To amend sections 133.021 and 3351.07 of the Revised Code to revise the laws regarding designation of the student loan secondary market agency and allocation of private activity bonds.

Section 1. That sections 133.021 and 3351.07 of the Revised Code be amended to read as follows:

Sec. 133.021.  The general assembly hereby finds and declares that the "Tax Reform Act of 1986" (the "Act") establishes a unified volume ceiling on the aggregate amount of private activity bonds that can be issued in each state. The amount of the unified volume ceiling shall be the amount determined as set forth in section 146(d) of the Internal Revenue Code.

The general assembly further finds and declares that the Act requires the state to allocate its volume ceiling according to a specified formula unless a different procedure is established by the governor or general assembly.

The general assembly further finds and declares that pursuant to authorization of state legislation the general assembly has, by division (D)(3) of section 133.02 of the Revised Code, effective October 30, 1989, provided for delegating such function to the governor and for further delegation as therein provided, subject to such prospectively effective actions as may subsequently be taken by the general assembly.

The general assembly further finds and declares that it desires to by legislation provide for an efficient, effective, and equitable procedure under which the state will allocate the unified volume ceiling.

The general assembly therefore finds and declares that it is necessary to create the joint select committee on volume cap to create a process for the allocation of the unified volume ceiling.

(A) Pursuant to section 146(e)(2)(B)(ii) of the Internal Revenue Code, which provides that a state may by law provide a different formula for allocating the state ceiling, there is hereby created the joint select committee on volume cap to provide for the allocation and the reallocation of the unified volume ceiling among the governmental units (or other authorities) in the state having authority to issue tax exempt private activity bonds.

(B) The committee shall consist of eight members. Two members shall be from the house of representatives appointed by the speaker of the house of representatives; two members shall be from the senate appointed by the president of the senate; and four members shall be appointed by the governor. Each member shall be selected for the member's knowledge and experience in tax exempt private activity bonds. The members shall serve at the pleasure of the appointing authority. A vacancy shall be filled in the same manner as the original appointment.

(C) The purpose of the committee shall be to maximize the economic benefits of the unified volume ceiling to all citizens of the state. To this end, the joint select committee on volume cap shall:

(1) Set forth procedures for making allocations, reallocation and carry forward of the state's unified volume ceiling in accordance with the Act;

(2) Develop strategies for allocating and reallocating the unified volume ceiling which are designed to maximize the availability of tax exempt private activity bonds among competing sectors of the state.

(D) To provide for the orderly and prompt issuance of private activity bonds, the committee is authorized to allocate the unified volume ceiling among those governmental units (or other authorities) in the state having authority to issue tax exempt private activity bonds. The committee shall reserve a portion of the unified volume ceiling to be allocated for multi-family rental housing projects. The committee in determination of unified volume ceiling allocations and reallocations shall consider the following:

(1) The interest of the state with regard to long-term economic development, housing, education, redevelopment, and solid waste management;

(2) The projected increase of jobs in the state;

(3) The needs of political subdivisions.

(E) The director of development shall adopt rules in accordance with Chapter 119. of the Revised Code to carry out the purposes of this section.

(F) Any allocation of the state's unified volume ceiling pursuant to this section for the purposes of the issuance of student loan notes shall be awarded only to either of the following:

(1) The nonprofit corporation designated under division (B) of section 3351.07 of the Revised Code organized at the request of the governor, on behalf of the state, pursuant to a letter dated February 3, 2005, and authorized to issue qualified scholarship funding bonds as described in section 150(d) of the Internal Revenue Code of 1986, as amended, or other such entity that may be requested to replace that nonprofit corporation;

(2) The treasurer of state for the purposes of carrying out the student loan program described in Chapter 3366. of the Revised Code.

Sec. 3351.07.  (A) For the purposes of this chapter, "approved lender" means any bank as defined in section 1101.01 of the Revised Code, any domestic savings and loan association as defined in section 1151.01 of the Revised Code, any credit union as defined in section 1733.01 of the Revised Code, any federal credit union established pursuant to federal law, any insurance company organized or authorized to do business in this state, any pension fund eligible under the "Higher Education Amendments of 1968," 82 Stat. 1026, 20 U.S.C.A. 1085, as amended, the secondary market operation designated under division (B) of this section, or any secondary market operation established pursuant to the "Education Amendments of 1972," 86 Stat. 261, 20 U.S.C.A. 1071, as amended, or under the laws of any state.

(B) The governor may designate one nonprofit corporation secondary market operation to be the single nonprofit private agency designated by the state under the "Higher Education Act of 1965," 101 Stat. 347, 20 U.S.C.A. 1085(d)(1)(D), as amended. A The designation in effect on the effective date of this amendment expires December 31, 2009 shall expire on June 30, 2015. Each designation after the effective date of this amendment shall be made by competitive selection and shall be valid for one year five years. The controlling board shall not waive the competitive selection requirement.

(C) The nonprofit corporation designated by the governor under division (B) of this section as the private agency secondary market operation shall be considered to be an agency of the state, in accordance with section 435(d)(1)(F) of the "Higher Education Act of 1965," 101 Stat. 347, 20 U.S.C.A. 1085(d)(1)(F), as amended, exclusively for the purpose of functioning as a secondary student loan market. The corporation shall be considered a state agency only for the purposes of this division and no other division or section of the Revised Code regarding state agencies shall apply to the corporation. No liability or obligation incurred by the corporation shall be considered to be a liability or debt of the state, nor shall the state be construed to act as guarantor of any debt of the corporation.

(D) The nonprofit corporation designated under division (B) of this section shall designate a separate nonprofit corporation to operate exclusively for charitable and educational purposes, complementing and supplementing the designating corporation's secondary market operation for student loans authorized under the "Higher Education Act of 1965," 101 Stat. 347, 20 U.S.C.A. 1085, as amended, and promoting the general health and welfare of the state, the public interest, and a public purpose through improving student assistance programs by expanding access to higher education financing programs for students and families in need of student financial aid. In furtherance of such purposes, the separate nonprofit corporation may do all of the following:

(1) Assist educational institutions in establishing financial aid programs to help students obtain an economical education;

(2) Encourage financial institutions to increase educational opportunities by making funds available to both students and educational institutions;

(3) Make available financial aid that supplements the financial assistance provided by eligible and approved lenders under state and federal programs;

(4) Develop and administer programs that do all of the following:

(a) Provide financial aid and incidental student financial aid information to students and their parents or other persons responsible for paying educational costs of those students at educational institutions;

(b) Provide financial aid and information relating to it to and through educational institutions, enabling those institutions to assist students financially in obtaining an education and fully expanding their intellectual capacity and skills;

(c) Better enable financial institutions to participate in student loan programs and other forms of financial aid, assisting students and educational institutions to increase education excellence and accessibility.

(E) The nonprofit corporation designated under authority of division (D) of this section shall do both of the following:

(1) Establish the criteria, standards, terms, and conditions for participation by students, parents, educational institutions, and financial institutions in that corporation's programs;

(2) Provide the governor a report of its programs and a copy of its audited financial statements not later than one hundred eighty days after the end of each fiscal year of the corporation.

No liability, obligation, or debt incurred by the corporation designated under authority of division (D) of this section or by any person under that corporation's programs shall be, or be considered to be, a liability, obligation, or debt of, or a pledge of the faith and credit of, the state, any political subdivision of the state, or any state-supported or state-assisted institution of higher education, nor shall the state or any political subdivision of the state or any state-supported or state-assisted institution of higher education be or be construed to act as an obligor under or guarantor of any liability, obligation, or debt of that corporation or of any person under that corporation's programs or incur or be construed to have incurred any other liability, obligation, or debt as a result of any acts of the corporation.

(F) The nonprofit corporation designated under authority of division (D) of this section shall not be deemed to qualify by reason of the designation as a guarantor or an eligible lender under sections 435(d) and (j) of the "Higher Education Act of 1965," 101 Stat. 347, 20 U.S.C.A. 1085(d) and (j), as amended.

Section 2. That existing sections 133.021 and 3351.07 of the Revised Code are hereby repealed.