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Sub. H. B. No. 151 As Reported by the House Financial Institutions, Real Estate and Securities CommitteeAs Reported by the House Financial Institutions, Real Estate and Securities Committee
127th General Assembly | Regular Session | 2007-2008 |
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Representatives Mandel, Jones
Cosponsors:
Representatives Adams, Aslanides, Barrett, Brinkman, Bubp, Budish, Carmichael, Collier, Combs, DeGeeter, Dodd, Dolan, Flowers, Gibbs, Goyal, Hite, Latta, Mallory, McGregor, J., Patton, Peterson, Schindel, Setzer, Uecker, Wagner, Wagoner, Webster, Wolpert, Zehringer
A BILL
To amend sections 135.143, 148.04, 3305.01, 3305.02, and 3334.02 and to enact sections 137.01 to 137.09 of the Revised Code to specify procedures for divesting investments a public investor holds in directly held publicly traded companies conducting specified types of business in the Islamic Republic of Iran and the Republic of the Sudan and to prohibit public investors from investing in such a company and to authorize the Ohio public deferred compensation board, the alternative retirement program, and the Ohio college savings program to offer a terror-free investment option.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO:
Section 1. That sections 135.143, 148.04, 3305.01, 3305.02, and 3334.02 be amended and sections 137.01, 137.02, 137.03, 137.04, 137.05, 137.06, 137.07, 137.08, and 137.09 of the Revised Code be enacted to read as follows:
Sec. 135.143. (A) The treasurer of state may invest or
execute transactions for any part or all of the interim funds of
the state in the following classifications of obligations:
(1) United States treasury bills, notes, bonds, or any
other
obligations or securities issued by the United States
treasury or
any other obligation guaranteed as to principal and
interest by
the United States;
(2) Bonds, notes, debentures, or any other obligations or
securities issued by any federal government agency or
instrumentality;
(3) Bonds and other
direct obligations
of the
state of Ohio
issued by the treasurer of state and
of the
Ohio
public facilities
commission, the Ohio building authority, and the Ohio housing finance agency;
(4)(a) Written repurchase agreements with any eligible
Ohio
financial institution that is a member of the federal
reserve
system or federal home loan bank or any recognized United
States
government securities dealer, under the terms of which
agreement
the treasurer of state purchases and the eligible
financial
institution or dealer agrees unconditionally to
repurchase any of
the securities that are listed in division
(A)(1), (2), or (6)
of
this section and that will mature or are
redeemable within ten
years from the date of purchase. The
market value of securities
subject to these transactions must
exceed the principal value of
the repurchase agreement by an
amount specified by the treasurer
of state, and the securities
must be delivered into the custody of
the treasurer of state or
the qualified trustee or agent
designated by the treasurer of
state. The agreement shall contain
the requirement that for each
transaction pursuant to the
agreement, the participating
institution or dealer shall provide
all of the following
information:
(i) The par value of the securities;
(ii) The type, rate, and maturity date of the securities;
(iii) A numerical identifier generally accepted in the
securities industry that designates the securities.
(b) The treasurer of state also may sell any securities,
listed in division (A)(1), (2), or (6) of this section,
regardless
of
maturity or time of redemption of the securities,
under the
same
terms and conditions for repurchase, provided that
the
securities
have been fully paid for and are owned by the
treasurer
of state
at the time of the sale.
(5) Securities lending agreements with any eligible
financial institution that is a member of the federal reserve
system or federal home loan bank or any recognized United States
government securities dealer, under the terms of which
agreements
the treasurer of state lends securities and the
eligible
financial
institution or dealer agrees to simultaneously
exchange
similar
securities or cash, equal value for equal value.
Securities and cash received as collateral for a securities
lending
agreement are not interim funds of the state. The
investment of cash
collateral received pursuant to a securities
lending agreement may be invested
only in such instruments
specified by the treasurer of state in accordance
with a written
investment policy.
(6) Various forms of commercial paper issued by any
corporation that is incorporated under the laws of the United
States or a state, which
notes are rated
at the time of
purchase
in the
two
highest
categories by
two
nationally
recognized rating
agencies, provided
that the
total amount
invested
under this
section in
any commercial paper
at any time
shall not exceed
twenty-five per cent of the
state's total
average
portfolio, as
determined and calculated by
the treasurer
of
state;
(7) Bankers acceptances, maturing in two hundred seventy
days or less, which are eligible for purchase by the federal
reserve system, provided that the total amount invested in
bankers
acceptances at any time shall not exceed ten per cent of
the
state's total average portfolio, as determined and calculated
by
the treasurer of state;
(8) Certificates of deposit in eligible institutions
applying for interim moneys as provided in section 135.08 of the
Revised Code, including linked deposits as provided in sections
135.61
to
135.67
of the Revised Code, agricultural
linked
deposits
as provided in sections 135.71 to 135.76 of the
Revised
Code, and
housing linked deposits as
provided in
sections 135.81 to
135.87
of the Revised Code;
(9) The state treasurer's investment pool authorized under
section 135.45 of the Revised Code;
(10) Debt Except as provided in Chapter 137. of the Revised Code, debt interests, other than commercial paper described
in division (A)(6) of this section, rated
at the
time of purchase
in the three highest categories by
two
nationally
recognized
rating
agencies and issued by
corporations that are
incorporated
under the laws of the United
States or a state, or
issued by
foreign nations diplomatically
recognized by the United
States
government, or any instrument
based on, derived from, or
related
to such interests. All
interest and principal shall be
denominated and payable in United
States funds. The investments
made under division (A)(10) of this
section shall not exceed in
the aggregate
twenty-five per
cent of the state's total average
portfolio, as determined and
calculated by the treasurer of
state.
The investments made under
division (A)(10) of this
section in
debt interests issued by
foreign nations shall not
exceed in the
aggregate one per cent of
the state's total average
portfolio, as
determined and calculated
by the treasurer of state.
The
investments made under division
(A)(10) of this
section in the
debt interests of a single issuer
shall not exceed
in the
aggregate one-half of one per cent of the
state's total
average
portfolio, as determined and calculated by
the treasurer of state.
The treasurer of state shall invest under division (A)(10)
of
this section in a debt interest issued by a foreign nation
only if
the debt interest is backed by the full faith and credit
of that
foreign nation. For purposes of division (A)(10) of this
section,
a debt interest is rated
in the three
highest
categories by
two
nationally
recognized rating
agencies
if either the debt interest
itself or the
issuer of the
debt
interest is rated, or is
implicitly rated,
at the
time of purchase in the three highest
categories by
two
nationally recognized
rating
agencies.
(11) No-load money market mutual funds consisting
exclusively of obligations described in division (A)(1), (2),
or
(6) of
this section and repurchase agreements secured by such
obligations.
(12) Obligations of a board of education issued under
authority
of section 133.10 or 133.301 of the Revised Code.
(B) Whenever, during a period of designation, the
treasurer
of state classifies public moneys as interim moneys, the treasurer
of state shall notify the state board of deposit of such action.
The
notification shall be given within thirty days after such
classification and, in the event the state board of deposit does
not concur in such classification or in the investments or
deposits made under this section, the board may order the
treasurer of state to sell or liquidate any of
the
investments
or
deposits, and any such order shall specifically
describe the
investments or deposits and fix the date upon which
they are to
be
sold or liquidated. Investments or deposits so
ordered to be
sold
or liquidated shall be sold or liquidated for
cash by the
treasurer of state on the date fixed in such order at
the then
current market price. Neither the treasurer of state nor
the
members of the state board of deposit shall be held
accountable
for any loss occasioned by sales or liquidations of
investments
or
deposits at prices lower than their cost. Any loss
or expense
incurred in making
these sales or liquidations is
payable as
other
expenses of the treasurer's office.
(C) If any securities or obligations invested in by the
treasurer of state pursuant to this section are registrable
either
as to principal or interest, or both, such securities or
obligations shall be registered in the name of the treasurer of
state.
(D) The treasurer of state is responsible for the
safekeeping of all securities or obligations under this section.
Any such securities or obligations may be deposited for
safekeeping as provided in section 113.05 of the Revised Code.
(E) Interest earned on any investments or deposits
authorized by this section shall be collected by the treasurer of
state and credited by the treasurer of state to the proper fund of
the state.
(F) Whenever investments or deposits acquired under this
section mature and become due and payable, the treasurer of state
shall present them for payment according to their tenor, and
shall
collect the moneys payable thereon. The moneys so
collected shall
be treated as public moneys subject to sections
135.01 to 135.21
of the Revised Code.
(G) The treasurer of state and any board of education
issuing
obligations referred to in division (A)(12) of this
section may enter
into an agreement providing for:
(1) The purchase of those obligations by the treasurer of
state on terms
and subject to conditions set forth in the
agreement;
(2) The payment by the board of education to the treasurer
of state of
a reasonable fee
as consideration for the agreement of
the treasurer of state to purchase those
obligations; provided,
however, that the treasurer of state shall not be
authorized to
enter into any such agreement with the board of education of a
school district that has an outstanding obligation with respect to
a loan
received under authority of section 3313.483 of the Revised
Code.
(H) For purposes of division
(G) of this section, a fee
shall
not be considered reasonable unless it is set to recover
only
the direct costs and a reasonable estimate of the indirect
costs
associated with the purchasing of obligations of a school
board
under division (G) of this section and any reselling of the
obligations or any interest in the obligations, including
interests in a fund comprised of the obligations. No money from
the general revenue fund shall be used to subsidize the purchase
or resale of these obligations.
(I) All money collected
by the treasurer of state from the
fee imposed by division
(G) of this section shall be
deposited to
the credit of the state school board obligations
fund, which is
hereby created in the state treasury. Money
credited to the fund
shall be used solely to pay the treasurer
of state's direct and
indirect costs associated with purchasing
and reselling
obligations of a board of education under division
(G) of this
section.
Sec. 137.01. As used in this chapter:
(A) "Active business operations" means all business operations that are not inactive business operations.
(B) "Business operations" means engaging in commerce in any form in Sudan or Iran, including by maintaining, selling, acquiring, developing, owning, possessing, operating, or leasing equipment, facilities, personnel, products, services, personal or real property, or any other apparatus of business or commerce.
(C) "Company" means a sole proprietorship, organization, association, corporation, partnership, joint venture, limited partnership, limited liability partnership, limited liability company, business association, or other entity, including any wholly-owned subsidiary, majority-owned subsidiary, parent company, or affiliate of any of those types of entities, that exists for the purpose of making a profit.
(D) "Complicit" means taking actions during any preceding twenty-month period that directly support or promote the genocidal campaign in the Darfur region of Sudan, including, but not limited to, preventing members of the population of the Darfur region of Sudan negatively affected by genocide from communicating with each other; encouraging Sudanese citizens to speak against the internationally approved security force that provides aide to the Darfur region; actively working to deny, cover up, or alter the record on human rights abuses in Darfur; or other similar actions.
(E) "Direct holdings" means all stocks or bonds of a company held directly by a public investor or held in an account or fund of which the public investor owns all of the shares or interests.
(F) "Government of Iran" means the Islamic republic of Iran, its instrumentalities, and companies owned or controlled by the government of Iran.
(G) "Government of Sudan" means the government in Khartoum, Sudan, that is led by the national congress party, formerly known as the national Islamic front, or any successor government formed on or after October 13, 2006, including the coalition national unity government agreed upon in the "2005 Comprehensive Peace Agreement," and does not include the regional government of southern Sudan.
(H) "Inactive business operations" means those business operations conducted by a company that involve only the continued holding or renewal of rights to property that, at one time, was used for the purpose of generating revenue for the company but is not presently used for such purpose.
(I) "Indirect holdings" means all stocks and bonds of a company that are not direct holdings and are held in an account or fund in which the public investor owns shares or interests together with other investors not subject to the provisions of this chapter, as well as any private equity fund, private equity fund-of-funds, venture capital fund, hedge fund, hedge fund-of-funds, real estate fund or other investment vehicle that is not publicly traded, mutual funds, and pooled or securitized investment vehicles.
(J) "Iran" means the Islamic republic of Iran.
(K) "Marginalized populations of Sudan" includes, but is not limited to, all of the following:
(1) The portion of the population in the Darfur region that has been negatively affected by genocide;
(2) The portion of the population of southern Sudan negatively affected by the civil war that occurred between the north and south regions of Sudan;
(3) The Beja, Rashidiya, and other similarly underserved groups of eastern Sudan;
(4) The Nubian and other similarly underserved groups in the Abyei, southern blue Nile, and Nuba mountain regions of Sudan;
(5) The Amri, Hamadab, Manasir, and other similarly underserved groups of northern Sudan.
(L) "Military equipment" means weapons, arms, military supplies, and equipment including, but not limited to, radar systems, or military-grade transport vehicles, that readily may be used for military purposes; or supplies or services sold or directly or indirectly provided to any force actively participating in armed conflict in Sudan.
(M) "Mineral extraction activities" include exploring, extracting, processing, transporting, or wholesale selling or trading of elemental minerals or associated metal alloys or oxides, also known as ore, including gold, copper, chromium, chromite, diamonds, iron, iron ore, silver, tungsten, uranium, and zinc; and includes facilitating such activities, including by providing supplies or services in support of such activities.
(N) "Oil-related activities" includes, but is not limited to, owning rights to oil blocks; exporting, extracting, producing, refining, processing, exploring for, transporting, selling, or trading of oil; constructing, maintaining, or operating a pipeline, refinery, or other oil-field infrastructure; or facilitating such activities, including by providing supplies or services in support of such activities. "Oil-related activities" does not mean engaging in only the retail sale of gasoline and related consumer products.
(O) "Petroleum resource" means petroleum, petroleum byproducts, or natural gas.
(P) "Power production activities" means any business operation that involves a project commissioned by the national electricity corporation of Sudan or other similar entity of the government of Sudan whose purpose is to facilitate power generation and delivery, including, but not limited to, establishing power-generating plants or hydroelectric dams, selling or installing components for a project, providing service contracts related to the installation or maintenance of a project, or facilitating any of these activities, including by providing supplies or services in support of such activities.
(Q) "Public investor" means the treasurer of state, the state board of deposit, the workers' compensation oversight commission, the administrator of workers' compensation, and the board of each of the state retirement systems.
(R) "Public fund" means the assets included in any fund portfolio that is under the control of, or controlled on behalf of, a public investor.
(S) "Scrutinized active business operation" means active business operations that have resulted in a company becoming a scrutinized company.
(T) "Scrutinized business operations" means business operations that have resulted in a company that meets any of the following criteria:
(1) The company has business operations that involve contracts with or provision of supplies or services to the government of Sudan, companies in which the government of Sudan has any direct or indirect equity share, consortiums or projects commissioned by the government of Sudan, or companies involved in consortiums or projects commissioned by the government of Sudan, and more than ten per cent of the company's revenues or assets linked to Sudan involve oil-related activities or mineral-extraction activities; less than seventy-five per cent of the company's revenues or assets linked to Sudan involve contracts with or provision of oil-related or mineral-extracting products or services to the regional government of southern Sudan or a project or consortium created exclusively by that regional government; and the company has failed to take substantial action specific to Sudan; or more than ten per cent of the company's revenues or assets linked to Sudan involve power-production activities; less than seventy-five per cent of the company's power-production activities include projects whose intent is to provide power or electricity to the marginalized populations of Sudan; and the company has failed to take substantial action specific to Sudan.
(2) The company is complicit in the Darfur genocide.
(3) The company supplies military equipment within Sudan, unless it clearly shows that the military equipment cannot be used to facilitate offensive military actions in Sudan or the company implements rigorous and verifiable safeguards to prevent use of that equipment by forces actively participating in armed conflict. Examples of safeguards include post-sale tracking of such equipment by the company, certification from a reputable and objective third party that such equipment is not being used by a party participating in armed conflict in Sudan, or sale of such equipment solely to the regional government of southern Sudan or any internationally recognized peacekeeping force or humanitarian organization.
(4)(a) The company has business operations that involve contracts with or provision of supplies or services to the government of Iran, companies in which the government of Iran has any direct or indirect equity share, consortiums, or projects commissioned by the government of Iran, or companies involved in consortiums or projects commissioned by the government of Iran, and one of the following apply:
(i) More than ten per cent of the company's total revenues or assets are linked to Iran and involve oil-related activities, mineral-extraction activities, or petroleum resources;
(ii) The company has, with actual knowledge, on or after August 5, 1996, made an investment of twenty million dollars or more, or any combination of investments of at least ten million dollars each, which in the aggregate equals or exceeds twenty million dollars in any twelve-month period, and which directly or significantly contributes to the enhancement of Iran's ability to develop the petroleum resources of Iran;
(iii) The company is engaged in business with an Iranian organization labeled as a terrorist organization by the United States government.
(b) Any company that takes substantial action specific to Iran with respect to divisions (T)(4)(a)(i) and (T)(4)(a)(ii) of this section shall not meet the criteria to be deemed a company involved in scrutinized business operations.
(U) "Social development company" means a company whose primary purpose in Sudan is to provide only the following humanitarian goods or services to the people of Sudan:
(1) Medicine or medical equipment;
(2) Agricultural supplies or infrastructure;
(3) Educational opportunities;
(4) Journalistic activities;
(5) Information or information materials;
(6) Spiritual-related activities;
(7) Services of a purely clerical or reporting nature;
(8) Food, clothing, or general consumer goods that are unrelated to oil-related activities, mineral extraction activities, or power production activities.
(V) "Substantial action specific to Iran" means adopting, publicizing, and implementing a formal plan to cease scrutinized business operations within one year and to refrain from any such new business operations.
(W) "Substantial action specific to Sudan" means adopting, publicizing, and implementing a formal plan to cease scrutinized business operations within one year and to refrain from any such new business operations; undertaking humanitarian efforts in conjunction with an international organization, the government of Sudan, the regional government of southern Sudan, or a nonprofit entity evaluated and certified by an independent third party to be substantially in a relationship to the company's Sudan business operations and of benefit to one or more marginalized populations of Sudan; or, through engagement with the government of Sudan, materially improving conditions for the genocidally victimized population in Darfur.
(X) "Sudan" means the republic of the Sudan.
Sec. 137.02. (A) Within ninety days after the effective date of this section, each public investor shall make its best efforts to identify all publicly traded companies involved in scrutinized business operations in which the public investor has direct or indirect holdings or could possibly have such holdings in the future. The efforts shall include:
(1) Reviewing and relying, as appropriate in the public investor's judgment, on publicly available information regarding companies having business operations in Iran or Sudan, including information provided by nonprofit organizations, research firms, international organizations, and government entities;
(2) Contacting asset managers contracted by the public investor that invest in companies having business operations in Iran or Sudan;
(3) Contacting other institutional investors that have divested from or engaged with companies that have business operations in Iran or Sudan;
(4) Reviewing the laws of the United States regarding the levels of business activity that would cause application of sanctions for companies conducting business or investing in countries that are designated state sponsors of terror.
(B) Within ninety days after the effective date of this section, each public investor shall create a "scrutinized companies with activities in Sudan list" and a "scrutinized companies with activities in Iran list," consisting of all publicly traded companies identified in division (A) of this section, shall make the lists publicly available, and shall update the lists annually.
(C) Notwithstanding the provisions of this chapter, a social-development company that is not complicit in the Darfur genocide is not considered a scrutinized company.
(D) The public investor shall engage the companies on the scrutinized companies with activities in Sudan list and the scrutinized companies with activities in Iran list, in which the public investor owns direct or indirect holdings, according to the following:
(1) For each company identified in this paragraph that has only inactive business operations, the public investor shall send a written notice informing the company of the requirements of this chapter and encouraging it to continue to refrain from initiating active business operations in Iran or Sudan until it is able to avoid scrutinized business operations. The public investor shall continue such correspondence semiannually.
(2) For each company newly identified under this section that has active business operations, the public investor shall send a written notice informing the company of its scrutinized company status and that it may become subject to divestment by the public investor. The notice shall inform the company of the opportunity to clarify its Iran-related or Sudan-related activities and encourage the company, within ninety days, to cease its scrutinized business operations or convert such operations to inactive business operations in order to avoid qualifying for divestment by the public investor.
(3) If, within ninety days after the public investors create the lists pursuant to division (B) of this section, a company on either list ceases scrutinized business operations, the public investor shall remove the company from the scrutinized companies with activities in Sudan list and the scrutinized companies with activities in Iran list, and the provisions of this chapter shall cease to apply to that company unless that company resumes scrutinized business operations. If, within ninety days after the public investors create the lists, the company converts its scrutinized active business operations to inactive business operations, the company is subject to all provisions of this chapter relating to inactive business operations. A company may be on both the scrutinized companies with activities in Sudan list and the scrutinized companies with activities in Iran list. A company may be removed from one list but remain on the other list, in which case the company is subject to the provisions of this chapter applicable to the list on which the company remains.
(4) The public investor shall submit letters to the managers of actively managed investment funds containing indirect holdings in companies identified in division (A) of this section that have scrutinized active business operations requesting that they consider removing such companies from the fund or create a similar actively managed fund having indirect holdings devoid of such companies.
Sec. 137.03. (A) Each public investor shall dispose of any direct holdings in publicly traded companies with scrutinized business operations as follows:
(1) If, after the ninety-day period described in division (D)(3) of section 137.02 of the Revised Code the company continues to have scrutinized active business operations, and only while such company continues to have scrutinized active business operations, the public investor shall sell, redeem, divest, or withdraw all direct holdings in publicly traded securities of the company, except as provided in section 137.04 of the Revised Code, from the public investor's assets under management within twelve months after the ninety-day period described in division (D)(3) of section 137.02 of the Revised Code.
(2) If a company that ceased scrutinized active business operations following engagement pursuant to division (D)(3) of section 137.02 of the Revised Code resumes such operations, this division immediately applies, and the public investor shall send a written notice to the company. The public investor also shall immediately reinstate the company on the scrutinized companies with activities in Sudan list or on the scrutinized companies with activities in Iran list, as applicable.
(B) The public investor shall not acquire direct holdings in publicly traded companies on the scrutinized companies with activities in Sudan list or the scrutinized companies with activities in Iran list that have active business operations, except as provided in section 137.04 of the Revised Code.
(C) If a manager of an actively managed investment fund, in which a public investor has indirect holdings of publicly traded companies that have scrutinized active business operations, has created, pursuant to division (D)(4) of section 137.02 of the Revised Code, a similar actively managed fund devoid of such companies, the public investor shall replace all applicable investments with investments in the similar fund in an expedited time frame consistent with prudent investing standards.
(D) Notwithstanding any other provisions of sections 137.01 to 137.09 of the Revised Code, a public investor may cease any divestment required by this section and may reinvest in companies on the scrutinized companies with activities in Sudan list or the scrutinized companies with activities in Iran list from which it divested if clear and convincing evidence shows that the value of all assets under management by the public investor becomes equal to or less than ninety-nine and one-half per cent, or at least less than fifty basis points, of the hypothetical value of all assets under management by the public investor assuming no divestment for any company had occurred under this section. Cessation of divestment, reinvestment, or any subsequent ongoing investment authorized by this division is limited to the minimum steps necessary to avoid the contingency set forth in this division or that no divestment of any company is required for less than fair value. For any cessation of divestment, reinvestment, or subsequent ongoing investment authorized by this section, the public investor shall provide a written report, in advance of initial reinvestment, to the president of the senate and the speaker of the house of representatives, and updated semiannually thereafter for as long as the public investor continues to act pursuant to this division, setting forth the reasons and justification, supported by clear and convincing evidence, for the public investor's decisions to cease divestment, reinvest, or remain invested in companies having scrutinized active business operations. This division does not apply to reinvestment in companies on the grounds that they have ceased to have scrutinized active business operations.
Sec. 137.04. (A) A company that is headquartered in the United States and that complies with all relevant United States foreign trade controls relating to Iran or Sudan is not subject to divestment or the investment prohibition pursuant to section 137.03 of the Revised Code.
(B) The provisions and requirements of this chapter do not apply to any private holdings of a public investor.
Sec. 137.05. (A) Each public investor shall file a report with the president of the senate, the speaker of the house of representatives, the minority leader of the senate, the minority leader of the house of representatives, the Ohio retirement study council, and the workers compensation council that includes the scrutinized companies with activities in Sudan list and the scrutinized companies with activities in Iran list within thirty days after the list is created and within thirty days after the list is updated pursuant to section 137.02 of the Revised Code. The public investor shall make the report available to the public.
(B) Each public investor shall file a report annually, which shall be made available to the public, to the president of the senate, the speaker of the house of representatives, the minority leader of the senate, the minority leader of the house of representatives, the Ohio retirement study council, and the workers compensation council, and send a copy of that report to the United States presidential special envoy to Sudan and the United States presidential special envoy to Iran, or an appropriate designee or successor, which includes:
(1) A summary of correspondence with companies engaged by the public investor under division (D) of section 137.02 of the Revised Code;
(2) All investments sold, redeemed, divested, or withdrawn in compliance with section 137.03 of the Revised Code;
(3) All prohibited investments under division (B) of section 137.03 of the Revised Code;
(4) Any progress made under division (D)(4) of section 137.02 of the Revised Code and division (C) of section 137.03 of the Revised Code;
(5) A list of all publicly traded securities held directly by the public investor.
Sec. 137.06. (A) If any of the following occur, a public investor shall no longer assemble the scrutinized companies with activities in Sudan list, shall cease engagement and divestment of such companies, and may reinvest in such companies as long as such companies do not satisfy the criteria for inclusion in the scrutinized companies with activities in Iran list:
(1) Congress or the president of the United States determines that the government of Sudan has sufficiently halted the genocide in the Darfur region for at least twelve months.
(2) The federal government revokes all sanctions imposed against the government of Sudan.
(3) Congress or the president of the United States, through legislation or executive order, declares that mandatory divestment of the type provided for in this chapter interferes with the conduct of United States foreign policy.
(4) Congress or the president of the United States declares that the government of Sudan has honored its commitments to cease attacks on civilians, demobilize and demilitarize the Janjaweed and associated militias, grant free and unfettered access for deliveries of humanitarian assistance, and allow for the safe and voluntary return of refugees and internally displaced persons.
(B) If any of the following occur, a public investor shall no longer assemble the scrutinized companies with activities in Iran list and shall cease engagement, investment prohibitions, and divestment. The public investor may reinvest in such companies as long as such companies do not satisfy the criteria for inclusion in the scrutinized companies with activities in Sudan list:
(1) Congress or the president of the United States determines that the government of Iran has ceased to acquire weapons of mass destruction and support international terrorism;
(2) The federal government revokes all sanctions imposed against the government of Iran.
(3) Congress or the president of the United States declares that mandatory divestment of the type provided for in this act interferes with the conduct of United States foreign policy.
Sec. 137.07. The attorney general shall enforce the provisions of this chapter and the attorney general or the attorney general's designee may bring an action in court to enforce this chapter.
Sec. 137.08. A public investor is not liable for breach of the public investor's fiduciary duty to the public fund for which that public investor has the authority to invest assets if the public investor complies in good faith with the requirements of this chapter. If the public investor made determinations in good faith regarding the status of a company as required under this chapter, the members are not liable in an action for libel or slander. All former, present, or future public investors and members of any boards of all public investors and all officers, employees, and agents of such boards shall be indemnified, whether jointly or severally, for all claims, demands, suits, actions, damages, judgments, costs, charges, and expenses, including court costs and attorney's fees, and against all liability, losses, and damages of any nature that such board members, officers, employees, or agents may incur by reason of any decision to restrict, reduce, or eliminate investments in companies doing business in Iran or Sudan. A board member, officer, employee, or agent of a public investor shall be indemnified through the public fund in which the public authority has the authority to invest. In any action pursuant to this chapter, any state retirement board has any rights granted in section 109.98 of the Revised Code and the workers' compensation oversight commission has any rights granted in section 109.981 of the Revised Code.
Sec. 137.09. Except as otherwise specified in this chapter or as otherwise specified by the general assembly, this chapter prevails over sections 135.143, 145.11, 742.11, 3307.15, 3309.15, 4123.44, and 5505.06 of the Revised Code and all other laws that conflict with this chapter.
Sec. 148.04. (A) The Ohio public employees deferred
compensation board shall initiate, plan, expedite, and, subject
to an appropriate assurance of the approval of the internal
revenue service, promulgate and offer to all eligible employees,
and thereafter administer on behalf of all participating
employees and continuing members, and alter as required, a
program for deferral of compensation, including a reasonable
number of options to the employee for the investment of deferred
funds, including life insurance, annuities, variable annuities,
pooled investment funds managed by
the board, or other forms of investment approved by the board,
always in such form as will assure the desired tax treatment of
such funds. There may be at least one terror-free investment option, as defined in section 3305.01 of the Revised Code, among the investment options offered to eligible employees. Annually, the board shall prepare, and deliver to the president of the senate and the speaker of the house of representatives a report regarding the board's efforts to identify and provide a terror-free investment option. The members of the board are the trustees of any deferred funds and shall discharge
their duties with respect to the funds solely in the interest of and for the
exclusive benefit of participating employees, continuing members, and their
beneficiaries. With respect to such deferred funds, section
148.09 of the Revised Code shall
apply to claims against participating employees or continuing members and
their employers.
(B) Every employer of an eligible employee shall contract
with the employee upon the employee's application for
participation in a
deferred compensation program offered by the board. Every
retirement system serving an eligible employee shall serve as
collection agent for compensation deferred by any of its members
and account for and deliver such sums to the board.
(C) The board shall, subject to any applicable contract
provisions, undertake to obtain as favorable conditions of tax
treatment as possible, both in the initial programs and any
permitted alterations of them or additions to them, as to such
matters as terms of distribution, designation of beneficiaries,
withdrawal upon disability, financial hardship, or termination of
public employment, and other optional provisions.
(D) In no event shall the total of the amount of deferred
compensation to be set aside under a deferred compensation
program and the employee's nondeferred income for any year exceed
the total annual salary or compensation under the existing salary
schedule or classification plan applicable to the employee in
that year.
Such a deferred compensation program shall be in addition
to any retirement or any other benefit program provided by law
for employees of this state. The board shall adopt rules
pursuant to Chapter 119. of the Revised Code to provide any
necessary standards or conditions for the administration of its
programs, including any limits on the portion of a participating
employee's compensation that may be deferred in order to avoid
adverse treatment of the program by the internal revenue service
or the occurrence of deferral, withholding, or other deductions
in excess of the compensation available for any pay period.
Any income deferred under such a plan shall continue to be
included as regular compensation for the purpose of computing the
contributions to and benefits from the retirement system of such
employee. Any sum so deferred shall not be included in the
computation of any federal and state income taxes withheld on
behalf of any such employee.
(E) This section does not limit the authority of any
municipal corporation, county, township, park district,
conservancy district, sanitary district, health district, public
library, county law library, public institution of higher
education, or school district to provide separate authorized
plans or programs for deferring compensation of their officers
and employees in addition to the program for the deferral of
compensation offered by the board. Any municipal corporation, township,
public institution of higher education, or school district that
offers such plans or programs shall include a reasonable number
of options to its officers or employees for the investment of the
deferred funds, including annuities, variable annuities,
regulated investment trusts, or other forms of investment
approved by the municipal corporation, township, public institution of higher
education, or school district, that will assure the desired tax
treatment of the funds.
Sec. 3305.01. As used in this chapter:
(A) "Public institution
of higher education" means a state
university as defined in
section 3345.011 of the Revised Code, the northeastern Ohio
universities college of
medicine, or a university branch,
technical college, state
community college, community college, or
municipal university established or
operating under Chapter 3345.,
3349., 3354., 3355., 3357., or 3358.
of the Revised
Code.
(B) "State retirement
system" means the public employees
retirement system created
under Chapter 145. of the Revised Code,
the state teachers
retirement system created under
Chapter 3307.
of the
Revised Code, or the school employees
retirement system
created under
Chapter 3309. of the Revised Code.
(C) "Eligible employee" means any
person employed as a full-time employee of a public institution of higher education.
In
all cases of doubt, the board of trustees of the
public
institution of higher education shall determine whether
any person
is an eligible employee for
purposes of this
chapter, and the board's decision shall be
final.
(D) "Electing employee" means any eligible
employee who elects, pursuant to section 3305.05 or 3305.051 of the Revised
Code, to
participate in an
alternative retirement plan provided
pursuant to this chapter
or an
eligible employee who is required to
participate in an alternative retirement plan
pursuant to division
(C)(4) of section 3305.05 or division (F) of section 3305.051 of the Revised
Code.
(E) "Compensation," for purposes of an electing employee, has the
same meaning as the applicable one of the following:
(1) If the electing employee would be subject to Chapter
145.
of the Revised Code had the employee not made an election
pursuant to
section 3305.05 or 3305.051 of the Revised Code,
"earnable salary"
as defined in division (R) of section 145.01 of the Revised
Code;
(2) If the electing employee would be subject to Chapter
3307.
of the Revised Code had the employee not made an election
pursuant to section
3305.05 or 3305.051 of the Revised Code,
"compensation" as
defined in division (L) of section
3307.01 of the Revised
Code;
(3) If the electing employee would be subject to Chapter
3309.
of the Revised Code had the employee not made an election
pursuant to
section 3305.05 or 3305.051 of the Revised Code,
"compensation" as
defined in division (V) of section 3309.01 of the Revised
Code.
(F) "Provider" means an entity designated under section
3305.03
of the Revised Code as a provider of investment options
for
an
alternative retirement plan.
(G) "Terror-free investment option" means an account or fund that excludes from its portfolio any company that is involved in scrutinized business operations as defined in section 137.01 of the Revised Code.
Sec. 3305.02. An alternative retirement program is hereby
established in
accordance with this chapter for the purpose of
providing to eligible employees the opportunity
of
participating in an alternative retirement plan as an
alternative to
participating in a state retirement system. The
employer is
the sponsor of each alternative retirement plan
offered under this
chapter.
Each alternative retirement plan
offered under this program
shall be a defined contribution plan qualified under section
401
(a) of the Internal Revenue
Code that provides retirement and
death benefits through
investment options. The options shall be
offered to electing
employees pursuant to group or individual
contracts, and certificates
issued under group contracts,. The options may include a terror-free investment option and may
include life insurance,
annuities, variable annuities, regulated
investment trusts, pooled
investment funds, or other forms of
investment, at the option of
each
electing employee.
Notwithstanding this chapter, any retirement plan established
by a public
institution of higher education prior to March 31,
1997, as
an alternative to participating in any state retirement
system may continue in
effect and be modified without regard to
this chapter for all employees
at the public
institution eligible
to participate in the plan.
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
units.
(B) The provisions of Chapter 1707. of the Revised Code
shall not apply to tuition
units 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. The program shall offer contributors a reasonable number of options for the investment of contributed funds among which may be at least one terror-free investment option, as defined in section 3305.01 of the Revised Code. The Ohio tuition trust authority annually shall prepare, and deliver to the president of the senate and the speaker of the house of representatives a report regarding the board's efforts to identify and provide a terror-free investment option.
(D) A person may participate simultaneously in both the
Ohio college
savings program and the variable college
savings program.
Section 2. That existing sections 135.143, 148.04, 3305.01, 3305.02, and 3334.02 of the Revised Code are hereby repealed.
Section 3. The sections and items of law contained in this act, and their applications, are severable. If any section or item of law contained in this act, or if any application of any section or item of law contained in this act, is held invalid, the invalidity does not affect other sections or items of law contained in this act and their applications that can be given effect without the invalid section or item of law or application.
Section 4. It is the finding of the General Assembly of the state of Ohio that the Islamic Republic of Iran and the Republic of the Sudan are guilty of advocating genocide, and are unstable and high risk investment locations, and therefore, the General Assembly of the state of Ohio establishes the requirements of this act.
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