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H. B. No. 140 As IntroducedAs Introduced
128th General Assembly | Regular Session | 2009-2010 |
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Representatives Goyal, Schneider
A BILL
To amend section 3345.12 and to enact section 3345.36
of
the Revised Code to permit institutions of
higher
education to facilitate and assist with
entrepreneurial projects for economic development
and to authorize the institutions to enter into
agreements to induce development of, acquire
ownership in, and make or guarantee loans and
incur debt to fund the entrepreneurial projects.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO:
Section 1. That section 3345.12 be amended and section
3345.36 of the Revised Code be enacted to read as follows:
Sec. 3345.12. (A) As used in this section and sections
3345.07 and 3345.11
of the Revised Code, in other sections of the
Revised Code that make reference
to this section unless the
context does not permit, and in related bond
proceedings unless
otherwise expressly provided:
(1) "State university or college" means each of the state
universities identified in section 3345.011 of the Revised Code
and
the northeastern Ohio universities college of medicine, and
includes its board of
trustees.
(2) "Institution of higher education" or "institution" means
a state
university or college, or a community college district,
technical college
district, university branch district, or state
community college, and includes
the applicable board of trustees
or, in the case of a university branch
district, any other
managing authority.
(3) "Housing and dining facilities" means buildings,
structures, and other improvements, and equipment, real estate,
and interests in real estate therefor, to be used for or in
connection with dormitories or other living quarters and
accommodations, or related dining
halls or other food service and
preparation facilities, for
students, members of the faculty,
officers, or employees of the
institution of higher education, and
their spouses and families.
(4) "Auxiliary facilities" means buildings, structures,
and
other improvements, and equipment, real estate, and interests
in
real estate therefor, to be used for or in connection with
student
activity or student service facilities, housing and dining
facilities, dining halls, and
other food service and preparation
facilities, vehicular parking
facilities, bookstores, athletic and
recreational facilities,
faculty centers, auditoriums, assembly
and exhibition halls,
hospitals, infirmaries and other medical and
health facilities,
research, and continuing education facilities.
(5) "Education facilities" means buildings, structures, and
other
improvements, and equipment, real estate, and interests in
real estate
therefor, to be used for or in connection with,
classrooms or other
instructional facilities, libraries,
administrative and office facilities, and
other facilities, other
than auxiliary facilities, to be used directly or
indirectly for
or in connection with the conduct of the institution of higher
education.
(6) "Facilities" means housing and dining facilities,
auxiliary facilities,
or education facilities, and
includes any
one, part of, or any
combination of such facilities, and further
includes site improvements,
utilities, machinery, furnishings, and
any separate or connected buildings,
structures, improvements,
sites, open space and green space areas, utilities
or equipment to
be used in, or in connection with the operation or maintenance
of,
or supplementing or otherwise related to the services or
facilities to be
provided by, such facilities.
(7) "Obligations" means bonds or notes or other evidences
of
obligation, including interest coupons pertaining thereto,
authorized to be issued under this section or section 3345.07,
3345.11,
3354.121, 3355.091, 3357.112, or 3358.10 of the Revised
Code.
(8) "Bond service charges" means principal, including
any
mandatory sinking fund or redemption requirements for the
retirement of
obligations or assurances, interest, or interest
equivalent and
other accreted
amounts, and any call premium
required to be
paid
on obligations or assurances.
(9) "Bond proceedings" means the
resolutions, trust
agreement, indenture, and other
agreements and credit enhancement
facilities, and amendments and
supplements to the foregoing, or
any one or more or combination
thereof, authorizing, awarding, or
providing for the terms and
conditions applicable to, or providing
for the security or liquidity
of, obligations or assurances, and
the provisions
contained in those
obligations or assurances.
(10) "Costs of facilities" means the costs of acquiring,
constructing,
reconstructing, rehabilitating, remodeling,
renovating,
enlarging, improving, equipping, or furnishing
facilities,
and the financing thereof, including the cost of
clearance and
preparation of the site and of any land to be used
in connection
with 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 institution of higher
education or state agency, cost of
engineering, architectural services,
design, plans, specifications
and surveys, estimates of cost, legal fees, fees
and expenses of
trustees, depositories, bond registrars,
and paying agents for the
obligations, cost of issuance of the obligations and financing
costs and fees and expenses of financial advisers and
consultants
in connection therewith, interest on the obligations
from the date
thereof to the time when interest is to be covered
by available
receipts or other sources other than proceeds
of the obligations,
amounts necessary to establish reserves as required by the bond
proceedings, costs of audits, the reimbursements of all moneys
advanced or applied by or borrowed from the institution or others,
from
whatever source provided, including any temporary advances
from state
appropriations, for the payment
of any item or items of
cost of facilities, and all other
expenses necessary or incident
to planning or determining
feasibility or practicability with
respect to 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 facilities, the financing thereof and
the
placing of them in use and operation, including any one,
part
of, or combination of such classes of costs and expenses.
(11) "Available receipts" means all moneys received by the
institution of higher education, including income, revenues, and
receipts from the operation, ownership, or control of facilities
or entrepreneurial projects,
grants, gifts, donations, and pledges
and receipts therefrom,
receipts from fees and charges, and the
proceeds of the sale of
obligations or assurances, including
proceeds of obligations or assurances issued to refund
obligations
or assurances previously issued, but excluding any special fee,
and
receipts therefrom, charged pursuant to division (D) of
section
154.21 of the Revised Code.
(12) "Credit enhancement facilities" has the meaning given in
division (H) of section 133.01 of the Revised Code.
(13) "Financing costs" has the meaning given in division (K)
of
section 133.01 of the Revised Code.
(14) "Interest" or "interest equivalent" has the meaning
given in division
(R) of section 133.01 of the Revised Code.
(15) "Assurances" means bonds, notes, or other evidence of
indebtedness, including interest coupons pertaining thereto,
authorized to be issued under section 3345.36 of the Revised Code.
(16) "Entrepreneurial project" has the same meaning as in
section 3345.36 of the Revised Code.
(17) "Costs of entrepreneurial projects" means any costs
related to the establishment or development of entrepreneurial
projects pursuant to a resolution adopted under section 3345.36 of
the Revised Code.
(B) Obligations issued under section 3345.07 or 3345.11 of
the Revised Code by a state university or college shall be
authorized by resolution of its board of trustees. Obligations
issued by any other institution of higher education shall be
authorized by resolution of its board of trustees, or managing
directors in the
case of certain university branch districts, as
applicable. Sections 9.96 and
9.98 to 9.983 of the Revised Code
apply to obligations and assurances. Obligations and assurances
may be
issued to pay costs of
facilities or entrepreneurial
projects even if the institution anticipates the
possibility of
a
future state appropriation to pay all or a portion of such
costs.
(C) Obligations and assurances shall be secured by a pledge
of and
lien on
all or such part of the available receipts of the
institution of
higher education as it provides for in the bond
proceedings,
excluding moneys raised by taxation and state
appropriations. Such
pledge and
lien may be made prior to all
other expenses,
claims,
or payments, excepting any pledge of such
available
receipts
previously made to the contrary and except as
provided
by any
existing restrictions on the use thereof, or such
pledge
and lien
may be made subordinate to such other expenses,
claims,
or
payments, as provided in the bond proceedings.
Obligations or assurances may be
additionally secured by covenants
of
the institution to make, fix,
adjust, collect, and apply
such
charges, rates, fees, rentals, and
other items of available
receipts as will produce pledged
available receipts sufficient to
meet bond service charges,
reserve, and other requirements
provided for in the bond
proceedings. Notwithstanding this
and
any other sections of the
Revised Code, the holders or owners of
the
obligations or assurances shall not
be given the right and
shall have no right to have
excises or
taxes levied by the
general assembly for the payment
of bond
service charges thereon,
and each such obligation or assurance shall
bear on
its face a
statement to that effect and to the effect
that the
right to such
payment is limited to the available
receipts and
special funds
pledged to such purpose under the bond
proceedings.
All pledged available receipts and funds and the proceeds of
obligations or assurances are
trust funds and, subject to the
provisions of this
section and the applicable
bond proceedings,
shall be held,
deposited, invested, reinvested, disbursed,
applied, and used to
such extent, in such manner, at such times,
and for such
purposes,
as are provided in the bond proceedings.
(D) The bond proceedings for obligations or assurances shall
provide for
the purpose thereof and the principal
amount or
maximum principal
amount, and provide for or authorize
the manner
of determining the
principal maturity or maturities, the
sale
price including any
permitted discount, the interest rate or
rates, which may be a
variable rate or rates, or the
maximum
interest rate, the date of
the obligations or assurances and the
date or dates of payment of interest
thereon, their
denominations, the
manner of sale thereof, and the
establishment
within or without
the state of a place or places of
payment of
bond service charges. The
bond proceedings also shall
provide for
a pledge of and lien on available receipts of the
institution of
higher education as provided in division (C) of
this
section, and
a pledge of and lien on such fund or funds
provided
in the bond
proceedings arising from available receipts,
which
pledges and
liens may provide for parity with obligations or assurances
theretofore or thereafter issued by the institution. The available
receipts so pledged and thereafter received by the institution and
the
funds so pledged are immediately subject to the lien of such
pledge
without any physical delivery thereof or further act, and
the
lien of any such pledge is valid and binding against all
parties
having claims of any kind against the institution,
irrespective of
whether such parties have
notice thereof, and
shall create a perfected security interest for all
purposes of
Chapter 1309. of the Revised Code, without the
necessity for
separation or delivery of funds or for the filing
or recording of
the bond proceedings by which such pledge is
created or any
certificate, statement, or other document with
respect thereto;
and the pledge of such available receipts and
funds shall be
effective and the money therefrom and thereof may
be applied to
the purposes for which pledged without necessity
for any act of
appropriation.
(E) The bond proceedings may contain additional provisions
customary or appropriate to the financing or to the
obligations or
assurances or
to particular obligations and assurances,
including:
(1) The acquisition, construction, reconstruction,
equipment,
furnishing, improvement, operation, alteration,
enlargement,
maintenance, insurance, and repair of facilities or
entrepreneurial projects,
and the duties
of the institution of
higher education with reference thereto;
(2) The terms of the obligations or assurances, including
provisions for
their redemption prior to maturity at the option of
the
institution of higher
education at such price or prices and
under
such
terms and conditions as are provided in the bond
proceedings;
(3) Limitations on the purposes to which the proceeds of
the
obligations or assurances may be applied;
(4) The rates or rentals or other charges for the use of
or
right to use the facilities or entrepreneurial projects financed
by the obligations or assurances, or
other
properties the
revenues or receipts from which are pledged
to the
obligations or
assurances, and rules for assuring any applicable use and
occupancy thereof,
including limitations upon the right to modify
such rates,
rentals, other charges, or regulations;
(5) The use and expenditure of the pledged available
receipts
in such manner and to such extent as shall be
determined, which
may include provision for the payment of the
expenses of
operation, maintenance, and repair of facilities or
entrepreneurial projects so
that such
expenses, or part thereof,
shall be paid or provided as
a charge
prior or subsequent to the
payment of bond service
charges and any
other payments required
to be made by the bond
proceedings;
(6) Limitations on the issuance of additional obligations or
assurances;
(7) The terms of any trust agreement or indenture securing
the obligations or assurances or under which the same may be
issued;
(8) The deposit, investment, and application of funds, and
the safeguarding of funds on hand or on deposit without regard to
Chapter 131. or 135. of the Revised Code, and any bank or trust
company or other financial institution that acts as depository of
any
moneys under the bond
proceedings shall furnish such
indemnifying bonds or pledge such
securities as required by the
bond proceedings or otherwise by
the institution of higher
education;
(9) The binding effect of any or every provision of the
bond
proceedings upon such officer, board, commission, authority,
agency, department, or other person or body as may from time to
time have the authority under law to take such actions as may be
necessary to perform all or any part of the duty required by such
provision;
(10) Any provision that may be made in a trust agreement
or
indenture;
(11) Any other or additional agreements with respect to
the
facilities of the institution of
higher education or its
entrepreneurial projects, their
operation, the available receipts
and funds
pledged, and insurance
of facilities or entrepreneurial
projects and of the institution, its officers and
employees.
(F) Such obligations or assurances may have the seal of the
institution of
higher
education or a facsimile thereof affixed
thereto or
printed
thereon and shall be executed by such officers
as are
designated
in the bond proceedings, which execution may be
by
facsimile
signatures. Any obligations or assurances may be
executed by an
officer who, on
the date of execution, is the
proper officer
although on the date
of such obligations or
assurances such person was not the
proper officer. In
case any
officer whose signature or a
facsimile of whose signature
appears
on any such obligation or assurance
ceases to be such officer
before
delivery thereof, such signature
or facsimile is
nevertheless
valid and sufficient for all
purposes as if the
person had
remained such officer until
such delivery; and in case
the seal of
the
institution has been changed after a facsimile of
the seal has
been
imprinted on such
obligations or assurances,
such facsimile seal continues
to be sufficient as to
such
obligations or assurances and obligations or assurances issued in
substitution or
exchange therefor.
(G) All such obligations or assurances are negotiable
instruments and
securities under Chapter 1308. of the Revised
Code, subject to
the
provisions of the bond proceedings as to
registration. The
obligations or assurances may be issued in
coupon or in registered form, or
both. Provision may be made for
the registration of any
obligations or assurances with coupons
attached thereto as to principal alone
or
as to both principal
and interest, their exchange for
obligations or assurances
so
registered, and for the conversion or reconversion
into
obligations or assurances with coupons attached thereto of any
obligations or assurances
registered as to both principal and
interest, and for reasonable
charges for such registration,
exchange, conversion, and
reconversion.
(H) Pending preparation of definitive obligations or
assurances, the
institution of higher education may issue interim
receipts or
certificates which shall be exchanged for such
definitive
obligations or assurances.
(I) Such obligations or assurances may be secured
additionally by a
trust
agreement or indenture between the
institution of higher education
and a corporate trustee, which may
be any trust company
or bank
having the powers of a trust company
within or without
this state
but authorized to exercise trust
powers within this
state. Any
such agreement or indenture may
contain the
resolution authorizing
the issuance of the
obligations or assurances, any
provisions that
may be
contained
in the bond proceedings as
authorized by this
section,
and other
provisions which are
customary or appropriate
in an
agreement or
indenture of such
type, including:
(1) Maintenance of each pledge, trust agreement, and
indenture, or other instrument comprising part of the bond
proceedings until the institution of
higher education has fully
paid the bond service charges on the
obligations or assurances
secured thereby,
or provision therefor has been made;
(2) In the event of default in any payments required to be
made by the bond proceedings, or any other agreement of the
institution of
higher education made as a
part of the contract
under which
the obligations or assurances were issued, enforcement
of such
payments or
agreement by mandamus, the appointment of a
receiver,
suit in
equity, action at law, or any combination of
the
foregoing;
(3) The rights and remedies of the holders of obligations or
assurances
and
of the trustee, and provisions for protecting and
enforcing
them,
including limitations on rights of individual
holders of
obligations or assurances;
(4) The replacement of any obligations or assurances that
become
mutilated
or are destroyed, lost, or stolen;
(5) Such other provisions as the trustee and the institution
of higher
education agree upon, including limitations,
conditions,
or qualifications relating to any of the foregoing.
(J) Each duty of the institution of
higher education and its
officers or employees, undertaken pursuant to the
bond proceedings
or any related agreement or lease made under authority of
law, is
hereby established as a duty of such
institution, and of each such
officer or employee having authority to
perform such duty,
specially enjoined by law resulting from an office,
trust, or
station within the meaning of section 2731.01 of the
Revised Code.
The persons who are at the time the members of the
board of
trustees or the managing directors of the institution or
its
officers or employees are not liable in their personal capacities
on such obligations or assurances, or lease, or other agreement of
the
institution.
(K) The authority to issue obligations or assurances includes
authority to:
(1) Issue obligations or assurances in the form of bond
anticipation notes
and to
renew them from time to time by the
issuance of new
notes.
Such notes are payable solely from the
available receipts and
funds that may be pledged to the payment of
such bonds, or from
the proceeds of such bonds or renewal notes,
or both, as the
institution of higher education provides in its
resolution
authorizing such notes. Such notes may be additionally
secured
by
covenants of the institution to the effect
that it
will do such or
all things necessary for the issuance of
such
bonds or renewal
notes in appropriate amount, and either
exchange
such bonds or
renewal notes therefor or apply the
proceeds
thereof to the extent
necessary, to make full payment of
the bond
service charges on
such notes at the time or times
contemplated,
as provided in such
resolution. Subject to the
provisions of this
division, all
references to obligations or assurances in
this
section apply to such
anticipation notes.
(2) Issue obligations or assurances to refund, including
funding
and
retirement of, obligations or assurances previously
issued to pay costs of
facilities or entrepreneurial projects.
Such obligations or assurances may be issued in amounts sufficient
for payment of the principal amount of the obligations or
assurances to be so
refunded, any redemption premiums thereon,
principal maturities
of
any obligations or assurances maturing
prior to the redemption of any other
obligations or assurances on
a parity therewith to be so refunded, interest
accrued or to
accrue to the maturity date or dates of redemption
of such
obligations or assurances, and any expenses incurred or to be
incurred
in connection with such refunding or the issuance of the
obligations or assurances.
(L) Obligations and assurances are lawful investments
for
banks, societies
for savings, savings and loan associations,
deposit guarantee
associations, 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
political subdivisions and
taxing districts of this state, the
commissioners of the sinking
fund, the administrator
of workers'
compensation in accordance
with the investment policy
approved by
the bureau of workers'
compensation board of directors pursuant
to
section 4121.12 of the
Revised Code, 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
thereto by any state agency with
respect
to investments by them,
and are also acceptable
as
security for the deposit of public
moneys.
(M) All facilities or entrepreneurial projects purchased,
acquired, constructed, or
owned
by an institution of higher
education, or financed in whole or in
part
by obligations or
assurances issued by an institution, and used for the
purposes of
the
institution or other publicly owned and controlled
college or
university, is
public property used exclusively for a
public
purpose, and such
property and the income therefrom is
exempt
from all taxation and
assessment within this state,
including ad
valorem and excise
taxes. The obligations or assurances, the
transfer thereof,
and the income therefrom, including any profit
made on the sale
thereof, are at all times free from taxation
within the state. The
transfer of tangible personal property by
lease under
authority of this section or section 3345.07, 3345.11,
3345.36,
3354.121, 3355.091, 3357.112, or 3358.10 of the Revised
Code
is
not a sale as used in Chapter 5739. of the
Revised Code.
(N) The authority granted by this section is cumulative
with
the authority granted to
institutions of higher education under
Chapter 154. of the Revised
Code, and nothing in this
section
impairs or limits the authority granted by Chapter 154.
of the
Revised Code. In any lease, agreement, or
commitment made by an
institution of higher education under
Chapter 154. of the Revised
Code, it
may agree to restrict or subordinate any pledge it may
thereafter
make under authority of this section.
(O) Title to lands acquired under this section and
sections
3345.07 and 3345.11 of the Revised Code by a state university or
college shall be taken in the name of the state.
(P) Except where costs of facilities or entrepreneurial
projects are to be paid in whole
or in
part from funds
appropriated by the general assembly,
section
125.81 of the
Revised Code and the requirement for
certification
with respect
thereto under section 153.04 of the
Revised Code
do not apply to
such facilities or entrepreneurial projects.
(Q) A state university or college may sell or lease
lands or
interests in land owned by it or by the state for its use, or
facilities authorized to be acquired or constructed by it under
section 3345.07 or 3345.11 of the Revised Code, to permit the
purchasers or lessees thereof to acquire, construct,
equip,
furnish, reconstruct, alter, enlarge,
remodel, renovate,
rehabilitate, improve, maintain,
repair, or maintain and operate
thereon and to
provide by lease or otherwise to such institution,
facilities authorized in
section 3345.07 or 3345.11 of the Revised
Code or entrepreneurial projects authorized under section 3345.36
of the Revised Code. Such land or
interests therein shall be sold
for such
appraised value, or
leased, and on
such terms as the
board of
trustees determines. All deeds or
other instruments
relating to
such sales or leases shall be executed by
such
officer of the
state university or college as the board of
trustees designates.
The state university or college shall hold,
invest, or use the
proceeds of such sales or leases for the same
purposes for which
proceeds of borrowings may be used under
sections 3345.07
and
3345.11 of the Revised Code or, if the
proceeds relate to the sale or lease of entrepreneurial projects,
for purposes of section 3345.36 of the Revised Code.
(R) An institution of higher education may pledge available
receipts, to
the extent permitted by division (C) of this section
with respect to
obligations, to secure the payments to be made by
it under any lease, lease
with option to purchase, or
lease-purchase agreement authorized under this
section or section
3345.07, 3345.11, 3345.36, 3354.121, 3355.091, 3357.112, or
3358.10
of the
Revised Code.
Sec. 3345.36. (A) For purposes of this section:
(1) "Entrepreneurial project" means an effort to develop or
commercialize technology through research or technology transfer
or investment of real or personal property, or both, including
undivided and other interests therein, acquired by gift or
purchase, constructed, reconstructed, enlarged, improved,
furnished, or equipped, or any combination thereof, by an
institution of higher education or by others.
(2) "Governmental agency" has the same meaning as in section
166.01 of the Revised Code.
(3) "Person" means individuals or entities engaged in
industry, commerce, distribution, or research.
(4) "Institution of higher education" has the same meaning as
in section 3345.12 of the Revised Code.
(5) "Stock or other ownership" means equity or other
ownership rights held or received in return for the grant of
rights to intellectual property developed by an institution of
higher education. "Stock or other ownership" excludes equity or
other ownership rights held or received in return for the
investment of money.
(B) To create or preserve jobs and employment opportunities
and to improve the economic welfare of the people of the state
pursuant to Section 13 of Article VIII, Ohio Constitution, it is
hereby declared to be the public policy of the state for
institutions of higher education to facilitate and assist with
establishing and developing entrepreneurial projects or to assist
and cooperate with any governmental agency in achieving such
purpose. An entrepreneurial project is hereby determined to
qualify as property, structures, equipment, and facilities
described in Section 13 of Article VIII, Ohio Constitution.
In furtherance of such public policy, and pursuant to Section
13 of Article VIII, Ohio Constitution, a board of trustees of an
institution of higher education may do any of the following by
resolution:
(1) Enter into an agreement with persons and with
governmental agencies to induce such persons to acquire,
construct, reconstruct, rehabilitate, renovate, enlarge, improve,
equip, furnish, or otherwise develop entrepreneurial projects;
(2) Acquire stock or other ownership in an entrepreneurial
project or a legal entity formed in connection with an
entrepreneurial project;
(3) Make or guarantee loans and borrow money and issue bonds,
notes, or other evidence of indebtedness to provide moneys for the
acquisition, construction, enlargement, improvement, equipment,
maintenance, repair, or operation of entrepreneurial projects,
provided that such bonds, notes, or other evidence of indebtedness
shall not constitute debt for which the full faith and credit of
the state or an instrumentality or political subdivision of the
state may be pledged and moneys raised by taxation shall not be
obligated or pledged for their repayment.
Section 2. That existing section 3345.12 of the Revised Code
is hereby repealed.
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