130th Ohio General Assembly
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Sub. H. B. No. 151  As Reported by the House Financial Institutions, Real Estate and Securities Committee
As Reported by the House Financial Institutions, Real Estate and Securities Committee

127th General Assembly
Regular Session
2007-2008
Sub. H. B. No. 151


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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