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As Introduced
136th
General Assembly
Regular
Session
H. B. No. 18
2025-2026
Representative Demetriou
Cosponsors: Representatives Fischer,
Johnson, King, Lorenz, Mathews, T., Williams
A
BILL
To
amend sections 145.11, 742.11, 3307.15, 3309.15, 3770.06, and 5505.06
and to enact section 135.146 of the Revised Code
to
address investments in exchange-traded products by the state
retirement systems, to permit the Treasurer of State to invest
certain interim funds in digital assets, and to name this act the
Ohio Strategic Cryptocurrency Reserve Act.
BE
IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO:
Section
1.
That
sections 145.11, 742.11, 3307.15, 3309.15, 3770.06, and 5505.06 be
amended and section 135.146 of the Revised Code be enacted to read as
follows:
Sec.
135.146.
(A)
As used in this section,
(1)
"Digital asset" means a virtual currency, cryptocurrency,
native electronic asset, stablecoin, non-fungible token, or any other
digital-only asset that confers economic, proprietary, or access
rights or powers.
(2)
"Exchange-traded product" means a security, as defined in
section 1707.01 of the Revised Code, that meets any of the following
requirements:
(a)
The security is listed, or authorized for listing, on the New York
stock exchange, the American stock exchange, or the national market
system of the NASDAQ stock market, or any successor to such entities.
(b)
The security is listed, or authorized for listing, on a national
securities exchange or system, or on a tier or segment of such
exchange or system, designated by the United States securities and
exchange commission in rule 146(b) promulgated under section 18(b)(1)
of the Securities Act of 1933.
(c)
The security is listed, or authorized for listing, on a national
securities exchange or system, or on a tier or segment of such
exchange or system, that has listing standards that the division of
securities, on its own initiative or on the basis of an application,
determines by rule are substantially similar to the listing standards
applicable to securities described in division (A)(2)(a) of this
section.
(d)
The security is a security of the same issuer that is equal in
seniority or that is a senior security to a security described in
division (A)(2)(a), (b), or (c) of this section.
(3)
"Private key" means a unique element of cryptographic data
used for signing transactions on a blockchain that is known to the
owner of the unique element.
(4)
"Secure custody solution" means a technological product or
blended product and service that has all of the following
characteristics:
(a)
The private keys that secure digital assets are exclusively known and
accessible by the government entity.
(b)
The private keys that secure digital assets are exclusively contained
within an encrypted environment and are accessible only via
end-to-end encrypted channels.
(c)
The private keys that secure digital assets are never contained by,
accessible by, or controllable via a smartphone.
(d)
Any hardware that contains the private keys that secure digital
assets is maintained in at least two geographically diversified
specially designated secure data centers.
(e)
The secure custody solution enforces a multi-party governance
structure for authorizing transactions, enforces user access
controls, and logs all user-initiated actions.
(f)
The provider of the secure custody solution has implemented a
disaster recovery protocol that ensures customer access to digital
assets in the event the provider becomes unavailable.
(g)
The secure custody solution undergoes regular code audits and
penetration testing from audit firms, and any identified
vulnerabilities are promptly remedied.
(5)
"Qualified custodian" means any federal or state-chartered
bank, trust company, or a company regulated by the state that has
custody of a digital asset for an exchange-traded product.
(B)
Subject to the requirements of this section, the treasurer of state
may invest interim moneys from any of the following funds in digital
assets:
(1)
The general revenue fund;
(2)
The budget stabilization fund created under section 131.43 of the
Revised Code;
(3)
The deferred prizes trust fund created under division (C) of section
3770.06 of the Revised Code.
(C)
The investments in digital assets from any of the funds described in
division (B)(1) to (3) of this section shall not exceed, in the
aggregate, ten per cent of the balance of the fund at the time of the
investment.
(D)
The treasurer of state shall not invest in digital assets that do not
meet both of the following:
(1)
The digital assets are an exchange-traded product.
(2)
The average market capitalization of the digital assets over the
preceding twelve months is at least seven hundred fifty billion
dollars, as determined by the treasurer of state using a commercially
reasonable method.
(E)
Any digital asset acquired as an investment under this section must
be held in one of the following ways:
(1)
Directly by the treasurer of state through the use of a secure
custody solution;
(2)
On behalf of the state by a qualified custodian;
(3)
In the form of an exchange-traded product issued by an investment
company registered under Chapter 1707. of the Revised Code.
(F)
The treasurer of state may loan the digital assets acquired as an
investment under this section to bring further returns to the
applicable fund if the treasurer of state determines that the loan
does not increase the financial risk of the investment.
(G)
The treasurer of state may adopt rules for the purposes of
administering this section.
Sec.
145.11.
(A)
The members of the public employees retirement board shall be the
trustees of the funds created by section 145.23 of the Revised Code.
The board shall have full power to invest the funds. The board and
other fiduciaries shall discharge their duties with respect to the
funds solely in the interest of the participants and beneficiaries;
for the exclusive purpose of providing benefits to participants and
their beneficiaries and defraying reasonable expenses of
administering the public employees retirement system; with care,
skill, prudence, and diligence under the circumstances then
prevailing that a prudent person acting in a like capacity and
familiar with these matters would use in the conduct of an enterprise
of a like character and with like aims; and by diversifying the
investments of the system so as to minimize the risk of large losses,
unless under the circumstances it is clearly prudent not to do so.
The
board, in accordance with its fiduciary duties described under this
section, shall make investment decisions with the sole purpose of
maximizing the return on its investments. The board shall not make an
investment decision with the primary purpose of influencing any
social or environmental policy or attempting to influence the
governance of any corporation.
Nothing
in this section shall be construed to prohibit the board from
investing in an exchange-traded product as defined in section 135.146
of the Revised Code.
To
facilitate investment of the funds, the board may establish a
partnership, trust, limited liability company, corporation, including
a corporation exempt from taxation under the Internal Revenue Code,
100 Stat. 2085, 26 U.S.C. 1, as amended, or any other legal entity
authorized to transact business in this state.
(B)
In exercising its fiduciary responsibility with respect to the
investment of the funds, it shall be the intent of the board to give
consideration to investments that enhance the general welfare of the
state and its citizens where the investments offer quality, return,
and safety comparable to other investments currently available to the
board. In fulfilling this intent, equal consideration shall also be
given to investments otherwise qualifying under this section that
involve minority owned and controlled firms and firms owned and
controlled by women, either alone or in joint venture with other
firms.
The
board shall adopt, in regular meeting, policies, objectives, or
criteria for the operation of the investment program that include
asset allocation targets and ranges, risk factors, asset class
benchmarks, time horizons, total return objectives, and performance
evaluation guidelines. In adopting policies and criteria for the
selection of agents with whom the board may contract for the
administration of the funds, the board shall comply with sections
145.114 and 145.116 of the Revised Code and shall also give equal
consideration to minority owned and controlled firms, firms owned and
controlled by women, and ventures involving minority owned and
controlled firms and firms owned and controlled by women that
otherwise meet the policies and criteria established by the board.
Amendments and additions to the policies and criteria shall be
adopted in regular meeting. The board shall publish its policies,
objectives, and criteria under this provision no less often than
annually and shall make copies available to interested parties.
The
board shall not adopt a policy, or take any action to promote a
policy, under which the board makes investment decisions with the
primary purpose of influencing any social or environmental policy or
attempting to influence the governance of any corporation.
When
reporting on the performance of investments, the board shall comply
with the performance presentation standards established by the
association for investment management and research.
(C)
All investments shall be purchased at current market prices and the
evidences of title of the investments shall be placed in the hands of
the treasurer of state, who is hereby designated as custodian
thereof, or in the hands of the treasurer of state's authorized
agent. Evidences of title of the investments so purchased may be
deposited by the treasurer of state for safekeeping with an
authorized agent, selected by the treasurer of state, who is a
qualified trustee under section 135.18 of the Revised Code. The
treasurer of state or the agent shall collect the principal,
dividends, distributions, and interest thereon as they become due and
payable and place them when so collected into the custodial funds.
The
treasurer of state shall pay for investments purchased by the
retirement board on receipt of written or electronic instructions
from the board or the board's designated agent authorizing the
purchase and pending receipt of the evidence of title of the
investment by the treasurer of state or the treasurer of state's
authorized agent. The board may sell investments held by the board,
and the treasurer of state or the treasurer of state's authorized
agent shall accept payment from the purchaser and deliver evidence of
title of the investment to the purchaser on receipt of written or
electronic instructions from the board or the board's designated
agent authorizing the sale, and pending receipt of the moneys for the
investments. The amount received shall be placed in the custodial
funds. The board and the treasurer of state may enter into agreements
to establish procedures for the purchase and sale of investments
under this division and the custody of the investments.
(D)
No purchase or sale of any investment shall be made under this
section except as authorized by the public employees retirement
board.
(E)
Any statement of financial position distributed by the board shall
include the fair value, as of the statement date, of all investments
held by the board under this section.
Sec.
742.11.
(A)
The members of the board of trustees of the Ohio police and fire
pension fund shall be the trustees of the funds created by section
742.59 of the Revised Code. The board shall have full power to invest
the funds. The board and other fiduciaries shall discharge their
duties with respect to the funds solely in the interest of the
participants and beneficiaries; for the exclusive purpose of
providing benefits to participants and their beneficiaries and
defraying reasonable expenses of administering the Ohio police and
fire pension fund; with care, skill, prudence, and diligence under
the circumstances then prevailing that a prudent person acting in a
like capacity and familiar with these matters would use in the
conduct of an enterprise of a like character and with like aims; and
by diversifying the investments of the disability and pension fund so
as to minimize the risk of large losses, unless under the
circumstances it is clearly prudent not to do so.
The
board, in accordance with its fiduciary duties described under this
section, shall make investment decisions with the sole purpose of
maximizing the return on its investments. The board shall not make an
investment decision with the primary purpose of influencing any
social or environmental policy or attempting to influence the
governance of any corporation.
Nothing
in this section shall be construed to prohibit the board from
investing in an exchange-traded product as defined in section 135.146
of the Revised Code.
To
facilitate investment of the funds, the board may establish a
partnership, trust, limited liability company, corporation, including
a corporation exempt from taxation under the Internal Revenue Code,
100 Stat. 2085, 26 U.S.C.A. 1, as amended, or any other legal entity
authorized to transact business in this state.
(B)
In exercising its fiduciary responsibility with respect to the
investment of the funds, it shall be the intent of the board to give
consideration to investments that enhance the general welfare of the
state and its citizens where the investments offer quality, return,
and safety comparable to other investments currently available to the
board. In fulfilling this intent, equal consideration shall be given
to investments otherwise qualifying under this section that involve
minority owned and controlled firms and firms owned and controlled by
women, either alone or in joint venture with other firms.
The
board shall adopt, in regular meeting, policies, objectives, or
criteria for the operation of the investment program that include
asset allocation targets and ranges, risk factors, asset class
benchmarks, time horizons, total return objectives, and performance
evaluation guidelines. In adopting policies and criteria for the
selection of agents with whom the board may contract for the
administration of the funds, the board shall comply with sections
742.114 and 742.116 of the Revised Code and shall also give equal
consideration to minority owned and controlled firms, firms owned and
controlled by women, and joint ventures involving minority owned and
controlled firms and firms owned and controlled by women that
otherwise meet the policies and criteria established by the board.
Amendments and additions to the policies and criteria shall be
adopted in regular meeting. The board shall publish its policies,
objectives, and criteria under this provision no less often than
annually and shall make copies available to interested parties.
The
board shall not adopt a policy, or take any action to promote a
policy, under which the board makes investment decisions with the
primary purpose of influencing any social or environmental policy or
attempting to influence the governance of any corporation.
When
reporting on the performance of investments, the board shall comply
with the performance presentation standards established by the
association for investment management and research.
(C)
All bonds, notes, certificates, stocks, or other evidences of
investments purchased by the board shall be delivered to the
treasurer of state, who is hereby designated as custodian thereof, or
to the treasurer of state's authorized agent, and the treasurer of
state or the agent shall collect the principal, interest, dividends,
and distributions that become due and payable and place them when so
collected into the custodial funds. Evidences of title of the
investments may be deposited by the treasurer of state for
safekeeping with an authorized agent, selected by the treasurer of
state, who is a qualified trustee under section 135.18 of the Revised
Code. The treasurer of state shall pay for the investments purchased
by the board on receipt of written or electronic instructions from
the board or the board's designated agent authorizing the purchase
and pending receipt of the evidence of title of the investment by the
treasurer of state or the treasurer of state's authorized agent. The
board may sell investments held by the board, and the treasurer of
state or the treasurer of state's authorized agent shall accept
payment from the purchaser and deliver evidence of title of the
investment to the purchaser on receipt of written or electronic
instructions from the board or the board's designated agent
authorizing the sale, and pending receipt of the moneys for the
investments. The amount received shall be placed into the custodial
funds. The board and the treasurer of state may enter into agreements
to establish procedures for the purchase and sale of investments
under this division and the custody of the investments.
(D)
All of the board's business shall be transacted, all its funds shall
be invested, all warrants for money drawn and payments shall be made,
and all of its cash, securities, and other property shall be held, in
the name of the board or its nominee, provided that nominees are
authorized by board resolution for the purpose of facilitating the
ownership and transfer of investments.
(E)
No purchase or sale of any investment shall be made under this
section except as authorized by the board of trustees of the Ohio
police and fire pension fund.
(F)
Any statement of financial position distributed by the board shall
include the fair value, as of the statement date, of all investments
held by the board under this section.
Sec.
3307.15.
(A)
The members of the state teachers retirement board shall be the
trustees of the funds created by section 3307.14 of the Revised Code.
The board shall have full power to invest the funds. The board and
other fiduciaries shall discharge their duties with respect to the
funds solely in the interest of the participants and beneficiaries;
for the exclusive purpose of providing benefits to participants and
their beneficiaries and defraying reasonable expenses of
administering the system; with care, skill, prudence, and diligence
under the circumstances then prevailing that a prudent person acting
in a like capacity and familiar with these matters would use in the
conduct of an enterprise of a like character and with like aims; and
by diversifying the investments of the system so as to minimize the
risk of large losses, unless under the circumstances it is clearly
prudent not to do so.
The
board, in accordance with its fiduciary duties described under this
section, shall make investment decisions with the sole purpose of
maximizing the return on its investments. The board shall not make an
investment decision with the primary purpose of influencing any
social or environmental policy or attempting to influence the
governance of any corporation.
Nothing
in this section shall be construed to prohibit the board from
investing in an exchange-traded product as defined in section 135.146
of the Revised Code.
To
facilitate investment of the funds, the board may establish a
partnership, trust, limited liability company, corporation, including
a corporation exempt from taxation under the Internal Revenue Code,
100 Stat. 2085, 26 U.S.C. 1, as amended, or any other legal entity
authorized to transact business in this state.
(B)
In exercising its fiduciary responsibility with respect to the
investment of the funds, it shall be the intent of the board to give
consideration to investments that enhance the general welfare of the
state and its citizens where the investments offer quality, return,
and safety comparable to other investments currently available to the
board. In fulfilling this intent, equal consideration shall also be
given to investments otherwise qualifying under this section that
involve minority owned and controlled firms and firms owned and
controlled by women, either alone or in joint venture with other
firms.
The
board shall adopt, in regular meeting, policies, objectives, or
criteria for the operation of the investment program that include
asset allocation targets and ranges, risk factors, asset class
benchmarks, time horizons, total return objectives, and performance
evaluation guidelines. In adopting policies and criteria for the
selection of agents with whom the board may contract for the
administration of the funds, the board shall comply with sections
3307.152 and 3307.154 of the Revised Code and shall also give equal
consideration to minority owned and controlled firms, firms owned and
controlled by women, and ventures involving minority owned and
controlled firms and firms owned and controlled by women that
otherwise meet the policies and criteria established by the board.
Amendments and additions to the policies and criteria shall be
adopted in regular meeting. The board shall publish its policies,
objectives, and criteria under this provision no less often than
annually and shall make copies available to interested parties.
The
board shall not adopt a policy, or take any action to promote a
policy, under which the board makes investment decisions with the
primary purpose of influencing any social or environmental policy or
attempting to influence the governance of any corporation.
When
reporting on the performance of investments, the board shall comply
with the performance presentation standards established by the CFA
institute.
(C)
All bonds, notes, certificates, stocks, or other evidences of
investments purchased by the board shall be delivered to the
treasurer of state, who is hereby designated as custodian thereof, or
to the treasurer of state's authorized agent, and the treasurer of
state or the agent shall collect the principal, interest, dividends,
and distributions that become due and payable and place them when so
collected into the custodial funds. Evidences of title of the
investments may be deposited by the treasurer of state for
safekeeping with an authorized agent, selected by the treasurer of
state, who is a qualified trustee under section 135.18 of the Revised
Code. The treasurer of state shall pay for the investments purchased
by the board on receipt of written or electronic instructions from
the board or the board's designated agent authorizing the purchase
and pending receipt of the evidence of title of the investment by the
treasurer of state or the treasurer of state's authorized agent. The
board may sell investments held by the board, and the treasurer of
state or the treasurer of state's authorized agent shall accept
payment from the purchaser and deliver evidence of title of the
investment to the purchaser on receipt of written or electronic
instructions from the board or the board's designated agent
authorizing the sale, and pending receipt of the moneys for the
investments. The amount received shall be placed into the custodial
funds. The board and the treasurer of state may enter into agreements
to establish procedures for the purchase and sale of investments
under this division and the custody of the investments.
(D)
No purchase or sale of any investment shall be made under this
section except as authorized by the board.
(E)
Any statement of financial position distributed by the board shall
include the fair value, as of the statement date, of all investments
held by the board under this section.
Sec.
3309.15.
(A)
The members of the school employees retirement board shall be the
trustees of the funds created by section 3309.60 of the Revised Code.
The board shall have full power to invest the funds. The board and
other fiduciaries shall discharge their duties with respect to the
funds solely in the interest of the participants and beneficiaries;
for the exclusive purpose of providing benefits to participants and
their beneficiaries and defraying reasonable expenses of
administering the school employees retirement system; with care,
skill, prudence, and diligence under the circumstances then
prevailing that a prudent person acting in a like capacity and
familiar with such matters would use in the conduct of an enterprise
of a like character and with like aims; and by diversifying the
investments of the system so as to minimize the risk of large losses,
unless under the circumstances it is clearly prudent not to do so.
The
board, in accordance with its fiduciary duties described under this
section, shall make investment decisions with the sole purpose of
maximizing the return on its investments. The board shall not make an
investment decision with the primary purpose of influencing any
social or environmental policy or attempting to influence the
governance of any corporation.
Nothing
in this section shall be construed to prohibit the board from
investing in an exchange-traded product as defined in section 135.146
of the Revised Code.
The
board may establish a partnership, trust, limited liability company,
corporation, including a corporation exempt from taxation under the
Internal Revenue Code, 100 Stat. 2085, 26 U.S.C.A. 1, as amended, or
any other legal entity authorized to transact business in this state.
(B)
In exercising its fiduciary responsibility with respect to the
investment of the funds, it shall be the intent of the board to give
consideration to investments that enhance the general welfare of the
state and its citizens where the investments offer quality, return,
and safety comparable to other investments currently available to the
board. In fulfilling this intent, equal consideration shall also be
given to investments otherwise qualifying under this section that
involve minority owned and controlled firms and firms owned and
controlled by women, either alone or in joint venture with other
firms.
The
board shall adopt, in regular meeting, policies, objectives, or
criteria for the operation of the investment program that include
asset allocation targets and ranges, risk factors, asset class
benchmarks, time horizons, total return objectives, and performance
evaluation guidelines. In adopting policies and criteria for the
selection of agents with whom the board may contract for the
administration of the funds, the board shall comply with sections
3309.157 and 3309.159 of the Revised Code and shall also give equal
consideration to minority owned and controlled firms, firms owned and
controlled by women, and ventures involving minority owned and
controlled firms and firms owned and controlled by women that
otherwise meet the policies and criteria established by the board.
Amendments and additions to the policies and criteria shall be
adopted in regular meeting. The board shall publish its policies,
objectives, and criteria under this provision no less often than
annually and shall make copies available to interested parties.
The
board shall not adopt a policy, or take any action to promote a
policy, under which the board makes investment decisions with the
primary purpose of influencing any social or environmental policy or
attempting to influence the governance of any corporation.
If
the board contracts with a person, including an agent or investment
manager, for the management or investment of the funds, the board
shall require the person to comply with the global investment
performance standards established by the chartered financial analyst
institute, or a successor organization, when reporting on the
performance of investments.
(C)
All evidences of title of investments purchased by the board under
this section shall be delivered to the treasurer of state, who is
hereby designated as custodian thereof, or to the treasurer of
state's authorized agent, and the treasurer of state or the agent
shall collect principal, interest, dividends, and distributions that
become due and payable and place the same when so collected into the
custodial funds. Evidences of title of the investments may be
deposited by the treasurer of state for safekeeping with an
authorized agent, selected by the treasurer of state, who is a
qualified trustee under section 135.18 of the Revised Code. The
treasurer of state shall pay for the investments purchased by the
board pending receipt of the evidence of title of the investments by
the treasurer of state or to the treasurer of state's authorized
agent, and on receipt of written or electronic instructions from the
board or the board's designated agent authorizing the purchase. The
board may sell any investments held by the board, and the treasurer
of state or the treasurer of state's authorized agent shall accept
payment from the purchaser and deliver evidence of title of the
investment to the purchaser on receipt of written or electronic
instructions from the board or the board's designated agent
authorizing the sale, and pending receipt of the moneys for the
investments. The amount received shall be placed into the custodial
funds. The board and the treasurer of state may enter into agreements
to establish procedures for the purchase and sale of investments
under this division and the custody of the investment.
(D)
No purchase or sale of any investment shall be made under this
section except as authorized by the school employees retirement
board.
(E)
Any statement of financial position distributed by the board shall
include the fair value, as of the statement date, of all investments
held by the board under this section.
Sec.
3770.06.
(A)
There is hereby created the state lottery gross revenue fund, which
shall be in the custody of the treasurer of state but shall not be
part of the state treasury. All gross revenues received from sales of
lottery tickets, fines, fees, and related proceeds in connection with
the statewide lottery, all gross proceeds of lottery sports gaming
described in sections 3770.23 to 3770.25 of the Revised Code, and all
gross proceeds from statewide joint lottery games shall be deposited
into the fund. The treasurer of state shall invest any portion of the
fund not needed for immediate use in the same manner as, and subject
to all provisions of law with respect to the investment of, state
funds
,
and as permitted by section 135.146 of the Revised Code
.
The treasurer of state shall disburse money from the fund on order of
the director of the state lottery commission or the director's
designee.
Except
for gross proceeds from statewide joint lottery games, all revenues
of the state lottery gross revenue fund that are not paid to holders
of winning lottery tickets, that are not required to meet short-term
prize liabilities, that are not credited to lottery sales agents in
the form of bonuses, commissions, or reimbursements, that are not
paid to financial institutions to reimburse those institutions for
sales agent nonsufficient funds, and that are collected from sales
agents for remittance to insurers under contract to provide sales
agent bonding services shall be transferred to the state lottery
fund, which is hereby created in the state treasury. In addition, all
revenues of the state lottery gross revenue fund that represent the
gross proceeds from the statewide joint lottery games and that are
not paid to holders of winning lottery tickets, that are not required
to meet short-term prize liabilities, that are not credited to
lottery sales agents in the form of bonuses, commissions, or
reimbursements, and that are not necessary to cover operating
expenses associated with those games or to otherwise comply with the
agreements signed by the governor that the director enters into under
division (J) of section 3770.02 of the Revised Code or the rules the
commission adopts under division (B)(5) of section 3770.03 of the
Revised Code shall be transferred to the state lottery fund. All
investment earnings of the fund shall be credited to the fund. Moneys
shall be disbursed from the fund pursuant to vouchers approved by the
director. Total disbursements for monetary prize awards to holders of
winning lottery tickets in connection with the statewide lottery,
other than lottery sports gaming, and purchases of goods and services
awarded as prizes to holders of winning lottery tickets shall be of
an amount equal to at least fifty per cent of the total revenue
accruing from the sale of lottery tickets.
(B)
Pursuant to Section 6 of Article XV, Ohio Constitution, there is
hereby established in the state treasury the lottery profits
education fund. Whenever, in the judgment of the director of the
state lottery commission, the amount to the credit of the state
lottery fund that does not represent proceeds from statewide joint
lottery games is in excess of that needed to meet the maturing
obligations of the commission and as working capital for its further
operations, the director of the state lottery commission shall
recommend the amount of the excess to be transferred to the lottery
profits education fund, and the director of budget and management may
transfer the excess to the lottery profits education fund in
connection with the statewide lottery. In addition, whenever, in the
judgment of the director of the state lottery commission, the amount
to the credit of the state lottery fund that represents proceeds from
statewide joint lottery games equals the entire net proceeds of those
games as described in division (B)(5) of section 3770.03 of the
Revised Code and the rules adopted under that division, the director
of the state lottery commission shall recommend the amount of the
proceeds to be transferred to the lottery profits education fund, and
the director of budget and management may transfer those proceeds to
the lottery profits education fund. Investment earnings of the
lottery profits education fund shall be credited to the fund.
The
lottery profits education fund shall be used solely for the support
of elementary, secondary, vocational, and special education programs
as determined in appropriations made by the general assembly, or as
provided in applicable bond proceedings for the payment of debt
service on obligations issued to pay costs of capital facilities,
including those for a system of common schools throughout the state
pursuant to section 2n of Article VIII, Ohio Constitution. When
determining the availability of money in the lottery profits
education fund, the director of budget and management may consider
all balances and estimated revenues of the fund.
(C)
There is hereby established in the state treasury the deferred prizes
trust fund. With the approval of the director of budget and
management, an amount sufficient to fund annuity prizes shall be
transferred from the state lottery fund and credited to the trust
fund. The treasurer of state shall credit all earnings arising from
investments purchased under this division to the trust fund. Within
sixty days after the end of each fiscal year, the treasurer of state
shall certify to the director of budget and management whether the
actuarial amount of the trust fund is sufficient over the fund's life
for continued funding of all remaining deferred prize liabilities as
of the last day of the fiscal year just ended. Also, within that
sixty days, the director of budget and management shall certify the
amount of investment earnings necessary to have been credited to the
trust fund during the fiscal year just ending to provide for such
continued funding of deferred prizes. Any earnings credited in excess
of the latter certified amount shall be transferred to the lottery
profits education fund.
To
provide all or a part of the amounts necessary to fund deferred
prizes awarded by the commission in connection with the statewide
lottery, the treasurer of state, in consultation with the commission,
may invest moneys contained in the deferred prizes trust fund which
represents proceeds from the statewide lottery in obligations of the
type permitted for the investment of state funds but whose maturities
are thirty years or less. Notwithstanding the requirements of any
other section of the Revised Code, to provide all or part of the
amounts necessary to fund deferred prizes awarded by the commission
in connection with statewide joint lottery games, the treasurer of
state, in consultation with the commission, may invest moneys in the
trust fund which represent proceeds derived from the statewide joint
lottery games in accordance with the rules the commission adopts
under division (B)(5) of section 3770.03 of the Revised Code.
Investments of the trust fund are not subject to the provisions of
division (A)(11) of section 135.143 of the Revised Code limiting to
twenty-five per cent the amount of the state's total average
portfolio that may be invested in debt interests other than
commercial paper and limiting to five per cent the amount that may be
invested in debt interests, including commercial paper, of a single
issuer.
All
purchases made under this division shall be effected on a delivery
versus payment method and shall be in the custody of the treasurer of
state.
The
treasurer of state may retain an investment advisor, if necessary.
The commission shall pay any costs incurred by the treasurer of state
in retaining an investment advisor.
(D)
The auditor of state shall conduct annual audits of all funds and any
other audits as the auditor of state or the general assembly
considers necessary. The auditor of state may examine all records,
files, and other documents of the commission, and records of lottery
sales agents that pertain to their activities as agents, for purposes
of conducting authorized audits.
(E)
The state lottery commission shall establish an internal audit plan
before the beginning of each fiscal year, subject to the approval of
the office of internal audit in the office of budget and management.
At the end of each fiscal year, the commission shall prepare and
submit an annual report to the office of internal audit for the
office's review and approval, specifying the internal audit work
completed by the end of that fiscal year and reporting on compliance
with the annual internal audit plan.
(F)
Whenever, in the judgment of the director of budget and management,
an amount of net state lottery proceeds is necessary to be applied to
the payment of debt service on obligations, all as defined in
sections 151.01 and 151.03 of the Revised Code, the director shall
transfer that amount directly from the state lottery fund or from the
lottery profits education fund to the bond service fund defined in
those sections. The provisions of this division are subject to any
prior pledges or obligation of those amounts to the payment of bond
service charges as defined in division (C) of section 3318.21 of the
Revised Code, as referred to in division (B) of this section.
Sec.
5505.06.
(A)
The members of the state highway patrol retirement board shall be the
trustees of the funds created by section 5505.03 of the Revised Code.
The board shall have full power to invest the funds. The board and
other fiduciaries shall discharge their duties with respect to the
funds solely in the interest of the participants and beneficiaries;
for the exclusive purpose of providing benefits to participants and
their beneficiaries and defraying reasonable expenses of
administering the system; with care, skill, prudence, and diligence
under the circumstances then prevailing that a prudent person acting
in a like capacity and familiar with these matters would use in the
conduct of an enterprise of a like character and with like aims; and
by diversifying the investments of the system so as to minimize the
risk of large losses, unless under the circumstances it is clearly
prudent not to do so.
The
board, in accordance with its fiduciary duties described under this
section, shall make investment decisions with the sole purpose of
maximizing the return on its investments. The board shall not make an
investment decision with the primary purpose of influencing any
social or environmental policy or attempting to influence the
governance of any corporation.
Nothing
in this section shall be construed to prohibit the board from
investing in an exchange-traded product as defined in section 135.146
of the Revised Code.
To
facilitate investment of the funds, the board may establish a
partnership, trust, limited liability company, corporation, including
a corporation exempt from taxation under the Internal Revenue Code,
100 Stat. 2085, 26 U.S.C. 1, as amended, or any other legal entity
authorized to transact business in this state.
(B)
In exercising its fiduciary responsibility with respect to the
investment of the funds, it shall be the intent of the board to give
consideration to investments that enhance the general welfare of the
state and its citizens where the investments offer quality, return,
and safety comparable to other investments currently available to the
board. In fulfilling this intent, equal consideration shall be given
to investments otherwise qualifying under this section that involve
minority owned and controlled firms and firms owned and controlled by
women, either alone or in joint venture with other firms.
The
board shall adopt, in regular meeting, policies, objectives, or
criteria for the operation of the investment program that include
asset allocation targets and ranges, risk factors, asset class
benchmarks, time horizons, total return objectives, and performance
evaluation guidelines. In adopting policies and criteria for the
selection of agents with whom the board may contract for the
administration of the funds, the board shall comply with sections
5505.068 and 5505.0610 of the Revised Code and shall also give equal
consideration to minority owned and controlled firms, firms owned and
controlled by women, and joint ventures involving minority owned and
controlled firms and firms owned and controlled by women that
otherwise meet the policies and criteria established by the board.
Amendments and additions to the policies and criteria shall be
adopted in regular meeting. The board shall publish its policies,
objectives, and criteria under this provision no less often than
annually and shall make copies available to interested parties.
The
board shall not adopt a policy, or take any action to promote a
policy, under which the board makes investment decisions with the
primary purpose of influencing any social or environmental policy or
attempting to influence the governance of any corporation.
When
reporting on the performance of investments, the board shall comply
with the performance presentation standards established by the
association for investment management and research.
(C)
All evidences of title of the investments purchased by the board
shall be delivered to the treasurer of state, who is hereby
designated as the custodian thereof, or to the treasurer of state's
authorized agent. Evidences of title of the investments may be
deposited by the treasurer of state for safekeeping with an
authorized agent, selected by the treasurer of state, who is a
qualified trustee under section 135.18 of the Revised Code. The
treasurer of state shall collect the principal, interest, dividends,
and distributions that become due and payable and, when collected,
shall credit them to the custodial funds.
The
treasurer of state shall pay for the investments purchased by the
board on receipt of written or electronic instructions from the board
or the board's designated agent authorizing the purchase and pending
receipt of the evidence of title of the investment by the treasurer
of state or the treasurer of state's authorized agent. The board may
sell investments held by the board, and the treasurer of state or the
treasurer of state's authorized agent shall accept payment from the
purchaser and deliver evidence of title of the investment to the
purchaser on receipt of written or electronic instructions from the
board or the board's designated agent authorizing the sale, and
pending receipt of the moneys for the investments. The amount
received shall be placed in the custodial funds. The board and the
treasurer of state may enter into agreements to establish procedures
for the purchase and sale of investments under this division and the
custody of the investments.
(D)
All of the board's business shall be transacted, all its funds shall
be invested, all warrants for money drawn and payments shall be made,
and all of its cash, securities, and other property shall be held, in
the name of the board or its nominee, provided that nominees are
authorized by board resolution for the purpose of facilitating the
ownership and transfer of investments.
(E)
No purchase or sale of any investment shall be made under this
section except as authorized by the board.
(F)
Any statement of financial position distributed by the board shall
include the fair value, as of the statement date, of all investments
held by the board under this section.
Section
2.
That
existing sections 145.11, 742.11, 3307.15, 3309.15, 3770.06, and
5505.06 of the Revised Code are hereby repealed.
Section
3.
This
act shall be known as the Ohio Strategic Cryptocurrency Reserve Act.