130th Ohio General Assembly
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(123rd General Assembly)
(Amended Senate Bill Number 206)



AN ACT
To provide for the implementation of Sections 2n and 17 of Article VIII of the Constitution of the State of Ohio, to make an appropriation, and to declare an emergency.

Be it enacted by the General Assembly of the State of Ohio:

SECTION 1 .  (A) As used in this section and in the applicable bond proceedings unless otherwise provided:

(1) "Bond proceedings" means the orders, resolutions, agreements, and credit enhancement facilities, and amendments and supplements to them, or any one or more or combination of them, authorizing, awarding, or providing for the terms and conditions applicable to or providing for the security or liquidity of, obligations, and the provisions contained in those obligations.

(2) "Bond service fund" means the fund created by division (P) of this section, and any accounts in that fund, including all moneys and investments, and earnings from investments, credited and to be credited to that fund and accounts as and to the extent provided in the bond proceedings.

(3) "Capital facilities" means capital facilities that are capital facilities for a system of common schools throughout the state.

(4) "Costs of capital facilities" means the costs of acquiring, constructing, reconstructing, rehabilitating, remodeling, renovating, enlarging, improving, equipping, or furnishing capital facilities, and of the financing of those costs. Costs of capital facilities include without limitation the cost of clearance and preparation of the site and of any land to be used in connection with capital facilities, the cost of any indemnity and surety bonds and premiums on insurance, all related direct administrative expenses and allocable portions of direct costs of the state and the using school district and the Ohio School Facilities Commission, costs of engineering and architectural services, designs, plans, specifications, surveys, and estimates of cost, financing costs, interest on obligations from their date to the time when interest is to be paid from sources other than proceeds of obligations, amounts necessary to establish any reserves as required by the bond proceedings, the reimbursement of all moneys advanced or applied by or borrowed from the using school district or any governmental agency for the payment of any item of costs of capital facilities, and all other expenses necessary or incident to planning or determining feasibility or practicability with respect to capital facilities, and such other expenses as may be necessary or incident to the acquisition, construction, reconstruction, rehabilitation, remodeling, renovation, enlargement, improvement, equipment, and furnishing of capital facilities, the financing of those costs, and the placing of the capital facilities in use and operation, including any one, part of, or combination of those classes of costs and expenses.

(5) "Credit enhancement facilities," "financing costs," and "interest" or "interest equivalent" have the same meanings as in section 133.01 of the Revised Code.

(6) "Debt service" means principal, including any mandatory sinking fund or redemption requirements for retirement of obligations, interest and other accreted amounts, interest equivalent, and any redemption premium, payable on obligations.

(7) "Issuing authority" means the Treasurer of State.

(8) "Net proceeds" means amounts received from the sale of obligations, excluding: amounts used to refund or retire outstanding obligations, amounts required to be deposited into special funds pursuant to the applicable bond proceedings, and amounts to be used to pay financing costs.

(9) "Net state lottery proceeds" means the amount determined by the Director of Budget and Management to be an excess amount to the credit of the State Lottery Fund and to be transferred to the Lottery Profits Education Fund, and moneys from time to time in the Lottery Profits Education Fund, all as provided for and referred to in section 3770.06 of the Revised Code.

(10) "Obligations" means bonds, notes, or other evidences of obligation of the state, including any appertaining interest coupons, issued pursuant to this section.

(11) "Ohio School Facilities Commission" and "school district" have the same meanings as in section 3318.01 of the Revised Code.

(12) "Principal amount" means the aggregate of the amount as stated or provided for in the applicable bond proceedings as the amount on which interest or interest equivalent on particular obligations is initially calculated. Principal amount does not include any premium paid to the state by the initial purchaser of the obligations.

(13) "Special funds" or "funds," unless the context indicates otherwise, means the bond service fund, and any other funds, including any reserve funds, created under the bond proceedings and stated to be special funds in those proceedings, including moneys and investments, and earnings from investments, credited and to be credited to the particular fund. Special funds do not include the School Building Program Assistance Fund created by section 3318.25 of the Revised Code, or other funds created by the bond proceedings that are not stated by those proceedings to be special funds.

(14) "Using school district" means the school district, or two or more school districts acting jointly, that are the ultimate users of the capital facilities financed with net proceeds.

(B) Subject to Sections 2n and 17 of Article VIII of the Ohio Constitution, the state, by the issuing authority, is authorized to issue and sell, as provided in this section and in an aggregate principal amount not to exceed one hundred fifty million dollars, general obligations of this state for the purpose of paying costs of capital facilities.

(C) Each issue of obligations shall be authorized by resolution or order of the issuing authority. The bond proceedings shall provide for or authorize the manner for determining the principal amount or maximum principal amount of obligations of an issue, the principal maturity or maturities, the interest rate or rates, the date of and the dates of payment of interest on the obligations, their denominations, and the place or places of payment of debt service which may be within or outside the state. The latest principal maturity may not be later than the earlier of the thirty-first day of December of the twenty-fifth calendar year after the year of issuance of the particular obligations or of the twenty-fifth calendar year after the year in which the original obligation to pay was issued or entered into. Sections 9.96, 9.98, 9.981, 9.982, and 9.983 of the Revised Code apply to obligations. The purpose of the obligations may be stated in the bond proceedings in general terms, such as "paying costs of capital facilities for a system of common schools throughout the state as authorized by Section 2n of Article VIII of the Ohio Constitution."

(D) Net proceeds of obligations shall be deposited into the School Building Program Assistance Fund created by section 3318.25 of the Revised Code.

(E) The issuing authority may appoint or provide for the appointment of paying agents, bond registrars, securities depositories, clearing corporations, and transfer agents, and may retain the services of financial advisers and accounting experts, 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 in the judgment of the issuing authority to carry out this section. Financing costs are payable, as may be provided in the bond proceedings, from the proceeds of the obligations, from special funds, or from other moneys available for the purpose.

(F) The bond proceedings may contain additional provisions customary or appropriate to the financing or to the obligations or to particular obligations including, but not limited to, provisions for:

(1) The redemption of obligations prior to maturity at the option of the state or of the holder or upon the occurrence of certain conditions, and at a particular price or prices and under particular terms and conditions;

(2) The form of and other terms of the obligations;

(3) The establishment, deposit, investment, and application of special funds, and the safeguarding of moneys on hand or on deposit, in lieu of the applicability of provisions of Chapter 131. or 135. of the Revised Code, but subject to any special provisions of this section with respect to the application of particular funds or moneys. Any financial institution that acts as a depository of any moneys in special funds or other funds under the bond proceedings may furnish indemnifying bonds or pledge securities as required by the issuing authority.

(4) Any or every provision of the bond proceedings being binding upon the issuing authority and upon such using school district, state agency, or government entity, officer, board, commission, authority, agency, department, or other person or body as may from time to time be authorized to take actions as may be necessary to perform all or any part of the duty required by the provision;

(5) The maintenance of each pledge or instrument comprising part of the bond proceedings until the state has fully paid or provided for the payment of the debt service on the obligations or met other stated conditions;

(6) In the event of default in any payments required to be made by the bond proceedings, or by any other agreement of the issuing authority made as part of a contract under which the obligations were issued or secured, including a credit enhancement facility, the enforcement of those payments by mandamus, suit in equity, action at law, or any combination of those remedial actions;

(7) The rights and remedies of the holders or owners of obligations or of book-entry interests in them, and of third parties under any credit enhancement facility, and provisions for protecting and enforcing those rights and remedies, including limitations on rights of individual holders or owners;

(8) The replacement of mutilated, destroyed, lost, or stolen obligations;

(9) The funding, refunding, or advance refunding, or other provision for payment, of obligations that will then no longer be outstanding for purposes of this section or of the applicable bond proceedings;

(10) Amendment of the bond proceedings;

(11) Any other or additional agreements with the owners of obligations, and such other provisions as the issuing authority determines, including limitations, conditions, or qualifications, relating to any of the foregoing.

(G) The Great Seal of the State or a facsimile of it may be affixed to or printed on the obligations. The obligations requiring execution by or for the issuing authority shall be signed as provided in the bond proceedings. Any obligations may be signed by the individual who on the date of execution is the authorized signer although on the date of these obligations that individual is not an authorized signer. In case the individual whose signature or facsimile signature appears on any obligation ceases to be an authorized signer before delivery of the obligation, that signature or facsimile is nevertheless valid and sufficient for all purposes as if that individual had remained the authorized signer until delivery.

(H) Obligations are investment securities under Chapter 1308. of the Revised Code. Obligations may be issued in bearer or in registered form, registrable as to principal alone or as to both principal and interest, or both, or in certificated or uncertificated form, as the issuing authority determines. Provision may be made for the exchange, conversion, or transfer of obligations and for reasonable charges for registration, exchange, conversion, and transfer. Pending preparation of final or definitive obligations, the issuing authority may provide for the issuance of temporary or interim instruments to be exchanged for the final or definitive obligations.

(I) Obligations may be sold at public sale or at private sale, and at such price at, above, or below par, all as provided by the issuing authority in the bond proceedings.

(J) Except to the extent that rights are restricted by the bond proceedings, any owner of obligations may by any suitable form of legal proceedings protect and enforce any rights relating to obligations under the laws of this state or granted by the bond proceedings. Those rights include the right to compel the performance of all applicable duties of the issuing authority and the state. Each duty of the issuing authority and that authority's officials, staff, and employees, and of each state agency or using school district and its officers, members, staff, or employees, undertaken pursuant to the bond proceedings, is hereby established as a duty of the entity or individual having authority to perform that duty, specifically enjoined by law and resulting from an office, trust, or station within the meaning of section 2731.01 of the Revised Code. The individuals who are from time to time the issuing authority, or the issuing authority's officials, staff, or employees, are not liable in their personal capacities on any obligations or otherwise under the bond proceedings.

(K)(1) Subject to Sections 2n and 17 of Article VIII of the Ohio Constitution and this section, the issuing authority may, in addition to the authority provided in division (B) of this section, authorize and provide for the issuance of obligations in the form of bond anticipation notes, and may provide for the renewal of those notes from time to time by the issuance of new notes. The holders of notes or appertaining interest coupons have the right to have debt service on those notes paid solely from the moneys and special funds that are or may be pledged to that payment, including the proceeds of bonds or renewal notes or both, as the issuing authority provides in the bond proceedings authorizing the notes. Notes may be additionally secured by covenants of the issuing authority to the effect that the issuing authority and the state will do all things necessary for the issuance of bonds or renewal notes in such principal amount and upon such terms as may be necessary to provide moneys to pay when due the debt service on the notes, and apply their proceeds to the extent necessary, to make full and timely payment of debt service on the notes as provided in the applicable bond proceedings.

In the bond proceedings authorizing the issuance of bond anticipation notes the issuing authority shall set forth for the bonds anticipated an estimated schedule of annual principal payments the latest of which shall be no later than provided in division (C) of this section. While the notes are outstanding there shall be deposited, as shall be provided in the bond proceedings for those notes, from the sources authorized for payment of debt service on the bonds, amounts sufficient to pay the principal of the bonds anticipated as set forth in that estimated schedule during the time the notes are outstanding, which amounts shall be used solely to pay the principal of those notes or of the bonds anticipated.

(2) Except as otherwise provided in this section, bonds or notes authorized pursuant to division (K) of this section are subject to the provisions of this section pertaining to obligations generally.

(3) The principal amount of refunding or renewal obligations issued pursuant to division (K) of this section shall be in addition to the amount authorized by the General Assembly as referred to in division (B) of this section, to the extent that the principal amount of those obligations does not exceed the then outstanding principal amount of the obligations they are to refund, renew, or retire.

(L) Obligations are lawful investments for banks, savings and loan associations, credit union share guaranty 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 political subdivisions and taxing districts of this state, the Sinking Fund, 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 state agency with respect to investments by them, and are also acceptable as security for the repayment of the deposit of public moneys.

(M) Unless otherwise provided or provided for in any applicable bond proceedings, moneys to the credit of or in a special fund shall be disbursed on the order of the issuing authority. No such order is required for the payment, from the bond service fund or other special fund, when due of debt service or required payments under credit enhancement facilities.

(N) The full faith and credit, revenue, including net state lottery proceeds, and taxing power of the state are and shall be pledged to the timely payment of debt service on outstanding obligations as it comes due, all in accordance with Section 2n of Article VIII of the Ohio Constitution and this section. Moneys referred to in Section 5a of Article XII of the Ohio Constitution may not be pledged or used for the payment of debt service. The state covenants, and that covenant shall be controlling notwithstanding any other provision of law, that the state and the applicable officers and agencies of the state, including the General Assembly, shall, so long as any obligations are outstanding in accordance with their terms, maintain statutory authority for and cause to be levied, collected, and applied sufficient pledged excises, taxes, and revenues of the state so that those excises, taxes, and revenues shall be sufficient in amounts to pay debt service when due, to establish and maintain any reserves and other requirements, and to pay financing costs, including costs of or relating to credit enhancement facilities, all as provided for in the bond proceedings.

Those excises, taxes, and revenues are and shall be deemed to be levied and collected, in addition to the purposes otherwise provided for by law, to provide for the payment of debt service and financing costs in accordance with this section and the bond proceedings.

Notwithstanding division (B) of section 3770.06 of the Revised Code, whenever, in the judgment of the Director of Budget and Management, an amount of net state lottery proceeds is necessary to be applied to the payment of debt service on obligations, the Director shall transfer that amount directly from the State Lottery Fund or from the Lottery Profits Education Fund to the bond service fund. The provisions of this paragraph are subject to any prior pledges or obligation of those amounts to the payment of bond service charges as defined in division (C) of section 3318.21 of the Revised Code, as referred to in division (B) of section 3770.06 of the Revised Code.

(O) The General Assembly has the same authority with regard to obligations issued under this section and revenues pledged to those obligations as it has under division (E) of section 164.11 of the Revised Code with regard to obligations issued under Chapter 164. of the Revised Code.

(P) There is hereby created in the state treasury the Common Schools Capital Facilities Bond Service Fund. All moneys received by the state and required by the bond proceedings, consistent with this section, to be deposited, transferred, or credited to the bond service fund, and all other moneys transferred or allocated to or received for the purposes of that fund, shall be deposited and credited to the bond service fund, subject to any applicable provisions of the bond proceedings but without necessity for any act of appropriation. During the period beginning with the date of the first issuance of obligations and continuing during the time that any obligations are outstanding in accordance with their terms, so long as moneys in the bond service fund are insufficient to pay debt service when due on those obligations payable from that fund (except the principal amounts of bond anticipation notes payable from the proceeds of renewal notes or bonds anticipated) and due in the particular fiscal year, a sufficient amount of moneys of the state are committed and, without necessity for further act of appropriation, shall be paid to the bond service fund for the purpose of paying that debt service when due. For the purpose of this section, and if so provided in the applicable bond proceedings, debt service includes costs relating to credit enhancement facilities that represent payment of debt service.

The bond service fund is a trust fund and is hereby pledged to the payment of debt service. Payment of that debt service shall be made or provided for by the issuing authority in accordance with the bond proceedings without necessity for any act of appropriation.

(Q) The bond proceedings may provide for the establishment of separate accounts in the bond service fund and for the application of those accounts only to debt service on specific obligations, and for other accounts in the bond service fund within the general purposes of that fund.

(R) Subject to the bond proceedings pertaining to any obligations then outstanding in accordance with their terms, the issuing authority may in the bond proceedings pledge all, or such portion as the issuing authority determines, of the moneys in the bond service fund to the payment of debt service on particular obligations, and for the establishment and maintenance of any reserves for payment of particular debt service.

(S) On or before the fifteenth day of July of each fiscal year, the issuing authority shall certify to the Office of Budget and Management the total amount of moneys required, and sources of that money, during that fiscal year to meet in full all debt service and financing costs. If and so long as the moneys to the credit of the bond service fund, together with any other moneys available for the purpose, are insufficient to meet in full all payments when due of the amount required as stated in that certificate or otherwise, the Office of Budget and Management shall at the times as provided in the bond proceedings transfer a sufficient amount to the bond service fund from the moneys derived from all excises, taxes, and other revenues of the state, including net state lottery proceeds, referred to in division (N) of this section.

(T) Obligations issued under this section, their transfer, and the interest, interest equivalent, and other income or accreted amounts on them, including any profit made on their sale, exchange, or other disposition, shall at all times be free from taxation within this state.

SECTION 2 .  (A) As used in this section, and in the applicable bond proceedings unless otherwise provided:

(1) "Bond proceedings" means the resolutions, agreements, and credit enhancement facilities, and amendments and supplements to them, or any one or more or combination of them, authorizing, awarding, or providing for the terms and conditions applicable to or providing for the security or liquidity of, obligations, and the provisions contained in those obligations.

(2) "Bond service fund" means the fund created by division (P) of this section, and any accounts in that fund, including all moneys and investments, and earnings from investments, credited and to be credited to that fund and accounts as and to the extent provided in the bond proceedings.

(3) "Capital facilities" means capital facilities that are capital facilities for state-supported and state-assisted institutions of higher education.

(4) "Costs of capital facilities" means the costs of acquiring, constructing, reconstructing, rehabilitating, remodeling, renovating, enlarging, improving, equipping, or furnishing capital facilities, and of the financing of those costs. Costs of capital facilities include without limitation the cost of clearance and preparation of the site and of any land to be used in connection with capital facilities, the cost of any indemnity and surety bonds and premiums on insurance, all related direct administrative expenses and allocable portions of direct costs of the state and the using institution, costs of engineering and architectural services, designs, plans, specifications, surveys, and estimates of cost, financing costs, interest on obligations from their date to the time when interest is to be paid from sources other than proceeds of obligations, amounts necessary to establish any reserves as required by the bond proceedings, the reimbursement of all moneys advanced or applied by or borrowed from the using institution or any governmental agency for the payment of any item of costs of capital facilities, and all other expenses necessary or incident to planning or determining feasibility or practicability with respect to capital facilities, and such other expenses as may be necessary or incident to the acquisition, construction, reconstruction, rehabilitation, remodeling, renovation, enlargement, improvement, equipment, and furnishing of capital facilities, the financing of those costs, and the placing of the capital facilities in use and operation, including any one, part of, or combination of those classes of costs and expenses.

(5) "Credit enhancement facilities," "financing costs," and "interest" or "interest equivalent" have the same meanings as in section 133.01 of the Revised Code.

(6) "Debt service" means principal, including any mandatory sinking fund or redemption requirements for retirement of obligations, interest and other accreted amounts, interest equivalent, and any redemption premium, payable on obligations.

(7) "Issuing authority" means the Ohio Public Facilities Commission established in section 154.03 of the Revised Code.

(8) "Net proceeds" means amounts received from the sale of obligations, excluding: amounts used to refund or retire outstanding obligations, amounts required to be deposited into special funds pursuant to the applicable bond proceedings, and amounts to be used to pay financing costs.

(9) "Obligations" means bonds, notes, or other evidences of obligation of the state, including any appertaining interest coupons, issued pursuant to this section.

(10) "Principal amount" means the aggregate of the amount as stated or provided for in the applicable bond proceedings as the amount on which interest or interest equivalent on particular obligations is initially calculated. Principal amount does not include any premium paid to the state by the initial purchaser of the obligations.

(11) "Special funds" or "funds," unless the context indicates otherwise, means the bond service fund, and any other funds, including any reserve funds, created under the bond proceedings and stated to be special funds in those proceedings, including moneys and investments, and earnings from investments, credited and to be credited to the particular fund. Special funds do not include the Higher Education Improvement Fund created by division (F) of section 154.21 of the Revised Code, or other funds created by the bond proceedings that are not stated by those proceedings to be special funds.

(12) "State-supported or state-assisted institutions of higher education" means a state university or college, or community college district, technical college district, university branch district, or state community college, or two or more institutions acting jointly, that are the ultimate users of the capital facilities financed with net proceeds. "State university or college" means each of the state universities identified in section 3345.011 of the Revised Code, the Northeastern Ohio Universities College of Medicine, and the Medical College of Ohio at Toledo.

(B) Subject to Sections 2n and 17 of Article VIII of the Ohio Constitution, the state, by the issuing authority, is authorized to issue and sell, as provided in this section and in an aggregate principal amount or not to exceed one hundred fifty million dollars, general obligations of this state for the purpose of paying costs of capital facilities.

(C) Each issue of obligations shall be authorized by resolution of the issuing authority. The bond proceedings shall provide for or authorize the manner for determining the principal amount or maximum principal amount of obligations of an issue, the principal maturity or maturities, the interest rate or rates, the date of and the dates of payment of interest on the obligations, their denominations, and the place or places of payment of debt service which may be within or outside the state. The latest principal maturity may not be later than the earlier of the thirty-first day of December of the twenty-fifth calendar year after the year of issuance of the particular obligations or of the twenty-fifth calendar year after the year in which the original obligation to pay was issued or entered into. Sections 9.96, 9.98, 9.981, 9.982, and 9.983 of the Revised Code apply to obligations. The purpose of the obligations may be stated in the bond proceedings in general terms, such as "paying costs of capital facilities for state-supported or state-assisted institutions of higher education as authorized by Section 2n of Article VIII of the Ohio Constitution."

(D) Net proceeds of obligations shall be deposited into the Higher Education Improvement Fund created by division (F) of section 154.21 of the Revised Code.

(E) The issuing authority may appoint or provide for the appointment of paying agents, bond registrars, securities depositories, clearing corporations, and transfer agents, and may retain the services of financial advisers and accounting experts, 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 in the judgment of the issuing authority to carry out this section. Financing costs are payable, as may be provided in the bond proceedings, from the proceeds of the obligations, from special funds, or from other moneys available for the purpose.

(F) The bond proceedings may contain additional provisions customary or appropriate to the financing or to the obligations or to particular obligations including, but not limited to, provisions for:

(1) The redemption of obligations prior to maturity at the option of the state or of the holder or upon the occurrence of certain conditions, and at a particular price or prices and under particular terms and conditions;

(2) The form of and other terms of the obligations;

(3) The establishment, deposit, investment, and application of special funds, and the safeguarding of moneys on hand or on deposit, in lieu of the applicability of provisions of Chapter 131. or 135. of the Revised Code, but subject to any special provisions of this section with respect to the application of particular funds or moneys. Any financial institution that acts as a depository of any moneys in special funds or other funds under the bond proceedings may furnish indemnifying bonds or pledge securities as required by the issuing authority.

(4) Any or every provision of the bond proceedings being binding upon the issuing authority and upon such using institution, state agency, or government entity, officer, board, commission, authority, agency, department, or other person or body as may from time to time be authorized to take actions as may be necessary to perform all or any part of the duty required by the provision;

(5) The maintenance of each pledge or instrument comprising part of the bond proceedings until the state has fully paid or provided for the payment of the debt service on the obligations or met other stated conditions;

(6) In the event of default in any payments required to be made by the bond proceedings, or by any other agreement of the issuing authority made as part of a contract under which the obligations were issued or secured, including a credit enhancement facility, the enforcement of those payments by mandamus, suit in equity, action at law, or any combination of those remedial actions;

(7) The rights and remedies of the holders or owners of obligations or of book-entry interests in them, and of third parties under any credit enhancement facility, and provisions for protecting and enforcing those rights and remedies, including limitations on rights of individual holders or owners;

(8) The replacement of mutilated, destroyed, lost, or stolen obligations;

(9) The funding, refunding, or advance refunding, or other provision for payment, of obligations that will then no longer be outstanding for purposes of this section or of the applicable bond proceedings;

(10) Amendment of the bond proceedings;

(11) Any other or additional agreements with the owners of obligations, and such other provisions as the issuing authority determines, including limitations, conditions, or qualifications, relating to any of the foregoing.

(G) The Great Seal of the State or a facsimile of it may be affixed to or printed on the obligations. The obligations requiring execution for the issuing authority shall be signed as provided in the bond proceedings. Any obligations may be signed by the individual who on the date of execution is the authorized signer although on the date of these obligations that individual is not an authorized signer. In case the individual whose signature or facsimile signature appears on any obligation ceases to be an authorized signer before delivery of the obligation, that signature or facsimile is nevertheless valid and sufficient for all purposes as if that individual had remained the authorized signer until delivery.

(H) Obligations are investment securities under Chapter 1308. of the Revised Code. Obligations may be issued in bearer or in registered form, registrable as to principal alone or as to both principal and interest, or both, or in certificated or uncertificated form, as the issuing authority determines. Provision may be made for the exchange, conversion, or transfer of obligations and for reasonable charges for registration, exchange, conversion, and transfer. Pending preparation of final or definitive obligations, the issuing authority may provide for the issuance of temporary or interim instruments to be exchanged for the final or definitive obligations.

(I) Obligations may be sold at public sale or at private sale, and at such price at, above, or below par, all as provided by the issuing authority in the bond proceedings.

(J) Except to the extent that rights are restricted by the bond proceedings, any owner of obligations may by any suitable form of legal proceedings protect and enforce any rights relating to obligations under the laws of this state or granted by the bond proceedings. Those rights include the right to compel the performance of all applicable duties of the issuing authority and the state. Each duty of the issuing authority and its members, officers, staff, and employees, and of each state agency or using institution and its officers, members, staff, or employees, undertaken pursuant to the bond proceedings, is hereby established as a duty of the entity or individual having authority to perform that duty, specifically enjoined by law and resulting from an office, trust, or station within the meaning of section 2731.01 of the Revised Code. The individuals who are from time to time the members of the issuing authority, or designees of those members pursuant to section 154.04 of the Revised Code, or its officers, staff, or employees, are not liable in their personal capacities on any obligations or otherwise under the bond proceedings.

(K)(1) Subject to Sections 2n and 17 of Article VIII of the Ohio Constitution and this section, the issuing authority may, in addition to the authority provided in division (B) of this section, authorize and provide for the issuance of obligations in the form of bond anticipation notes, and may provide for the renewal of those notes from time to time by the issuance of new notes. The holders of notes or appertaining interest coupons have the right to have debt service on those notes paid solely from the moneys and special funds that are or may be pledged to that payment, including the proceeds of bonds or renewal notes or both, as the issuing authority provides in the bond proceedings authorizing the notes. Notes may be additionally secured by covenants of the issuing authority to the effect that the issuing authority and the state will do all things necessary for the issuance of bonds or renewal notes in such principal amount and upon such terms as may be necessary to provide moneys to pay when due the debt service on the notes, and apply their proceeds to the extent necessary, to make full and timely payment of debt service on the notes as provided in the applicable bond proceedings.

In the bond proceedings authorizing the issuance of bond anticipation notes the issuing authority shall set forth for the bonds anticipated an estimated schedule of annual principal payments the latest of which shall be no later than provided in division (C) of this section. While the notes are outstanding there shall be deposited, as shall be provided in the bond proceedings for those notes, from the sources authorized for payment of debt service on the bonds, amounts sufficient to pay the principal of the bonds anticipated as set forth in that estimated schedule during the time the notes are outstanding, which amounts shall be used solely to pay the principal of those notes or of the bonds anticipated.

(2) Except as otherwise provided in this section, bonds or notes authorized pursuant to division (K) of this section are subject to the provisions of this section pertaining to obligations generally.

(3) The principal amount of refunding or renewal obligations issued pursuant to division (K) of this section shall be in addition to the amount authorized by the General Assembly as referred to in division (B) of this section, to the extent that the principal amount of those obligations does not exceed the then outstanding principal amount of the obligations they are to refund, renew, or retire.

(L) Obligations are lawful investments for banks, savings and loan associations, credit union share guaranty 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 political subdivisions and taxing districts of this state, the Sinking Fund, 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 state agency with respect to investments by them, and are also acceptable as security for the repayment of the deposit of public moneys.

(M) Unless otherwise provided or provided for in any applicable bond proceedings, moneys to the credit of or in a special fund shall be disbursed on the order of the issuing authority. No such order is required for the payment, from the bond service fund or other special fund, when due of debt service or required payments under credit enhancement facilities.

(N) The full faith and credit, revenue, and taxing power of the state are and shall be pledged to the timely payment of debt service on outstanding obligations as it comes due, all in accordance with Section 2n of Article VIII of the Ohio Constitution and this section. Moneys referred to in Section 5a of Article XII of the Ohio Constitution, and net state lottery proceeds, may not be pledged or used for the payment of debt service. The state covenants, and that covenant shall be controlling notwithstanding any other provision of law, that the state and the applicable officers and agencies of the state, including the General Assembly, shall, so long as any obligations are outstanding in accordance with their terms, maintain statutory authority for and cause to be levied, collected, and applied sufficient pledged excises, taxes, and revenues of the state so that those excises, taxes, and revenues shall be sufficient in amounts to pay debt service when due, to establish and maintain any reserves and other requirements, and to pay financing costs, including costs of or relating to credit enhancement facilities, all as provided for in the bond proceedings.

Those excises, taxes, and revenues are and shall be deemed to be levied and collected, in addition to the purposes otherwise provided for by law, to provide for the payment of debt service and financing costs in accordance with this section and the bond proceedings.

(O) The General Assembly has the same authority with regard to obligations issued under this section as it has under division (E) of section 164.11 of the Revised Code with regard to obligations issued under Chapter 164. of the Revised Code.

(P) There is hereby created in the state treasury the Higher Education Capital Facilities Bond Service Fund. All moneys received by the state and required by the bond proceedings, consistent with this section, to be deposited, transferred, or credited to the bond service fund, and all other moneys transferred or allocated to or received for the purposes of that fund, shall be deposited and credited to the bond service fund, subject to any applicable provisions of the bond proceedings but without necessity for any act of appropriation. During the period beginning with the date of the first issuance of obligations and continuing during the time that any obligations are outstanding in accordance with their terms, so long as moneys in the bond service fund are insufficient to pay debt service when due on those obligations payable from that fund (except the principal amounts of bond anticipation notes payable from the proceeds of renewal notes or bonds anticipated) and due in the particular fiscal year, a sufficient amount of moneys of the state are committed and, without necessity for further act of appropriation, shall be paid to the bond service fund for the purpose of paying that debt service when due. For the purpose of this section, and if so provided in the applicable bond proceedings, debt service includes costs relating to credit enhancement facilities that represent payment of debt service.

The bond service fund is a trust fund and is hereby pledged to the payment of debt service. Payment of that debt service shall be made or provided for by the issuing authority in accordance with the bond proceedings without necessity for any act of appropriation.

(Q) The bond proceedings may provide for the establishment of separate accounts in the bond service fund and for the application of those accounts only to debt service on specific obligations, and for other accounts in the bond service fund within the general purposes of that fund.

(R) Subject to the bond proceedings pertaining to any obligations then outstanding in accordance with their terms, the issuing authority may in the bond proceedings pledge all, or such portion as the issuing authority determines, of the moneys in the bond service fund to the payment of debt service on particular obligations, and for the establishment and maintenance of any reserves for payment of particular debt service.

(S) If and so long as the moneys to the credit of the bond service fund, together with any other moneys available for the purpose, are insufficient to meet in full all payments when due of the amount required, the Office of Budget and Management shall at the times as provided in the bond proceedings transfer a sufficient amount to the bond service fund from the moneys derived from all excises, taxes, and other revenues of the state referred to in division (N) of this section.

(T) Obligations issued under this section, their transfer, and the interest, interest equivalent, and other income or accreted amounts on them, including any profit made on their sale, exchange, or other disposition, shall at all times be free from taxation within this state.

SECTION 3 .  (A) Unless otherwise provided in any applicable bond proceedings, moneys to the credit of special funds referred to in Sections 1 and 2 of this act may be invested by or on behalf of the state only in one or more of the following:

(1) Notes, bonds, or other direct obligations of the United States or of any agency or instrumentality of the United States, or in no-front-end-load money market mutual funds consisting exclusively of those obligations, or in repurchase agreements, including those issued by any fiduciary, secured by those obligations, or in collective investment funds consisting exclusively of those obligations;

(2) Obligations of this state or any political subdivision of this state;

(3) Certificates of deposit of any national bank located in this state and any bank, as defined in section 1101.01 of the Revised Code, subject to inspection by the Superintendent of Financial Institutions;

(4) The Treasurer of State's pooled investment program under section 135.45 of the Revised Code.

(B) The income from investments referred to in this section shall be credited to such special funds or otherwise as the issuing authority determines in the bond proceedings. Those investments may be sold or exchanged at times as the issuing authority determines, provides for, or authorizes.

SECTION 4 .  (A) This section is in implementation of division (D) of Section 17 of Article VIII of the Ohio Constitution for purposes of issuing direct obligations of the state subject to that section during the fiscal year ending June 30, 2000.

(B) For purposes of the computation of debt service under Section 17 of Article VIII of the Ohio Constitution, there shall be included debt service payable on securities that are direct obligations of the state issued under Article VIII of the Ohio Constitution, and on those bonds anticipated by bond anticipation notes, to the extent that debt service on those securities is anticipated to be paid from the General Revenue Fund or net state lottery proceeds. Examples of securities the debt service on which is not anticipated to be paid from either of those sources are bonds of the state issued for highway purposes pursuant to Section 2i or 2m of Article VIII of the Ohio Constitution, which, although general obligations of the state, have been and are anticipated to be paid from highway user receipts and not from the General Revenue Fund or net state lottery proceeds.

(C) If there is no separate constitutional or statutory provision applicable for the purpose, debt service on bonds anticipated by bond anticipation notes shall be estimated as provided in this division. That amount, to be certified either by the issuing authority of the particular notes or by the Governor or the Governor's designee pursuant to division (E) of this section, shall be the estimated amount that would have been payable on bonds maturing serially in each fiscal year after the fiscal year of issuance of the notes over the maximum period of maturity for the bonds authorized in the particular governing constitutional or statutory provision, as if those bonds had been issued without the prior issuance of the notes, and computed on a substantially level debt service basis applying an interest rate or rates certified to be market rates at the time.

(D) In the case of securities issued to refund or retire securities, the debt service on the new securities shall be counted and the debt service on the securities being refunded or retired shall not be counted, to the extent that the principal amount of the new securities does not exceed the then outstanding principal amount of the prior securities.

(E) The Governor, or the Governor's designee for the purpose, shall determine and certify the fiscal year amounts required to be applied or set aside for payment of debt service, the securities to which that debt service relates, the total estimated revenues of the state for the General Revenue Fund and from net state lottery proceeds during the particular fiscal year, and any other financial data necessary or appropriate for the purpose of the computations under division (A) of Section 17 of Article VIII of the Ohio Constitution and this section. Those determinations and certifications shall be filed with the Director of Budget and Management, the Treasurer of State, and the issuing authority for the particular obligations, at or prior to the time those securities are issued. The Governor's designee for the purpose may be the Director or Assistant Director of Budget and Management, or any employee or official of the Governor's office.

(F) For purposes of this section:

(1) "Interest" or "interest equivalent," "outstanding," and "securities" have the same meanings as in section 133.01 of the Revised Code.

(2) "Debt service" means principal, including any mandatory sinking fund deposits and mandatory redemption payments, and interest or interest equivalent payable on securities, as those payments are stated to come due and to be payable.

SECTION 5 .  There is hereby appropriated both from the General Revenue Fund and the Common Schools Capital Facilities Bond Service Fund created in Section 1 of this act, the amount of $13,650,000 for Fiscal Year 2000 and $14,600,000 for Fiscal Year 2001, to be used for the purpose of paying the debt service on general obligation bonds issued pursuant to Section 2n of Article VIII of the Ohio Constitution and Section 1 of this act. If it is determined that additional appropriations are necessary for the purpose, such amounts are hereby appropriated. The GRF appropriation item 230-428 in Section 10 of Am. Sub. H.B. No. 282 of the 123rd General Assembly is hereby reduced by $13,650,000 for Fiscal Year 2000 and $14,600,000 for Fiscal Year 2001.

SECTION 6 .  There is hereby appropriated both from the General Revenue Fund and the Higher Education Capital Facilities Bond Service Fund created in Section 2 of this act, the amount of $4,375,000 for Fiscal Year 2000 and $17,225,000 for Fiscal Year 2001, to be used for the purpose of paying the debt service on general obligation bonds issued pursuant to Section 2n of Article VIII of the Ohio Constitution and Section 2 of this act. If it is determined that additional appropriations are necessary for the purpose, such amounts are hereby appropriated. The GRF appropriation item 235-401 in Section 7 of Am. Sub. H.B. No. 282 of the 123rd General Assembly is hereby reduced by $4,375,000 for Fiscal Year 2000 and $17,225,000 for Fiscal Year 2001.

SECTION 7 .  This act is hereby declared to be an emergency measure necessary for the immediate preservation of the public peace, health, and safety. The reasons for such necessity lie in the fact that immediate effective action is necessary in order to promptly implement Sections 2n and 17 of Article VIII of the Ohio Constitution adopted on November 2, 1999, by a majority of the electors of the state voting thereon, and thereby authorize general obligation bonds to be issued for facilities for elementary and secondary education throughout the state and for state-supported and state-assisted institutions of higher education, at a lower interest cost to the state, and to enable other direct obligations of the state to be issued consistent with Section 17 of Article VIII of the Ohio Constitution. Therefore, this act shall go into immediate effect.

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