Revenue Code, for repaying
previously reported income received under a claim of right, that
meets both of the following requirements: (a) It is allowable for repayment of an item that was
included in the taxpayer's taxable income or the decedent's
adjusted gross income for a prior taxable year and did not
qualify for a credit under division (A) or (B) of section 5747.05
of the Revised Code for that year. (b) It does not otherwise reduce the taxpayer's taxable
income or the decedent's adjusted gross income for the current or
any other taxable year. (11) Add any amount claimed as a credit under section 5747.059
of the Revised Code to the extent that the amount satisfies
either of the following: (a) The amount was deducted or excluded from the computation of the
taxpayer's federal taxable income as required to be reported for the
taxpayer's taxable year under the Internal Revenue Code; (b) The amount resulted in a reduction in the taxpayer's federal taxable
income as required to be reported for any of the taxpayer's taxable years
under the Internal Revenue Code. (T) "School district income" and "school district income
tax" have the same meanings as in section 5748.01 of the Revised
Code. (U) As used in divisions (A)(8), (A)(9), (S)(6), and
(S)(7) of this section, "public obligations," "purchase
obligations," and "interest or interest equivalent" have the same
meanings as in section 5709.76 of the Revised Code. (V) "Limited liability company" means any limited
liability company formed under Chapter 1705. of the Revised Code
or under the laws of any other state. (W) "Pass-through entity investor" means any person who, during any portion
of a taxable year of a pass-through entity, is a partner, member, shareholder,
or investor in that pass-through entity. (X) "Banking day" has the same meaning as in section 1304.01 of the Revised
Code. (Y) "Month" means a calendar month. (Z) "Quarter" means the first three months, the second three months, the
third three months, or the last three months of the taxpayer's taxable year. (AA)(1) "Eligible institution" means a state university or state
institution of higher education as defined in section 3345.011 of the Revised Code, or a
private, nonprofit college, university, or other post-secondary institution
located in this state that possesses a certificate of authorization issued by
the Ohio board of regents pursuant to Chapter 1713. of the Revised Code or a
certificate of registration issued by the state board of proprietary school
registration under Chapter 3332. of the Revised Code. (2) "Qualified tuition and fees" means tuition and fees imposed by an
eligible institution as a condition of enrollment or attendance, not exceeding
two thousand five hundred dollars in each of the individual's first two years
of post-secondary education. If the individual is a part-time student,
"qualified tuition and fees" includes tuition and fees paid for the academic
equivalent of the first two years of post-secondary education during a maximum
of five taxable years, not exceeding a total of five thousand dollars.
"Qualified tuition and fees" does not include: (a) Expenses for any course or activity involving sports, games,
or hobbies unless the course or activity is part of the individual's degree or
diploma program; (b) The cost of books, room and board, student activity fees,
athletic fees, insurance expenses, or other expenses unrelated to the
individual's academic course of instruction; (c) Tuition, fees, or other expenses paid or reimbursed through
an employer, scholarship, grant in aid, or other educational benefit program. (BB) Any term used in this chapter that is not otherwise defined in
this section and that is not used in a comparable context in the
Internal Revenue Code and other statutes of the
United States relating to federal income taxes has the same
meaning as in section 5733.40 of the Revised Code. This is an interim section effective until July 1, 2000. Sec. 5747.70. (A) In computing Ohio adjusted gross
income, a deduction from federal adjusted gross income is allowed to a
contributor for the amount contributed during the taxable year to a variable
college savings program
account and to a purchaser of tuition credits under the Ohio
college savings program created by Chapter 3334. of the
Revised
Code to the extent that the amounts of such contributions and
purchases were not deducted in determining the contributor's or
purchaser's federal adjusted gross income for the taxable year. The combined
amount of contributions and purchases deducted in any taxable year
by a taxpayer or the taxpayer and the taxpayer's spouse,
regardless of whether the taxpayer and the taxpayer's spouse file
separate returns or a joint return, is limited
to two thousand dollars for each beneficiary for whom
contributions or purchases are made. If the combined annual
contributions and purchases for a beneficiary exceed two thousand
dollars, the excess may be carried forward and deducted in future
taxable years until the contributions and purchases have been
fully deducted. (B) In computing Ohio adjusted gross income, a deduction
from federal adjusted gross income is allowed for: (1) Income related to tuition credits and contributions that as of the
end of the taxable year have not been refunded pursuant to the
termination of a tuition payment contract or variable college
savings program account under section 3334.10 of the Revised Code,
to the extent that such income is included in federal adjusted gross
income. (2) The excess of the total purchase price of tuition credits
refunded during the taxable year pursuant to the termination of a
tuition payment contract under section 3334.10 of the Revised Code
over the amount of the refund, to the extent the amount of the excess was
not deducted in determining federal adjusted gross income. division
(B)(2) of this section applies only to credits for which no
deduction was allowable under division (A) of this section. (C) In computing Ohio adjusted gross income, there shall
be added to federal adjusted gross income the amount of loss related to
tuition credits and contributions that as of the end of the taxable year
have not been refunded pursuant to the termination of a tuition
payment contract or variable college savings program account under
section 3334.10 of the Revised Code, to the extent that such loss
was deducted in determining federal adjusted gross income. (D) For taxable years in which distributions or refunds are made
under a tuition payment or variable college savings program contract for any
reason other than payment of tuition or other
higher education expenses, or the beneficiary's death, disability,
or receipt of a scholarship as described in section 3334.10 of the Revised Code: (1) If the distribution or refund is paid to the purchaser or contributor
or beneficiary, any portion of the distribution or refund not included in the
recipient's federal adjusted gross income shall be added to the recipient's
federal adjusted gross income in determining the recipient's
Ohio adjusted gross income, except that the amount added shall not
exceed amounts previously deducted under division (A) of this section
less any amounts added under division (D)(1) of this section in a
prior taxable year. (2) If amounts paid by a purchaser or contributor on or after
January 1, 2000, are distributed or refunded to someone other than
the purchaser or
contributor or beneficiary, the amount of the payment not included in the
recipient's federal adjusted gross income, less any amounts added under
division (D) of this section in a prior taxable year, shall be added
to the recipient's federal adjusted gross income in determining the
recipient's Ohio adjusted gross income. SECTION 2 . That existing sections 3334.01, 3334.02, 3334.08,
3334.10, 3334.11, 3334.12, 3334.15, 3366.01, 3366.03, 3366.04, and 5747.01 of
the Revised Code are
hereby repealed.
SECTION 3 . That section 5747.01 of the Revised Code, as amended by H.B. 471
of the 123rd General Assembly,
be amended to read as follows:
Sec. 5747.01. Except as otherwise expressly provided or
clearly appearing from the context, any term used in this chapter
has the same meaning as when used in a comparable context in the
Internal Revenue Code, and all other statutes of the United
States relating to federal income taxes. As used in this chapter: (A) "Adjusted gross income" or "Ohio adjusted gross
income" means adjusted gross income as defined and used in the
Internal Revenue Code, adjusted as provided in this section: (1) Add interest or dividends on obligations or securities
of any state or of any political subdivision or authority of any
state, other than this state and its subdivisions and authorities. (2) Add interest or dividends on obligations of any
authority, commission, instrumentality, territory, or possession
of the United States that are exempt from federal income taxes
but not from state income taxes. (3) Deduct interest or dividends on obligations of the
United States and its territories and possessions or of any
authority, commission, or instrumentality of the United States to
the extent included in federal adjusted gross income but exempt
from state income taxes under the laws of the United States. (4) Deduct disability and survivor's benefits to the
extent included in federal adjusted gross income. (5) Deduct benefits under Title II of the Social Security
Act and tier 1 railroad retirement benefits to the extent
included in federal adjusted gross income under section 86 of the
Internal Revenue Code. (6) Add, in the case of a taxpayer who is a beneficiary of
a trust that makes an accumulation distribution as defined in
section 665 of the Internal Revenue Code, the portion, if any, of
such distribution that does not exceed the undistributed net
income of the trust for the three taxable years preceding the
taxable year in which the distribution is made. "Undistributed
net income of a trust" means the taxable income of the trust
increased by (a)(i) the additions to adjusted gross income
required under division (A) of this section and (ii) the personal
exemptions allowed to the trust pursuant to section 642(b) of the
Internal Revenue Code, and decreased by (b)(i) the deductions to
adjusted gross income required under division (A) of this
section, (ii) the amount of federal income taxes attributable to
such income, and (iii) the amount of taxable income that has been
included in the adjusted gross income of a beneficiary by reason
of a prior accumulation distribution. Any undistributed net
income included in the adjusted gross income of a beneficiary
shall reduce the undistributed net income of the trust commencing
with the earliest years of the accumulation period. (7) Deduct the amount of wages and salaries, if any, not
otherwise allowable as a deduction but that would have been
allowable as a deduction in computing federal adjusted gross
income for the taxable year, had the targeted jobs credit allowed
and determined under sections 38, 51, and 52 of the Internal
Revenue Code not been in effect. (8) Deduct any interest or interest equivalent on public
obligations and purchase obligations to the extent included in
federal adjusted gross income. (9) Add any loss or deduct any gain resulting from the
sale, exchange, or other disposition of public obligations to the
extent included in federal adjusted gross income. (10) Regarding tuition credits purchased under Chapter 3334. of the
Revised
Code: (a) Deduct the following:
(i) For credits that as of the end of the taxable
year have not been refunded pursuant to the termination of a tuition payment
contract under section 3334.10 of the Revised
Code, the amount of income related to the
credits, to the extent included in federal adjusted gross income;
(ii) For credits that during the taxable year have
been refunded pursuant to the termination of a tuition payment contract under
section 3334.10 of the Revised Code, the excess of the total purchase price
of the tuition credits refunded over the amount of refund, to the extent the
amount of the excess was not deducted in determining federal adjusted
gross income.
(b) Add the following:
(i) For credits that as of the end of the taxable
year have not been refunded pursuant to the termination of a tuition payment
contract under section 3334.10 of the Revised Code, the amount of loss related
to the credits, to the extent the amount of the loss was deducted in
determining federal adjusted gross income;
(ii) For credits that during the taxable year have
been refunded pursuant to the termination of a tuition payment contract under
section 3334.10 of the Revised
Code, the excess of the amount of refund over
the purchase price of each tuition credit refunded, to the extent not included
in federal adjusted gross income
Deduct or add amounts, as provided under section 5747.70 of the
Revised
Code, related to contributions to variable college savings program
accounts made or tuition credits purchased pursuant to chapter
3334. of the Revised Code.
(11)(a) Deduct, to the extent not otherwise allowable as a deduction or
exclusion in computing federal or Ohio adjusted gross income for the taxable
year, the amount the taxpayer paid during the taxable year for medical care
insurance and qualified long-term care insurance for the taxpayer, the
taxpayer's spouse, and dependents. No deduction for medical care insurance
under division (A)(11) of this section shall be allowed either to any taxpayer
who is eligible to participate in any subsidized health plan maintained by any
employer of the taxpayer or of the taxpayer's spouse, or to any taxpayer who
is entitled to, or on
application would be entitled to, benefits under part A of Title
XVIII of the "Social Security Act," 49 Stat. 620 (1935), 42 U.S.C.
301, as amended. For the purposes of division (A)(11)(a) of this
section, "subsidized health plan" means a health plan for which
the employer pays any portion of the plan's cost. The deduction
allowed under division (A)(11)(a) of this section shall be the net
of any related premium refunds, related premium reimbursements, or
related insurance premium dividends received during the taxable
year. (b) Deduct, to the extent not otherwise deducted or excluded in
computing federal or Ohio adjusted gross income during the taxable
year, the amount the taxpayer paid during the taxable year, not
compensated for by any insurance or otherwise, for medical care of
the taxpayer, the taxpayer's spouse, and dependents, to the extent
the expenses exceed seven and one-half per cent of the taxpayer's
federal adjusted gross income. (c) For purposes of division (A)(11) of this section, "medical
care" has the meaning given in section 213 of the Internal Revenue
Code, subject to the special rules, limitations, and exclusions
set forth therein, and "qualified long-term care" has the same
meaning given in section 7702(B)(b) of the Internal Revenue Code. (12)(a) Deduct any amount included in federal adjusted gross
income solely because the amount represents a reimbursement or
refund of expenses that in any year the taxpayer had
deducted as an itemized deduction pursuant to section 63 of the
Internal Revenue Code and applicable United States
department of the treasury regulations.
The deduction otherwise allowed under
division (A)(12)(a) of this section shall be reduced to the extent
the reimbursement is attributable to an amount the taxpayer
deducted under this section in any taxable year. (b) Add any amount not otherwise included in Ohio adjusted gross
income for any taxable year to the extent that the amount is
attributable to the recovery during the taxable year of any amount
deducted or excluded in computing federal or Ohio adjusted gross
income in any taxable year. (13) Deduct any portion of the deduction described in
section 1341(a)(2) of the Internal Revenue Code, for repaying
previously reported income received under a claim of right, that
meets both of the following requirements: (a) It is allowable for repayment of an item that was
included in the taxpayer's adjusted gross income for a prior
taxable year and did not qualify for a credit under division (A)
or (B) of section 5747.05 of the Revised Code for that year; (b) It does not otherwise reduce the taxpayer's adjusted
gross income for the current or any other taxable year. (14) Deduct an amount equal to the deposits made to, and
net investment earnings of, a medical savings account during the taxable year,
in accordance with section 3924.66 of the Revised Code. The deduction
allowed by division (A)(14) of this section does not apply to medical
savings account deposits and earnings otherwise deducted or excluded for the
current or any other taxable year from the taxpayer's federal adjusted gross
income. (15)(a) Add an amount equal to the funds withdrawn from a medical
savings account during the taxable year, and the net investment earnings on
those funds, when the funds withdrawn were used for any purpose other than to
reimburse an account holder for, or to pay, eligible medical expenses, in
accordance with section 3924.66 of the Revised Code; (b) Add the amounts distributed from a medical savings account
under division (A)(2) of section 3924.68 of the Revised Code during the
taxable year. (16) Add any amount claimed as a credit under section 5747.059 of the Revised
Code to the extent that such amount satisfies either of the following: (a) The amount was deducted or excluded from the computation of the
taxpayer's federal adjusted gross income as required to be reported for the
taxpayer's taxable year under the Internal Revenue Code; (b) The amount resulted in a reduction of the taxpayer's federal adjusted
gross income as required to be reported for any of the taxpayer's taxable
years under the Internal Revenue Code. (17) Deduct the amount contributed by the taxpayer to an
individual development account program established by a county department of
job and family services pursuant to sections 329.11 to
329.14 of the Revised Code for
the purpose of matching funds deposited by program participants. On request
of
the tax commissioner, the taxpayer shall provide any information that, in the
tax commissioner's opinion, is necessary to establish the amount deducted
under
division (A)(17) of this section. (18) Beginning in taxable year 2001, if the taxpayer is married
and files a joint return and the
combined federal adjusted gross income of the taxpayer and the taxpayer's
spouse for the taxable year does not exceed one hundred thousand dollars, or
if the taxpayer is single and has a federal adjusted gross income for the
taxable
year not exceeding fifty thousand dollars, deduct amounts paid during the
taxable year for qualified tuition and fees paid to an eligible institution
for the taxpayer, the taxpayer's spouse, or any dependent of the taxpayer, who
is a resident of this state and is enrolled in or attending a program that
culminates in a degree or diploma at an eligible institution. The deduction
may be claimed only to the extent that qualified tuition and fees are not
otherwise deducted or excluded for any taxable year from federal or
Ohio adjusted gross income. The deduction
may not be claimed for educational expenses for which the taxpayer claims a
credit under section 5747.27 of the Revised Code. (19) Add any reimbursement received during the taxable year of any amount
the taxpayer deducted under division (A)(18) of this section in any
previous taxable year to the extent the amount is not otherwise included in
Ohio adjusted gross income. (B) "Business income" means income arising from
transactions, activities, and sources in the regular course of a
trade or business and includes income from tangible and
intangible property if the acquisition, rental, management, and
disposition of the property constitute integral parts of the
regular course of a trade or business operation. (C) "Nonbusiness income" means all income other than
business income and may include, but is not limited to,
compensation, rents and royalties from real or tangible personal
property, capital gains, interest, dividends and distributions,
patent or copyright royalties, or lottery winnings, prizes, and
awards. (D) "Compensation" means any form of remuneration paid to
an employee for personal services. (E) "Fiduciary" means a guardian, trustee, executor,
administrator, receiver, conservator, or any other person acting
in any fiduciary capacity for any individual, trust, or estate. (F) "Fiscal year" means an accounting period of twelve
months ending on the last day of any month other than December. (G) "Individual" means any natural person. (H) "Internal Revenue Code" means the "Internal Revenue
Code of 1986," 100 Stat. 2085, 26 U.S.C.A. 1, as amended. (I) "Resident" means: (1) An individual who is domiciled in this state, subject
to section 5747.24 of the Revised Code; (2) The estate of a decedent who at the time of death
was domiciled in this state. The domicile tests of section
5747.24 of the Revised Code and any election under section
5747.25 of the Revised Code are not controlling for purposes of
division (I)(2) of this section. (J) "Nonresident" means an individual or estate that is
not a resident. An individual who is a resident for only part of
a taxable year is a nonresident for the remainder of that taxable
year. (K) "Pass-through entity" has the same meaning as in section 5733.04 of the
Revised Code. (L) "Return" means the notifications and reports required
to be filed pursuant to this chapter for the purpose of reporting
the tax due and includes declarations of estimated tax when so
required. (M) "Taxable year" means the calendar year or the
taxpayer's fiscal year ending during the calendar year, or
fractional part thereof, upon which the adjusted gross income is
calculated pursuant to this chapter. (N) "Taxpayer" means any person subject to the tax imposed
by section 5747.02 of the Revised Code or any pass-through entity that
makes the election under division (D) of section 5747.08 of the Revised Code. (O) "Dependents" means dependents as defined in the
Internal Revenue Code and as claimed in the taxpayer's federal
income tax return for the taxable year or which the taxpayer
would have been permitted to claim had the taxpayer filed a
federal income
tax return. (P) "Principal county of employment" means, in the case of
a nonresident, the county within the state in which a taxpayer
performs services for an employer or, if those services are
performed in more than one county, the county in which the major
portion of the services are performed. (Q) As used in sections 5747.50 to 5747.55 of the Revised Code: (1) "Subdivision" means any county, municipal corporation,
park district, or township. (2) "Essential local government purposes" includes all
functions that any subdivision is required by general law to
exercise, including like functions that are exercised under a
charter adopted pursuant to the Ohio Constitution. (R) "Overpayment" means any amount already paid that
exceeds the figure determined to be the correct amount of the
tax. (S) "Taxable income" applies to estates only and means
taxable income as defined and used in the Internal Revenue Code
adjusted as follows: (1) Add interest or dividends on obligations or securities
of any state or of any political subdivision or authority of any
state, other than this state and its subdivisions and
authorities; (2) Add interest or dividends on obligations of any
authority, commission, instrumentality, territory, or possession
of the United States that are exempt from federal income taxes
but not from state income taxes; (3) Add the amount of personal exemption allowed to the
estate pursuant to section 642(b) of the Internal Revenue Code; (4) Deduct interest or dividends on obligations of the
United States and its territories and possessions or of any
authority, commission, or instrumentality of the United States
that are exempt from state taxes under the laws of the United
States; (5) Deduct the amount of wages and salaries, if any, not
otherwise allowable as a deduction but that would have been
allowable as a deduction in computing federal taxable income for
the taxable year, had the targeted jobs credit allowed under
sections 38, 51, and 52 of the Internal Revenue Code not been in
effect; (6) Deduct any interest or interest equivalent on public
obligations and purchase obligations to the extent included in
federal taxable income; (7) Add any loss or deduct any gain resulting from sale,
exchange, or other disposition of public obligations to the
extent included in federal taxable income; (8) Except in the case of the final return of an estate,
add any amount deducted by the taxpayer on both its Ohio estate
tax return pursuant to section 5731.14 of the Revised Code, and
on its federal income tax return in determining either federal
adjusted gross income or federal taxable income; (9)(a) Deduct any amount included in federal taxable income
solely because the amount represents a reimbursement or refund of
expenses that in a previous year the decedent had deducted as an
itemized deduction pursuant to section 63 of the Internal Revenue
Code and applicable treasury regulations.
The deduction otherwise
allowed under division (S)(9)(a) of this section shall be reduced
to the extent the reimbursement is attributable to an amount the
taxpayer or decedent deducted under this section in any taxable
year. (b) Add any amount not otherwise included in Ohio taxable income
for any taxable year to the extent that the amount is attributable
to the recovery during the taxable year of any amount deducted or
excluded in computing federal or Ohio taxable income in any
taxable year. (10) Deduct any portion of the deduction described in
section 1341(a)(2) of the Internal Revenue Code, for repaying
previously reported income received under a claim of right, that
meets both of the following requirements: (a) It is allowable for repayment of an item that was
included in the taxpayer's taxable income or the decedent's
adjusted gross income for a prior taxable year and did not
qualify for a credit under division (A) or (B) of section 5747.05
of the Revised Code for that year. (b) It does not otherwise reduce the taxpayer's taxable
income or the decedent's adjusted gross income for the current or
any other taxable year. (11) Add any amount claimed as a credit under section 5747.059
of the Revised Code to the extent that the amount satisfies
either of the following: (a) The amount was deducted or excluded from the computation of the
taxpayer's federal taxable income as required to be reported for the
taxpayer's taxable year under the Internal Revenue Code; (b) The amount resulted in a reduction in the taxpayer's federal taxable
income as required to be reported for any of the taxpayer's taxable years
under the Internal Revenue Code. (T) "School district income" and "school district income
tax" have the same meanings as in section 5748.01 of the Revised
Code. (U) As used in divisions (A)(8), (A)(9), (S)(6), and
(S)(7) of this section, "public obligations," "purchase
obligations," and "interest or interest equivalent" have the same
meanings as in section 5709.76 of the Revised Code. (V) "Limited liability company" means any limited
liability company formed under Chapter 1705. of the Revised Code
or under the laws of any other state. (W) "Pass-through entity investor" means any person who, during any portion
of a taxable year of a pass-through entity, is a partner, member, shareholder,
or investor in that pass-through entity. (X) "Banking day" has the same meaning as in section 1304.01 of the Revised
Code. (Y) "Month" means a calendar month. (Z) "Quarter" means the first three months, the second three months, the
third three months, or the last three months of the taxpayer's taxable year. (AA)(1) "Eligible institution" means a state university or state
institution of higher education as defined in section 3345.011 of the Revised Code, or a
private, nonprofit college, university, or other post-secondary institution
located in this state that possesses a certificate of authorization issued by
the Ohio board of regents pursuant to Chapter 1713. of the Revised Code or a
certificate of registration issued by the state board of proprietary school
registration under Chapter 3332. of the Revised Code. (2) "Qualified tuition and fees" means tuition and fees imposed by an
eligible institution as a condition of enrollment or attendance, not exceeding
two thousand five hundred dollars in each of the individual's first two years
of post-secondary education. If the individual is a part-time student,
"qualified tuition and fees" includes tuition and fees paid for the academic
equivalent of the first two years of post-secondary education during a maximum
of five taxable years, not exceeding a total of five thousand dollars.
"Qualified tuition and fees" does not include: (a) Expenses for any course or activity involving sports, games,
or hobbies unless the course or activity is part of the individual's degree or
diploma program; (b) The cost of books, room and board, student activity fees,
athletic fees, insurance expenses, or other expenses unrelated to the
individual's academic course of instruction; (c) Tuition, fees, or other expenses paid or reimbursed through
an employer, scholarship, grant in aid, or other educational benefit program. (BB) Any term used in this chapter that is not otherwise defined in
this section and that is not used in a comparable context in the
Internal Revenue Code and other statutes of the
United States relating to federal income taxes has the same
meaning as in section 5733.40 of the Revised Code. SECTION 4 . That all existing versions of section 5747.01 of the
Revised Code are hereby repealed.
SECTION 5 . Sections 3 and 4 of this act shall take effect July
1, 2000. SECTION 6 . Section 5747.01 of the Revised Code, as amended by this act, and
section 5747.70 of the Revised Code, as enacted by this act, apply to tax
years beginning on and after January 1, 2000.
SECTION 7 . Section 5747.01 of the Revised Code is presented in Section 1 of
this act
as a composite of the section as amended by both
Am. Sub. H.B. 4 and Am. Sub. H.B. 282 of the 123rd General Assembly,
with the new language of neither of the acts shown in capital letters.
This is in recognition of the principle stated in division (B) of section
1.52 of the Revised Code that such amendments are to be
harmonized where not substantively irreconcilable and constitutes
a legislative finding that such is the resulting version in
effect prior to the effective date of this act.
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