To amend section 135.143 and to enact sections 117.103 and 137.01 to 137.09 of the Revised Code to prohibit any public investor or any asset manager investing on behalf of any public investor from investing in a foreign company with active business ties or operations in or with the Islamic Republic of Iran and to require that any existing investments in such companies be divested in order to protect the public investments of the State of Ohio from global security risk-related losses.

Section 1. That section 135.143 be amended and sections 117.103, 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. 117.103. (A) As used in this section "public investor" and "public fund" have the same meanings as in section 137.01 of the Revised Code.

(B) The auditor of state shall annually do all of the following:

(1) Verify that each public investor has complied with the requirements of Chapter 137. of the Revised Code with regard to the investment of public funds;

(2) Submit a written report of the auditor's findings to the governor, the president of the senate, the speaker of the house, and the chairpersons of the standing committees with primary responsibility for legislation regarding public investors;

(3) If the auditor determines that a public investor has not complied with the requirements of Chapter 137. of the Revised Code, notify the attorney general of the auditor's findings.

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 section:

(A) "Asset manager" means any company that enters into a contract with a public investor for the investment of public funds.

(B) "Asset manager certification report" means the report described in section 137.05 of the Revised Code.

(C) "Business ties or operations" means engaging in commerce in any form, including maintaining, selling, acquiring, developing, owning, possessing, operating, or leasing any equipment, facilities, personnel, products, services, personal or real property, or any other apparatus of business or commerce.

(D) "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, parent company, or affiliate of any of those types of entities, that exists for the purpose of making a profit.

(E) "Independent research provider" means a company that has received approval from the treasurer of state as described in section 137.02 of the Revised Code.

(F) "Iran" means the Islamic republic of Iran.

(G) "Non-publicly-traded foreign company" means any company that is headquartered, domiciled, or incorporated under the laws of any country other than the United States that does not do either of the following anywhere in the world:

(1) Issue securities to the public;

(2) Make available securities for public trade.

(H) "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.

(I) "Public fund" means the assets included in any fund or portfolio that is under the control of, or controlled on behalf of, a public investor.

(J) "Publicly traded foreign company" means any company that is headquartered, domiciled, or incorporated under the laws of any country other than the United States that does either or both of the following anywhere in the world:

(1) Issues securities to the public;

(2) Makes available securities for public trade.

(K) "Social development company" means any of the following:

(1) Any company or entity that is not an agency of the government of Iran that holds a valid, current accreditation as a nongovernmental organization from the united nations department of public information;

(2) A company that has been identified by an independent research provider as a company whose primary purpose in Iran is to provide to the people of Iran goods and services intended to relieve human suffering; to promote health, religious, or spiritual activities; and to provide education for humanitarian purposes;

(3) A company that has been identified by an independent research provider as a company whose primary purpose in Iran is to perform journalistic activities.

(L) "State retirement system" means the public employees retirement system, Ohio police and fire pension fund, state teachers retirement system, school employees retirement system, and state highway patrol retirement system.

Sec. 137.02.  (A)(1) A company may obtain approval from the treasurer of state as an independent research provider for the purposes of section 137.04 of the Revised Code by submitting to the treasurer of state an affidavit that states all of the following:

(a) The company is headquartered, domiciled, or incorporated under the laws of this or any other state, or the United States.

(b) The company specializes in identifying and assessing companies that are exposed to global security risk.

(c) The company offers impartial research on companies' business ties or operations in Iran.

(d) The company has, for at least four consecutive calendar years prior to the date the affidavit is submitted, regularly maintained and provided to clients the information described in division (A)(1)(b) and (c) of this section.

(e) The company does not engage in or provide investment banking, brokerage services, or corporate finance services.

(2) The company shall include with the affidavit the following information:

(a) The name of the company and, if different, the name under which it is registered or organized in the state of its organization;

(b) The state in which it was organized and the date of its formation;

(c) The name and address of an agent for service of any process, notice, or demand on the company;

(d) An address to which interested persons may direct requests for copies of the articles of organization, operating agreement, bylaws, or other charter documents of the company.

(B) The treasurer of state shall approve a company as an independent research provider for the purposes of section 137.04 of the Revised Code if the statements contained in the affidavit are true and the company otherwise complies with the requirements of this section.

(C) The treasurer of state shall compile and make available to public investors a list of the companies approved by the treasurer as independent research providers under this section. The treasurer of state shall update the list on a quarterly basis.

Sec. 137.03.  (A) Each non-publicly-traded foreign company that seeks investment of public funds by a public investor shall submit to the public investor or, if the public investor has contracted with an asset manager for the investment of public funds, to the public investor's asset manager an affidavit that states the following:

(1) That the company does not own or control any property or assets located in Iran;

(2) That the company does not have business ties or operations in or with Iran.

(B) Each non-publicly-traded foreign company in which a public investor's public funds are invested on or after the effective date of this section shall annually submit to the public investor, or, if the public investor has contracted with an asset manager for the investment of public funds, to the public investor's asset manager an affidavit that states the following:

(1) That the company does not own or control any property or asset located in Iran;

(2) That the company does not have business ties or operations in or with Iran.

(C) A non-publicly-traded foreign company that fails to submit an accurate affidavit of the type described in division (A) of this section or otherwise fails to comply with the requirements of this section is a forbidden entity as provided under section 137.04 of the Revised Code.

Sec. 137.04.  (A) Except as provided in division (B) of this section, each of the following entities is a forbidden entity:

(1) Any publicly-traded foreign company that has been identified by an independent research provider as being a company that is one of the following:

(a) A company that has active business ties or operations in or with Iran;

(b) A company that has active business ties or operations with any company domiciled in Iran.

(2) Any non-publicly-traded foreign company that fails to meet the requirements of section 137.03 of the Revised Code;

(3) Any mutual fund, separate account, index, index managed product, or compilation of stocks identified that is not certified by an independent research provider as excluding all forbidden entities described in division (A)(1) of this section.

(B) A social development company is not a forbidden entity.

Sec. 137.05.  (A) No public investor shall invest any public funds by acquiring securities in any forbidden entity.

(B) If a public investor has entered into a contract with an asset manager for the investment of public funds, the public investor shall direct each such asset manager to submit to the investor, at no additional cost to the investor, a report that shall be known as the asset manager certification report certifying both of the following:

(1) That the asset manager has not loaned to, invested in, or otherwise transferred any of the public investor's public funds to a forbidden entity any time after the effective date of this section;

(2) That the asset manager has divested the public investor's public funds in accordance with section 137.06 of the Revised Code.

The asset manager certification report shall be submitted in writing on a form prescribed by the treasurer of state.

(C) A public investor that finds that an asset manager with which the public investor has entered into a contract for the investment of public funds has not complied with the requirements of this chapter shall terminate the contract with the asset manager. The asset manager shall be ineligible to conduct business with any public investor for one year.

Sec. 137.06.  A public investor shall divest or redeem, or, if applicable, shall direct any asset manager with which the public investor has contracted for the investment of public funds to divest or redeem any securities the public investor holds in a forbidden entity or withdraw from an account that includes such entities as described in division (A)(3) of section 137.04 of the Revised Code in accordance with the following schedule:

(A) Within six months after the effective date of this section, divest or redeem at least sixty per cent of the investments that the public investor holds in forbidden entities or withdraw at least sixty per cent of the investments in the forbidden entities held in an account;

(B) Within twelve months after the effective date of this section, divest or redeem one hundred per cent of the investments that the public investor holds in forbidden entities or withdraw one hundred per cent of the investments in the forbidden entities held in an account.

Sec. 137.07.  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 with the requirements of Chapter 137. of the Revised Code. All members and former members of the 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 forbidden entities. A board member, officer, employee, or agent of a public investor shall be indemnified through the public fund in which the public investor has the authority to invest.

Sec. 137.08.  Except as otherwise specified by this chapter or as otherwise specified by the general assembly, this chapter prevails over any conflicting provisions of 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. 137.09.  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.

Section 2.  That existing section 135.143 of the Revised Code is hereby repealed.

Section 3. Each non-publicly-traded foreign company in which a public investor's public funds are invested on the effective date of this act shall, within six months after the effective date of the act, submit to the public investor, or, if the public investor has contracted with an asset manager for the investment of public funds, to the public investor's asset manager an affidavit that states the following:

(1) That the company does not own or control any property or asset located in Iran;

(2) That the company does not have business ties or operations in or with Iran.