As Introduced

128th General Assembly Regular Session 2009-2010

H. B. No. 259

Representative Batchelder 

Cosponsors: Representatives Blessing, Derickson, Stautberg, Combs, Evans, Huffman, Boose, Hall, Adams, R., Domenick, Morgan, Bacon, Mecklenborg, Grossman, Boyd, Stebelton, Balderson, Ruhl, Jones, Wachtmann, McClain, Blair, Uecker, Snitchler, Zehringer, Amstutz, Jordan 

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A BILL

To amend sections 109.579, 4121.12, 4121.79,

1

4123.01, 4123.34, 4123.351, 4123.412, 4123.44,

2

4123.442, 4123.444, 4123.445, 4127.05, 4131.03,

3

and 4131.13, to amend, for the purpose of

4

adopting new section numbers as indicated in

5

parentheses, sections 4123.443 (4123.448),

6

4123.444 (4123.445), and 4123.445 (4123.446), and

7

to enact new sections 4123.443 and 4123.444 and

8

section 4123.447 of the Revised Code to specify

9

the classes of investments in which the

10

Administrator of Workers' Compensation may invest

11

the funds specified in the Workers' Compensation

12

Law and to require the Administrator to have

13

criminal records checks conducted for employees of

14

investment consultants with whom the Administrator

15

contracts to facilitate the investment of those

16

funds.

17

BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO:

Section 1. That sections 109.579, 4121.12, 4121.79, 4123.01,	18
4123.34, 4123.351, 4123.412, 4123.44, 4123.442, 4123.444,	19
4123.445, 4127.05, 4131.03, and 4131.13 be amended, sections	20
4123.443 (4123.448), 4123.444 (4123.445), and 4123.445 (4123.446)	21
be amended for the purpose of adopting new section numbers as	22
indicated in parentheses, and new sections 4123.443 and 4123.444	23
and section 4123.447 of the Revised Code be enacted to read as	24
follows:	25

Sec. 109.579.  (A) On receipt of a request pursuant to	26
division (B) of section 4123.4444123.445 of the Revised Code, a	27
completed form prescribed pursuant to division (C)(1) of this	28
section, and a set of fingerprint impressions obtained in the	29
manner described in division (C)(2) of this section, the	30
superintendent of the bureau of criminal identification and	31
investigation shall conduct a criminal records check in the manner	32
described in division (B) of this section to determine whether any	33
information exists that indicates that the person who is the	34
subject of the request previously has been convicted of or pleaded	35
guilty to any criminal offense involving theft, receiving stolen	36
property, embezzlement, forgery, fraud, passing bad checks, money	37
laundering, drug trafficking, or any criminal offense involving	38
money or securities, as set forth in Chapters 2909., 2911., 2913.,	39
2915., 2921., 2923., and 2925. of the Revised Code or other law of	40
this state, or the laws of any other state or of the United States	41
that are substantially equivalent to those offenses.	42

(B) The superintendent shall conduct a criminal records check	43
pursuant to division (A) of this section as follows:	44

(1) The superintendent shall review or cause to be reviewed	45
any relevant information gathered and compiled by the bureau under	46
division (A) of section 109.57 of the Revised Code that relates to	47
the person who is the subject of the request, including any	48
relevant information contained in records that have been sealed	49
under section 2953.32 of the Revised Code.	50

(2) If the request received by the superintendent asks for	51
information from the federal bureau of investigation, the	52
superintendent shall request from the federal bureau of	53
investigation any information it has with respect to the person	54
who is the subject of the request. The superintendent shall review	55
or cause to be reviewed any information that the superintendent	56
receives from the federal bureau of investigation.	57

(3) The superintendent shall forward the results of a	58
criminal records check conducted pursuant to this division to the	59
administrator of workers' compensation.	60

(C)(1) The superintendent shall prescribe a form to obtain	61
the information necessary to conduct a criminal records check from	62
any person for whom a criminal records check is requested pursuant	63
to division (B) of section 4123.4444123.445 of the Revised Code.	64
The form that the superintendent prescribes pursuant to this	65
division may be in a tangible format, in an electronic format, or	66
in both tangible and electronic formats.	67

(2) The superintendent shall prescribe standard impression	68
sheets to obtain the fingerprint impressions of any person for	69
whom a criminal records check is requested pursuant to section	70
4123.4444123.445 of the Revised Code. Any person for whom the	71
administrator requests the superintendent to conduct a criminal	72
records check pursuant to that section shall have the person's	73
fingerprint impressions made at a county sheriff's office, a	74
municipal police department, or any other entity with the ability	75
to make fingerprint impressions on the standard impression sheets	76
prescribed by the superintendent. The office, department, or	77
entity may charge the person a reasonable fee for making the	78
impressions. The standard impression sheets the superintendent	79
prescribes pursuant to this division may be in a tangible format,	80
in an electronic format, or in both tangible and electronic	81
formats.	82

(3) The superintendent may prescribe methods of forwarding	83
fingerprint impressions and information necessary to conduct a	84
criminal records check. The methods shall include, but are not	85
limited to, electronic methods.	86

(D) A determination whether any information exists that	87
indicates that a person previously has been convicted of or	88
pleaded guilty to any offense listed or described in division (A)	89
of this section that the superintendent makes pursuant to	90
information considered in a criminal records check under this	91
section is valid for the person who is the subject of that	92
criminal records check for a period of one year after the date the	93
superintendent makes that determination.	94

(E) The superintendent shall prescribe and charge a	95
reasonable fee for providing a criminal records check requested	96
under section 4123.4444123.445 of the Revised Code. If another	97
request for a criminal records check is made under this section	98
for a person for whom a valid determination under division (D) of	99
this section is available, the superintendent shall provide the	100
determination for a reduced fee.	101

Sec. 4121.12.  (A) There is hereby created the bureau of	102
workers' compensation board of directors consisting of eleven	103
members to be appointed by the governor with the advice and	104
consent of the senate. One member shall be an individual who, on	105
account of the individual's previous vocation, employment, or	106
affiliations, can be classed as a representative of employees; two	107
members shall be individuals who, on account of their previous	108
vocation, employment, or affiliations, can be classed as	109
representatives of employee organizations and at least one of	110
these two individuals shall be a member of the executive committee	111
of the largest statewide labor federation; three members shall be	112
individuals who, on account of their previous vocation,	113
employment, or affiliations, can be classed as representatives of	114
employers, one of whom represents self-insuring employers, one of	115
whom is a state fund employer who employs one hundred or more	116
employees, and one of whom is a state fund employer who employs	117
less than one hundred employees; two members shall be individuals	118
who, on account of their vocation, employment, or affiliations,	119
can be classed as investment and securities experts who have	120
direct experience in the management, analysis, supervision, or	121
investment of assets and are residents of this state; one member	122
who shall be a certified public accountant; one member who shall	123
be an actuary who is a member in good standing with the American	124
academy of actuaries or who is an associate or fellow with the	125
society of actuaries; and one member shall represent the public	126
and also be an individual who, on account of the individual's	127
previous vocation, employment, or affiliations, cannot be classed	128
as either predominantly representative of employees or of	129
employers. The governor shall select the chairperson of the board	130
who shall serve as chairperson at the pleasure of the governor.	131

None of the members of the board, within one year immediately	132
preceding the member's appointment, shall have been employed by	133
the bureau of workers' compensation or by any person, partnership,	134
or corporation that has provided to the bureau services of a	135
financial or investment nature, including the management,	136
analysis, supervision, or investment of assets.	137

(B) Of the initial appointments made to the board, the	138
governor shall appoint the member who represents employees, one	139
member who represents employers, and the member who represents	140
the public to a term ending one year after the effective date of	141
this amendmentJune 11, 2007; one member who represents employers,	142
one member who represents employee organizations, one member who	143
is an investment and securities expert, and the member who is a	144
certified public accountant to a term ending two years after the	145
effective date of this amendmentJune 11, 2007; and one member who	146
represents employers, one member who represents employee	147
organizations, one member who is an investment and securities	148
expert, and the member who is an actuary to a term ending three	149
years after the effective date of this amendmentJune 11, 2007.	150
Thereafter, terms of office shall be for three years, with each	151
term ending on the same day of the same month as did the term that	152
it succeeds. Each member shall hold office from the date of the	153
member's appointment until the end of the term for which the	154
member was appointed.	155

Members may be reappointed. Any member appointed to fill a	156
vacancy occurring prior to the expiration date of the term for	157
which the member's predecessor was appointed shall hold office as	158
a member for the remainder of that term. A member shall continue	159
in office subsequent to the expiration date of the member's term	160
until a successor takes office or until a period of sixty days has	161
elapsed, whichever occurs first.	162

(C) In making appointments to the board, the governor shall	163
select the members from the list of names submitted by the	164
workers' compensation board of directors nominating committee	165
pursuant to this division. The nominating committee shall submit	166
to the governor a list containing four separate names for each of	167
the members on the board. Within fourteen days after the	168
submission of the list, the governor shall appoint individuals	169
from the list.	170

Within sixty days after a vacancy occurring as a result of	171
the expiration of a term and within thirty days after other	172
vacancies occurring on the board, the nominating committee shall	173
submit an initial list containing four names for each vacancy.	174
Within fourteen days after the submission of the initial list, the	175
governor either shall appoint individuals from that list or	176
request the nominating committee to submit another list of four	177
names for each member the governor has not appointed from the	178
initial list, which list the nominating committee shall submit to	179
the governor within fourteen days after the governor's request.	180
The governor then shall appoint, within seven days after the	181
submission of the second list, one of the individuals from either	182
list to fill the vacancy for which the governor has not made an	183
appointment from the initial list. With respect to the filling of	184
vacancies, the nominating committee shall provide the governor	185
with a list of four individuals who are, in the judgment of the	186
nominating committee, the most fully qualified to accede to	187
membership on the board.	188

In order for the name of an individual to be submitted to the	189
governor under this division, the nominating committee shall	190
approve the individual by an affirmative vote of a majority of its	191
members.	192

(D) All members of the board shall receive their reasonable	193
and necessary expenses pursuant to section 126.31 of the Revised	194
Code while engaged in the performance of their duties as members	195
and also shall receive an annual salary not to exceed sixty	196
thousand dollars in total, payable on the following basis:	197

(1) Except as provided in division (D)(2) of this section, a	198
member shall receive two thousand five hundred dollars during a	199
month in which the member attends one or more meetings of the	200
board and shall receive no payment during a month in which the	201
member attends no meeting of the board.	202

(2) A member may receive no more than thirty thousand dollars	203
per year to compensate the member for attending meetings of the	204
board, regardless of the number of meetings held by the board	205
during a year or the number of meetings in excess of twelve within	206
a year that the member attends.	207

(3) Except as provided in division (D)(4) of this section, if	208
a member serves on the workers' compensation audit committee,	209
workers' compensation actuarial committee, or the workers'	210
compensation investment committee, the member shall receive two	211
thousand five hundred dollars during a month in which the member	212
attends one or more meetings of the committee on which the member	213
serves and shall receive no payment during any month in which the	214
member attends no meeting of that committee.	215

(4) A member may receive no more than thirty thousand dollars	216
per year to compensate the member for attending meetings of any of	217
the committees specified in division (D)(3) of this section,	218
regardless of the number of meetings held by a committee during a	219
year or the number of committees on which a member serves.	220

The chairperson of the board shall set the meeting dates of	221
the board as necessary to perform the duties of the board under	222
this chapter and Chapters 4123., 4125., 4127., 4131., and 4167. of	223
the Revised Code. The board shall meet at least twelve times a	224
year. The administrator of workers' compensation shall provide	225
professional and clerical assistance to the board, as the board	226
considers appropriate.	227

(E) Before entering upon the duties of office, each appointed	228
member of the board shall take an oath of office as required by	229
sections 3.22 and 3.23 of the Revised Code and file in the office	230
of the secretary of state the bond required under section 4121.127	231
of the Revised Code.	232

(F) The board shall:

233

(1) Establish the overall administrative policy for the	234
bureau for the purposes of this chapter and Chapters 4123., 4125.,	235
4127., 4131., and 4167. of the Revised Code;	236

(2) Review progress of the bureau in meeting its cost and	237
quality objectives and in complying with this chapter and Chapters	238
4123., 4125., 4127., 4131., and 4167. of the Revised Code;	239

(3) Submit an annual report to the president of the senate,	240
the speaker of the house of representatives, the governor, and the	241
workers' compensation council and include all of the following in	242
that report:	243

(a) An evaluation of the cost and quality objectives of the	244
bureau;	245

(b) A statement of the net assets available for the provision	246
of compensation and benefits under this chapter and Chapters	247
4123., 4127., and 4131. of the Revised Code as of the last day of	248
the fiscal year;	249

(c) A statement of any changes that occurred in the net	250
assets available, including employer premiums and net investment	251
income, for the provision of compensation and benefits and payment	252
of administrative expenses, between the first and last day of the	253
fiscal year immediately preceding the date of the report;	254

(d) The following information for each of the six consecutive	255
fiscal years occurring previous to the report:	256

(i) A schedule of the net assets available for compensation	257
and benefits;	258

(ii) The annual cost of the payment of compensation and	259
benefits;	260

(iii) Annual administrative expenses incurred;

261

(iv) Annual employer premiums allocated for the provision of	262
compensation and benefits.	263

(e) A description of any significant changes that occurred	264
during the six years for which the board provided the information	265
required under division (F)(3)(d) of this section that affect the	266
ability of the board to compare that information from year to	267
year.	268

(4) Review all independent financial audits of the bureau.	269
The administrator shall provide access to records of the bureau to	270
facilitate the review required under this division.	271

(5) Study issues as requested by the administrator or the	272
governor;	273

(6) Contract with all of the following:

274

(a) An independent actuarial firm to assist the board in	275
making recommendations to the administrator regarding premium	276
rates;	277

(b) An outside investment counsel to assist the workers'	278
compensation investment committee in fulfilling its duties;	279

(c) An independent fiduciary counsel to assist the board in	280
the performance of its duties.	281

(7) Approve the investment policy developed by the workers'	282
compensation investment committee pursuant to section 4121.129 of	283
the Revised Code if the policy satisfies the requirements	284
specified in section 4123.442 of the Revised Code.	285

(8) Review and publish the investment policy no less than	286
annually and make copies available to interested parties.	287

(9) Prohibit, on a prospective basis, any specific investment	288
it finds to be contrary to the investment policy approved by the	289
board.	290

(10) Vote to open each investment class and allow the	291
administrator to invest in an investment class only if the board,	292
by a majority vote, opens that class;	293

(11) After opening a class but prior to the administrator	294
investing in that class, adopt rules establishing due diligence	295
standards for employees of the bureau to follow when investing in	296
that class and establish policies and procedures to review and	297
monitor the performance and value of each investment class;	298

(12) Submit a report annually on the performance and value of	299
each investment class to the governor, the president and minority	300
leader of the senate, and the speaker and minority leader of the	301
house of representatives.	302

(13) Advise and consent on all of the following:

303

(a) Administrative rules the administrator submits to it	304
pursuant to division (B)(5) of section 4121.121 of the Revised	305
Code for the classification of occupations or industries, for	306
premium rates and contributions, for the amount to be credited to	307
the surplus fund, for rules and systems of rating, rate revisions,	308
and merit rating;	309

(b) The duties and authority conferred upon the administrator	310
pursuant to section 4121.37 of the Revised Code;	311

(c) Rules the administrator adopts for the health partnership	312
program and the qualified health plan system, as provided in	313
sections 4121.44, 4121.441, and 4121.442 of the Revised Code;	314

(d) Rules the administrator submits to it pursuant to Chapter	315
4167. of the Revised Code regarding the public employment risk	316
reduction program and the protection of public health care workers	317
from exposure incidents.	318

As used in this division, "public health care worker" and	319
"exposure incident" have the same meanings as in section 4167.25	320
of the Revised Code.	321

(14)(11) Perform all duties required under this chapter and	322
Chapters 4123., 4125., 4127., 4131., and 4167. of the Revised	323
Code;	324

(15)(12) Meet with the governor on an annual basis to discuss	325
the administrator's performance of the duties specified in this	326
chapter and Chapters 4123., 4125., 4127., 4131., and 4167. of the	327
Revised Code;	328

(16)(13) Develop and participate in a bureau of workers'	329
compensation board of directors education program that consists of	330
all of the following:	331

(a) An orientation component for newly appointed members;

332

(b) A continuing education component for board members who	333
have served for at least one year;	334

(c) A curriculum that includes education about each of the	335
following topics:	336

(i) Board member duties and responsibilities;

337

(ii) Compensation and benefits paid pursuant to this chapter	338
and Chapters 4123., 4127., and 4131. of the Revised Code;	339

(iii) Ethics;

340

(iv) Governance processes and procedures;

341

(v) Actuarial soundness;

342

(vi) Investments;

343

(vii) Any other subject matter the board believes is	344
reasonably related to the duties of a board member.	345

(17)(14) Submit the program developed pursuant to division	346
(F)(16)(13) of this section to the workers' compensation council	347
for approval;	348

(18)(15) Hold all sessions, classes, and other events for the	349
program developed pursuant to division (F)(16)(13) of this section	350
in this state.	351

(G) The board may do both of the following:

352

(1) Vote to close any investment class;

353

(2) Createcreate any committees in addition to the workers'	354
compensation audit committee, the workers' compensation actuarial	355
committee, and the workers' compensation investment committee that	356
the board determines are necessary to assist the board in	357
performing its duties.	358

(H) The office of a member of the board who is convicted of	359
or pleads guilty to a felony, a theft offense as defined in	360
section 2913.01 of the Revised Code, or a violation of section	361
102.02, 102.03, 102.04, 2921.02, 2921.11, 2921.13, 2921.31,	362
2921.41, 2921.42, 2921.43, or 2921.44 of the Revised Code shall be	363
deemed vacant. The vacancy shall be filled in the same manner as	364
the original appointment. A person who has pleaded guilty to or	365
been convicted of an offense of that nature is ineligible to be a	366
member of the board. A member who receives a bill of indictment	367
for any of the offenses specified in this section shall be	368
automatically suspended from the board pending resolution of the	369
criminal matter.	370

(I) For the purposes of division (G)(1) of section 121.22 of	371
the Revised Code, the meeting between the governor and the board	372
to review the administrator's performance as required under	373
division (F)(15)(12) of this section shall be considered a meeting	374
regarding the employment of the administrator.	375

Sec. 4121.79.  (A) The director of the workers'	376
compensation council shall prepare and submit to the council,	377
for its approval, a biennial budget that includes an itemized	378
estimate of the amounts necessary to pay the expenses of the	379
council during the succeeding biennium. The director may request	380
and the council may approve, anytime during that biennium,	381
additional amounts to cover costs for audits or other necessary	382
expenses that were not included in that budget. After the budget	383
is approved, the director of the council shall separate from the	384
budget the portion covering the costs of compensation and	385
benefits for the employees of the council and submit only that	386
portion to the director of budget and management as the council's	387
budget request for purposes of section 126.02 of the Revised	388
Code.	389

(B) The council shall establish policies and procedures for	390
purchasing goods and services on a competitive basis and	391
maintaining tangible personal property. The policies and	392
procedures shall be designed to safeguard the use of funds	393
received by the council. An audit performed under Chapter 117. of	394
the Revised Code shall include a determination of the council's	395
compliance with those policies and procedures.	396

The council is not subject to the requirements specified in	397
Chapter 123. or 125. of the Revised Code and those chapters do	398
not apply to the council. However, the council may request the	399
department of administrative services, and the department may	400
agree, to perform for the council any of the services the	401
department is authorized to perform under those chapters. The	402
council may enter into an agreement with the director of	403
administrative services for the performance of those requested	404
services.	405

(C) There is hereby created the workers' compensation council	406
fund, which shall be in the custody of the treasurer of state but	407
shall not be a part of the state treasury. The fund shall consist	408
of all moneys transferred into it by the administrator of workers'	409
compensation pursuant to section 4123.342 of the Revised Code.	410
The council shall use the fund to pay the expenses incurred by	411
the council. Except as otherwise provided in division (D) of	412
this section, the treasurer of state shall disburse moneys from	413
the fund upon instruments authorized by the council and signed	414
by the director.	415

The council is the trustee of the workers' compensation	416
council fund. At the request of the director of the council, the	417
treasurer of state shall select and contract with one or more	418
investment managers to invest all money credited to the fund that	419
is not currently needed for carrying out the functions of the	420
council. The treasurer of state shall contract with an investment	421
manager for whom the administrator requested a criminal records	422
check pursuant to section 4123.444 of the Revised Code and who has	423
not been convicted of or pleaded guilty to a financial or	424
investment crime as defined in that section. The eligible list of	425
investments shall be the same as those specified in the investment	426
policy for the state insurance fundbureau of workers'	427
compensation custodial funds approved by the bureau of workers'	428
compensation board of directors pursuant to section 4121.12 of	429
the Revised Code. All investments are subject to the same	430
limitations and requirements as specified for the state insurance	431
fundbureau of workers' compensation custodial funds under	432
sections 4121.12, 4121.126, 4121.127, 4123.44, and 4123.442,	433
4123.443, and 4123.444 of the Revised Code. All investment	434
earnings of the fund shall be credited to the fund.	435

(D) There is hereby created in the state treasury the	436
workers' compensation council remuneration fund. The treasurer of	437
state periodically shall pay into that fund, from the workers'	438
compensation council fund created in division (C) of this section,	439
amounts requested by the director of the council to pay the	440
compensation and benefits of the employees of the council. Amounts	441
credited to the remuneration fund shall be used by the director	442
of the council solely to pay the compensation and benefits of all	443
employees of the council. All investment earnings of the	444
remuneration fund shall be credited to that fund.	445

Sec. 4123.01.  As used in this chapter:

446

(A)(1) "Employee" means:

447

(a) Every person in the service of the state, or of any	448
county, municipal corporation, township, or school district	449
therein, including regular members of lawfully constituted police	450
and fire departments of municipal corporations and townships,	451
whether paid or volunteer, and wherever serving within the state	452
or on temporary assignment outside thereof, and executive officers	453
of boards of education, under any appointment or contract of hire,	454
express or implied, oral or written, including any elected	455
official of the state, or of any county, municipal corporation, or	456
township, or members of boards of education.	457

As used in division (A)(1)(a) of this section, the term	458
"employee" includes the following persons when responding to an	459
inherently dangerous situation that calls for an immediate	460
response on the part of the person, regardless of whether the	461
person is within the limits of the jurisdiction of the person's	462
regular employment or voluntary service when responding, on the	463
condition that the person responds to the situation as the person	464
otherwise would if the person were on duty in the person's	465
jurisdiction:	466

(i) Off-duty peace officers. As used in division (A)(1)(a)(i)	467
of this section, "peace officer" has the same meaning as in	468
section 2935.01 of the Revised Code.	469

(ii) Off-duty firefighters, whether paid or volunteer, of a	470
lawfully constituted fire department.	471

(iii) Off-duty first responders, emergency medical	472
technicians-basic, emergency medical technicians-intermediate, or	473
emergency medical technicians-paramedic, whether paid or	474
volunteer, of an ambulance service organization or emergency	475
medical service organization pursuant to Chapter 4765. of the	476
Revised Code.	477

(b) Every person in the service of any person, firm, or	478
private corporation, including any public service corporation,	479
that (i) employs one or more persons regularly in the same	480
business or in or about the same establishment under any contract	481
of hire, express or implied, oral or written, including aliens and	482
minors, household workers who earn one hundred sixty dollars or	483
more in cash in any calendar quarter from a single household and	484
casual workers who earn one hundred sixty dollars or more in cash	485
in any calendar quarter from a single employer, or (ii) is bound	486
by any such contract of hire or by any other written contract, to	487
pay into the state insurance fund the premiums provided by this	488
chapter.	489

(c) Every person who performs labor or provides services	490
pursuant to a construction contract, as defined in section 4123.79	491
of the Revised Code, if at least ten of the following criteria	492
apply:	493

(i) The person is required to comply with instructions from	494
the other contracting party regarding the manner or method of	495
performing services;	496

(ii) The person is required by the other contracting party to	497
have particular training;	498

(iii) The person's services are integrated into the regular	499
functioning of the other contracting party;	500

(iv) The person is required to perform the work personally;

501

(v) The person is hired, supervised, or paid by the other	502
contracting party;	503

(vi) A continuing relationship exists between the person and	504
the other contracting party that contemplates continuing or	505
recurring work even if the work is not full time;	506

(vii) The person's hours of work are established by the other	507
contracting party;	508

(viii) The person is required to devote full time to the	509
business of the other contracting party;	510

(ix) The person is required to perform the work on the	511
premises of the other contracting party;	512

(x) The person is required to follow the order of work set by	513
the other contracting party;	514

(xi) The person is required to make oral or written reports	515
of progress to the other contracting party;	516

(xii) The person is paid for services on a regular basis such	517
as hourly, weekly, or monthly;	518

(xiii) The person's expenses are paid for by the other	519
contracting party;	520

(xiv) The person's tools and materials are furnished by the	521
other contracting party;	522

(xv) The person is provided with the facilities used to	523
perform services;	524

(xvi) The person does not realize a profit or suffer a loss	525
as a result of the services provided;	526

(xvii) The person is not performing services for a number of	527
employers at the same time;	528

(xviii) The person does not make the same services available	529
to the general public;	530

(xix) The other contracting party has a right to discharge	531
the person;	532

(xx) The person has the right to end the relationship with	533
the other contracting party without incurring liability pursuant	534
to an employment contract or agreement.	535

Every person in the service of any independent contractor or	536
subcontractor who has failed to pay into the state insurance fund	537
the amount of premium determined and fixed by the administrator of	538
workers' compensation for the person's employment or occupation or	539
if a self-insuring employer has failed to pay compensation and	540
benefits directly to the employer's injured and to the dependents	541
of the employer's killed employees as required by section 4123.35	542
of the Revised Code, shall be considered as the employee of the	543
person who has entered into a contract, whether written or verbal,	544
with such independent contractor unless such employees or their	545
legal representatives or beneficiaries elect, after injury or	546
death, to regard such independent contractor as the employer.	547

(d) Every person to whom all of the following apply:

548

(i) The person is a resident of a state other than this state	549
and is covered by that other state's workers' compensation law;	550

(ii) The person performs labor or provides services for that	551
person's employer while temporarily within this state;	552

(iii) The laws of that other state do not include the	553
provisions described in division (H)(4) of section 4123.54 of the	554
Revised Code.	555

(2) "Employee" does not mean:

556

(a) A duly ordained, commissioned, or licensed minister or	557
assistant or associate minister of a church in the exercise of	558
ministry;	559

(b) Any officer of a family farm corporation;

560

(c) An individual incorporated as a corporation; or

561

(d) An individual who otherwise is an employee of an employer	562
but who signs the waiver and affidavit specified in section	563
4123.15 of the Revised Code on the condition that the	564
administrator has granted a waiver and exception to the	565
individual's employer under section 4123.15 of the Revised Code.	566

Any employer may elect to include as an "employee" within	567
this chapter, any person excluded from the definition of	568
"employee" pursuant to division (A)(2) of this section. If an	569
employer is a partnership, sole proprietorship, individual	570
incorporated as a corporation, or family farm corporation, such	571
employer may elect to include as an "employee" within this	572
chapter, any member of such partnership, the owner of the sole	573
proprietorship, the individual incorporated as a corporation, or	574
the officers of the family farm corporation. In the event of an	575
election, the employer shall serve upon the bureau of workers'	576
compensation written notice naming the persons to be covered,	577
include such employee's remuneration for premium purposes in all	578
future payroll reports, and no person excluded from the definition	579
of "employee" pursuant to division (A)(2) of this section,	580
proprietor, individual incorporated as a corporation, or partner	581
shall be deemed an employee within this division until the	582
employer has served such notice.	583

For informational purposes only, the bureau shall prescribe	584
such language as it considers appropriate, on such of its forms as	585
it considers appropriate, to advise employers of their right to	586
elect to include as an "employee" within this chapter a sole	587
proprietor, any member of a partnership, an individual	588
incorporated as a corporation, the officers of a family farm	589
corporation, or a person excluded from the definition of	590
"employee" under division (A)(2) of this section, that they should	591
check any health and disability insurance policy, or other form of	592
health and disability plan or contract, presently covering them,	593
or the purchase of which they may be considering, to determine	594
whether such policy, plan, or contract excludes benefits for	595
illness or injury that they might have elected to have covered by	596
workers' compensation.	597

(B) "Employer" means:

598

(1) The state, including state hospitals, each county,	599
municipal corporation, township, school district, and hospital	600
owned by a political subdivision or subdivisions other than the	601
state;	602

(2) Every person, firm, professional employer organization as	603
defined in section 4125.01 of the Revised Code, and private	604
corporation, including any public service corporation, that (a)	605
has in service one or more employees or shared employees regularly	606
in the same business or in or about the same establishment under	607
any contract of hire, express or implied, oral or written, or (b)	608
is bound by any such contract of hire or by any other written	609
contract, to pay into the insurance fund the premiums provided by	610
this chapter.	611

All such employers are subject to this chapter. Any member of	612
a firm or association, who regularly performs manual labor in or	613
about a mine, factory, or other establishment, including a	614
household establishment, shall be considered an employee in	615
determining whether such person, firm, or private corporation, or	616
public service corporation, has in its service, one or more	617
employees and the employer shall report the income derived from	618
such labor to the bureau as part of the payroll of such employer,	619
and such member shall thereupon be entitled to all the benefits of	620
an employee.	621

(C) "Injury" includes any injury, whether caused by external	622
accidental means or accidental in character and result, received	623
in the course of, and arising out of, the injured employee's	624
employment. "Injury" does not include:	625

(1) Psychiatric conditions except where the claimant's	626
psychiatric conditions have arisen from an injury or occupational	627
disease sustained by that claimant or where the claimant's	628
psychiatric conditions have arisen from sexual conduct in which	629
the claimant was forced by threat of physical harm to engage or	630
participate;	631

(2) Injury or disability caused primarily by the natural	632
deterioration of tissue, an organ, or part of the body;	633

(3) Injury or disability incurred in voluntary participation	634
in an employer-sponsored recreation or fitness activity if the	635
employee signs a waiver of the employee's right to compensation or	636
benefits under this chapter prior to engaging in the recreation or	637
fitness activity;	638

(4) A condition that pre-existed an injury unless that	639
pre-existing condition is substantially aggravated by the injury.	640
Such a substantial aggravation must be documented by objective	641
diagnostic findings, objective clinical findings, or objective	642
test results. Subjective complaints may be evidence of such a	643
substantial aggravation. However, subjective complaints without	644
objective diagnostic findings, objective clinical findings, or	645
objective test results are insufficient to substantiate a	646
substantial aggravation.	647

(D) "Child" includes a posthumous child and a child legally	648
adopted prior to the injury.	649

(E) "Family farm corporation" means a corporation founded for	650
the purpose of farming agricultural land in which the majority of	651
the voting stock is held by and the majority of the stockholders	652
are persons or the spouse of persons related to each other within	653
the fourth degree of kinship, according to the rules of the civil	654
law, and at least one of the related persons is residing on or	655
actively operating the farm, and none of whose stockholders are a	656
corporation. A family farm corporation does not cease to qualify	657
under this division where, by reason of any devise, bequest, or	658
the operation of the laws of descent or distribution, the	659
ownership of shares of voting stock is transferred to another	660
person, as long as that person is within the degree of kinship	661
stipulated in this division.	662

(F) "Occupational disease" means a disease contracted in the	663
course of employment, which by its causes and the characteristics	664
of its manifestation or the condition of the employment results in	665
a hazard which distinguishes the employment in character from	666
employment generally, and the employment creates a risk of	667
contracting the disease in greater degree and in a different	668
manner from the public in general.	669

(G) "Self-insuring employer" means an employer who is granted	670
the privilege of paying compensation and benefits directly under	671
section 4123.35 of the Revised Code, including a board of county	672
commissioners for the sole purpose of constructing a sports	673
facility as defined in section 307.696 of the Revised Code,	674
provided that the electors of the county in which the sports	675
facility is to be built have approved construction of a sports	676
facility by ballot election no later than November 6, 1997.	677

(H) "Public employer" means an employer as defined in	678
division (B)(1) of this section.	679

(I) "Sexual conduct" means vaginal intercourse between a male	680
and female; anal intercourse, fellatio, and cunnilingus between	681
persons regardless of gender; and, without privilege to do so, the	682
insertion, however slight, of any part of the body or any	683
instrument, apparatus, or other object into the vaginal or anal	684
cavity of another. Penetration, however slight, is sufficient to	685
complete vaginal or anal intercourse.	686

(J) "Other-states' insurer" means an insurance company that	687
is authorized to provide workers' compensation insurance coverage	688
in any of the states that permit employers to obtain insurance	689
for workers' compensation claims through insurance companies.	690

(K) "Other-states' coverage" means insurance coverage	691
purchased by an employer for workers' compensation claims that	692
arise in a state or states other than this state and that are	693
filed by the employees of the employer or those employee's	694
dependents, as applicable, in that other state or those other	695
states.	696

(L) "Bureau of workers' compensation custodial funds" means	697
the state insurance fund created in section 4123.30 of the	698
Revised Code, the premium payment security fund created in	699
section 4123.34 of the Revised Code, the self-insuring employer	700
guaranty fund created in section 4123.351 of the Revised Code,	701
the disabled worker relief fund created in section 4123.412 of	702
the Revised Code, the public work-relief employees' compensation	703
fund created in section 4127.05 of the Revised Code, the	704
coal-workers pneumoconiosis fund created in section 4131.03 of	705
the Revised Code, and the marine industry fund created in section	706
4131.13 of the Revised Code.	707

Sec. 4123.34.  It shall be the duty of the bureau of	708
workers' compensation board of directors and the administrator of	709
workers' compensation to safeguard and maintain the solvency of	710
the state insurance fund and all other funds specified in this	711
chapter and Chapters 4121., 4127., and 4131. of the Revised Code.	712
The administrator, in the exercise of the powers and discretion	713
conferred upon the administrator in section 4123.29 of the Revised	714
Code, shall fix and maintain, with the advice and consent of the	715
board, for each class of occupation or industry, the lowest	716
possible rates of premium consistent with the maintenance of a	717
solvent state insurance fund and the creation and maintenance of a	718
reasonable surplus, after the payment of legitimate claims for	719
injury, occupational disease, and death that the administrator	720
authorizes to be paid from the state insurance fund for the	721
benefit of injured, diseased, and the dependents of killed	722
employees. In establishing rates, the administrator shall take	723
into account the necessity of ensuring sufficient money is set	724
aside in the premium payment security fund to cover any defaults	725
in premium obligations. The administrator shall observe all of the	726
following requirements in fixing the rates of premium for the	727
risks of occupations or industries:	728

(A) The administrator shall keep an accurate account of the	729
money paid in premiums by each of the several classes of	730
occupations or industries, and the losses on account of injuries,	731
occupational disease, and death of employees thereof, and also	732
keep an account of the money received from each individual	733
employer and the amount of losses incurred against the state	734
insurance fund on account of injuries, occupational disease, and	735
death of the employees of the employer.	736

(B) Ten per cent of the money paid into the state insurance	737
fund shall be set aside for the creation of a surplus until the	738
surplus amounts to the sum of one hundred thousand dollars, after	739
which time, whenever necessary in the judgment of the	740
administrator to guarantee a solvent state insurance fund, a sum	741
not exceeding five per cent of all the money paid into the state	742
insurance fund shall be credited to the surplus fund. In addition	743
to all statutory authority under this chapter and Chapter 4121. of	744
the Revised Code, the administrator has discretionary and	745
contingency authority to make charges to surplus. The	746
administrator shall account for all charges, whether statutory,	747
discretionary, or contingency, that the administrator may make to	748
surplus. A revision of basic rates shall be made annually on the	749
first day of July.	750

Notwithstanding any provision of the law to the contrary, one	751
hundred eighty days after the effective date on which	752
self-insuring employers first may elect under division (D) of	753
section 4121.66 of the Revised Code to directly pay for	754
rehabilitation expenses, the administrator shall calculate the	755
deficit, if any, in the portion of surplus fund that is used for	756
reimbursement to self-insuring employers for all expenses other	757
than handicapped reimbursement under section 4123.343 of the	758
Revised Code. The administrator, from time to time, may determine	759
whether the surplus fund has such a deficit and may assess all	760
self-insuring employers who participated in the portion of the	761
surplus fund during the accrual of the deficit and who during that	762
time period have not made the election under division (D) of	763
section 4121.66 of the Revised Code the amount the administrator	764
determines necessary to reduce the deficit.	765

Revisions of basic rates shall be in accordance with the	766
oldest four of the last five calendar years of the combined	767
accident and occupational disease experience of the administrator	768
in the administration of this chapter, as shown by the accounts	769
kept as provided in this section, excluding the experience of	770
employers that are no longer active if the administrator	771
determines that the inclusion of those employers would have a	772
significant negative impact on the remainder of the employers in a	773
particular manual classification; and the administrator shall	774
adopt rules, with the advice and consent of the board, governing	775
rate revisions, the object of which shall be to make an equitable	776
distribution of losses among the several classes of occupation or	777
industry, which rules shall be general in their application.	778

(C) The administrator may apply that form of rating system	779
that the administrator finds is best calculated to merit rate or	780
individually rate the risk more equitably, predicated upon the	781
basis of its individual industrial accident and occupational	782
disease experience, and may encourage and stimulate accident	783
prevention. The administrator shall develop fixed and equitable	784
rules controlling the rating system, which rules shall conserve to	785
each risk the basic principles of workers' compensation insurance.	786

(D) The administrator, from the money paid into the state	787
insurance fund, shall set aside into an account of the state	788
insurance fund titled a premium payment security fund sufficient	789
money to pay for any premiums due from an employer and uncollected	790
that are in excess of the employer's premium security deposit.	791

The fund shall be in the custody of the treasurer of state.	792
The administrator may invest the surplus and reserve belonging to	793
the fund in accordance with section 4123.44 of the Revised Code.	794
All investment earnings of the fund shall be deposited in the	795
fund. Disbursements from the fund shall be made by the bureau of	796
workers' compensation upon order of the administrator to the state	797
insurance fund. The use of the moneys held by the premium payment	798
security fund is restricted to reimbursement to the state	799
insurance fund of premiums due and uncollected in excess of an	800
employer's premium security deposit. The moneys constituting the	801
premium payment security fund shall be maintained without regard	802
to or reliance upon any other fund. This section does not prevent	803
the deposit or investment of the premium payment security fund	804
with any other fund created by this chapter, but the premium	805
payment security fund is separate and distinct for every other	806
purpose and a strict accounting thereof shall be maintained.	807

(E) The administrator may grant discounts on premium rates	808
for employers who meet either of the following requirements:	809

(1) Have not incurred a compensable injury for one year or	810
more and who maintain an employee safety committee or similar	811
organization or make periodic safety inspections of the workplace.	812

(2) Successfully complete a loss prevention program	813
prescribed by the superintendent of the division of safety and	814
hygiene and conducted by the division or by any other person	815
approved by the superintendent.	816

(F)(1) In determining the premium rates for the construction	817
industry the administrator shall calculate the employers' premiums	818
based upon the actual remuneration construction industry employees	819
receive from construction industry employers, provided that the	820
amount of remuneration the administrator uses in calculating the	821
premiums shall not exceed an average weekly wage equal to one	822
hundred fifty per cent of the statewide average weekly wage as	823
defined in division (C) of section 4123.62 of the Revised Code.	824

(2) Division (F)(1) of this section shall not be construed as	825
affecting the manner in which benefits to a claimant are awarded	826
under this chapter.	827

(3) As used in division (F) of this section, "construction	828
industry" includes any activity performed in connection with the	829
erection, alteration, repair, replacement, renovation,	830
installation, or demolition of any building, structure, highway,	831
or bridge.	832

Sec. 4123.351.  (A) The administrator of workers'	833
compensation shall require every self-insuring employer to pay a	834
contribution, calculated under this section, to the self-insuring	835
employers' guaranty fund established pursuant to this section. The	836
fund shall provide for payment of compensation and benefits to	837
employees of the self-insuring employer in order to cover any	838
default in payment by that employer.	839

(B) The bureau of workers' compensation shall operate the	840
self-insuring employers' guaranty fund for self-insuring	841
employers. The administrator annually shall establish the	842
contributions due from self-insuring employers for the fund at	843
rates as low as possible but such as will assure sufficient moneys	844
to guarantee the payment of any claims against the fund. The	845
bureau's operation of the fund is not subject to sections 3929.10	846
to 3929.18 of the Revised Code or to regulation by the	847
superintendent of insurance.	848

(C) If a self-insuring employer defaults, the bureau shall	849
recover the amounts paid as a result of the default from the	850
self-insuring employers' guaranty fund. If a self-insuring	851
employer defaults and is in compliance with this section for the	852
payment of contributions to the fund, such self-insuring employer	853
is entitled to the immunity conferred by section 4123.74 of the	854
Revised Code for any claim arising during any period the employer	855
is in compliance with this section.	856

(D)(1) There is hereby established a self-insuring employers'	857
guaranty fund, which shall be in the custody of the treasurer of	858
state and which shall be separate from the other funds established	859
and administered pursuant to this chapter. The fund shall consist	860
of contributions and other payments made by self-insuring	861
employers under this section. All investment earnings of the fund	862
shall be credited to the fund. The bureau shall make disbursements	863
from the fund pursuant to this section.	864

(2) The administrator has the same powers tomay invest any	865
of the surplus orand reserve belonging to the fund as are	866
delegated to the administrator underin accordance with section	867
4123.44 of the Revised Code with respect to the state insurance	868
fund. The administrator shall apply interest earned solely to the	869
reduction of assessments for contributions from self-insuring	870
employers and to the payments required due to defaults.	871

(3) If the bureau of workers' compensation board of directors	872
determines that reinsurance of the risks of the fund is necessary	873
to assure solvency of the fund, the board may:	874

(a) Enter into contracts for the purchase of reinsurance	875
coverage of the risks of the fund with any company or agency	876
authorized by law to issue contracts of reinsurance;	877

(b) Require the administrator to pay the cost of reinsurance	878
from the fund;	879

(c) Include the costs of reinsurance as a liability and	880
estimated liability of the fund.	881

(E) The administrator, with the advice and consent of the	882
board, may adopt rules pursuant to Chapter 119. of the Revised	883
Code for the implementation of this section, including a rule,	884
notwithstanding division (C) of this section, requiring	885
self-insuring employers to provide security in addition to the	886
contribution to the self-insuring employers' guaranty fund	887
required by this section. The additional security required by the	888
rule, as the administrator determines appropriate, shall be	889
sufficient and adequate to provide for financial assurance to meet	890
the obligations of self-insuring employers under this chapter and	891
Chapter 4121. of the Revised Code.	892

(F) The purchase of coverage under this section by	893
self-insuring employers is valid notwithstanding the prohibitions	894
contained in division (A) of section 4123.82 of the Revised Code	895
and is in addition to the indemnity contracts that self-insuring	896
employers may purchase pursuant to division (B) of section 4123.82	897
of the Revised Code.	898

(G) The administrator, on behalf of the self-insuring	899
employers' guaranty fund, has the rights of reimbursement and	900
subrogation and shall collect from a defaulting self-insuring	901
employer or other liable person all amounts the administrator has	902
paid or reasonably expects to pay from the fund on account of the	903
defaulting self-insuring employer.	904

(H) The assessments for contributions, the administration of	905
the self-insuring employers' guaranty fund, the investment of the	906
money in the fund, and the payment of liabilities incurred by the	907
fund do not create any liability upon the state.	908

Except for a gross abuse of discretion, neither the board,	909
nor the individual members thereof, nor the administrator shall	910
incur any obligation or liability respecting the assessments for	911
contributions, the administration of the self-insuring employers'	912
guaranty fund, the investment of the fund, or the payment of	913
liabilities therefrom.	914

Sec. 4123.412.  For the relief of persons who are permanently	915
and totally disabled as the result of injury or disease sustained	916
in the course of their employment and who are receiving workers'	917
compensation which is payable to them by virtue of and under the	918
laws of this state in amounts, the total of which, when combined	919
with disability benefits received pursuant to the Social Security	920
Act is less than three hundred forty-two dollars per month	921
adjusted annually as provided in division (B) of section 4123.62	922
of the Revised Code, there is hereby created a separate fund to be	923
known as the disabled workers' relief fund, which fund shall	924
consist of the sums that are from time to time appropriated by the	925
general assembly and made available to the order of the bureau of	926
workers' compensation to carry out the objects and purposes of	927
sections 4123.412 to 4123.418 of the Revised Code. The fund shall	928
be in the custody of the treasurer of the state. The	929
administrator may invest the surplus and reserve belonging to the	930
fund in accordance with section 4123.44 of the Revised Code.	931
Disbursements from the fund shall be made by the bureau to those	932
persons entitled to participate therein and in amounts to each	933
participant as is provided in section 4123.414 of the Revised	934
Code. All investment earnings of the fund shall be credited to the	935
fund.	936

Sec. 4123.44.  The members of the bureau of workers'	937
compensation board of directors, the administrator of workers'	938
compensation, and the bureau of workers' compensation chief	939
investment officer are the trustees of the state insurance fund	940
bureau of workers' compensation custodial funds. The	941
administrator, in accordance with sections 4121.126 and 4121.127	942
of the Revised Code and the investment policy approved by the	943
board pursuant to section 4121.12 of the Revised Code, and in	944
consultation with the bureau of workers' compensation chief	945
investment officer, may invest any of the surplus or reserve	946
belonging to each of the state insurance fundbureau of workers'	947
compensation custodial funds in the classes of investments	948
specified in section 4123.443 of the Revised Code. The	949
administrator and the bureau of workers' compensation chief	950
investment officer shall not deviate from the investment policy	951
approved by the board without the approval of the workers'	952
compensation investment committee and the board.	953

The administrator shall not invest in any type of investment	954
specified in divisions (B)(1) to (10) of section 4123.442 of the	955
Revised Code.	956

The administrator and other fiduciaries shall discharge their	957
duties with respect to the funds with the care, skill, prudence,	958
and diligence under the circumstances then prevailing that a	959
prudent person acting in a like capacity and familiar with such	960
matters would use in the conduct of an enterprise of a like	961
character and with like aims, and by diversifying the investments	962
of the assets of the funds so as to minimize the risk of large	963
losses, unless under the circumstances it is clearly prudent not	964
to do so.	965

To facilitate investment of the funds, the administrator may	966
establish a partnership, trust, limited liability company,	967
corporation, including a corporation exempt from taxation under	968
the Internal Revenue Code, 100 Stat. 2085, 26 U.S.C. 1, as	969
amended, or any other legal entity authorized to transact business	970
in this state.	971

When reporting on the performance of investments, the	972
administrator shall comply with the performance presentation	973
standards established by the association for investment management	974
and research.	975

All investments shall be purchased at current market prices	976
and the evidences of title to the investments shall be placed in	977
the custody of the treasurer of state, who is hereby designated as	978
custodian, or in the custody of the treasurer of state's	979
authorized agent. Evidences of title of the investments so	980
purchased may be deposited by the treasurer of state for	981
safekeeping with an authorized agent selected by the treasurer of	982
state who is a qualified trustee under section 135.18 of the	983
Revised Code. The treasurer of state or the agent shall collect	984
the principal, dividends, distributions, and interest as they	985
become due and payable and place them when collected into the	986
state insuranceappropriate bureau of workers' compensation	987
custodial fund.	988

The treasurer of state shall pay for investments purchased by	989
the administrator on receipt of written or electronic instructions	990
from the administrator or the administrator's designated agent	991
authorizing the purchase, and pending receipt of the evidence of	992
title of the investment by the treasurer of state or the treasurer	993
of state's authorized agent. The administrator may sell	994
investments held by the administrator, and the treasurer of state	995
or the treasurer of state's authorized agent shall accept payment	996
from the purchaser and deliver evidence of title of the investment	997
to the purchaser, on receipt of written or electronic instructions	998
from the administrator or the administrator's designated agent	999
authorizing the sale, and pending receipt of the moneys for the	1000
investments. The amount received shall be placed in the state	1001
insuranceappropriate bureau of workers' compensation custodial	1002
fund. The administrator and the treasurer of state may enter into	1003
agreements to establish procedures for the purchase and sale of	1004
investments under this division and the custody of the	1005
investments.	1006

No purchase or sale of any investment shall be made under	1007
this section, except as authorized by the administrator.	1008

Any statement of financial position distributed by the	1009
administrator shall include the fair value, as of the statement	1010
date, of all investments held by the administrator under this	1011
section.	1012

When in the judgment of the administrator it is necessary to	1013
provide available funds for the payment of compensation or	1014
benefits under this chapter, the administrator may borrow money	1015
from any available source and pledge as security a sufficient	1016
amount of bonds or other securities in which the state insurance	1017
fund is invested. The aggregate unpaid amount of loans existing at	1018
any one time for money so borrowed shall not exceed ten million	1019
dollars. The bonds or other securities so pledged as security for	1020
such loans to the administrator shall be the sole security for the	1021
payment of the principal and interest of any such loan. The	1022
administrator shall not be personally liable for the payment of	1023
the principal or the interest of any such loan. No such loan shall	1024
be made for a longer period of time than one year. Such loans may	1025
be renewed but no one renewal shall be for a period in excess of	1026
one year. Such loans shall bear such rate of interest as the	1027
administrator determines and in negotiating the loans, the	1028
administrator shall endeavor to secure as favorable interest rates	1029
and terms as circumstances will permit.	1030

The treasurer of state may deliver to the person or	1031
governmental agency making such loan, the bonds or other	1032
securities which are to be pledged by the administrator as	1033
security for such loan, upon receipt by the treasurer of state of	1034
an order of the administrator authorizing such loan. Upon payment	1035
of any such loan by the administrator, the bonds or other	1036
securities pledged as security therefor shall be returned to the	1037
treasurer of state as custodian of such bonds.	1038

The administrator may pledge with the treasurer of state such	1039
amount of bonds or other securities in which the state insurance	1040
fund is invested as is reasonably necessary as security for any	1041
certificates issued, or paid out, by the treasurer of state upon	1042
any warrants drawn by the administrator.	1043

The administrator, subject to the approval of the board, may	1044
secure investment information services, consulting services, and	1045
or other like services to facilitate investment of the surplus	1046
and reserve belonging to each of the state insurance fundbureau	1047
of workers' compensation custodial funds and, subject to the	1048
approval of the board, may enter into a contract with an	1049
investment manager to have that manager invest the assets of those	1050
funds. The administrator shall pay the expense of securing such	1051
services from the state insurance fund.	1052

Sec. 4123.442. When developing the investment policy for the	1053
investment of the assets of the bureau of workers' compensation	1054
custodial funds specified in this chapter and Chapters 4121.,	1055
4127., and 4131. of the Revised Code, the workers' compensation	1056
investment committee shall do all of the following:	1057

(A) Specify the asset allocation targets and ranges, risk	1058
factors, asset class benchmarks, time horizons, total return	1059
objectives, and performance evaluation guidelines;	1060

(B) Prohibit investing the assets of those funds, directly or	1061
indirectly, in vehicles that target any of the following:	1062

(1) Coins;

1063

(2) Artwork;

1064

(3) Horses;

1065

(4) Jewelry or gems;

1066

(5) Stamps;

1067

(6) Antiques;

1068

(7) Artifacts;

1069

(8) Collectibles;

1070

(9) Memorabilia;

1071

(10) Similar unregulated investments that are not commonly	1072
part of an institutional portfolio, that lack liquidity, and that	1073
lack readily determinable valuation.	1074

(C) Specify that the administrator of workers' compensation	1075
may invest in an investment class only if the bureau of workers'	1076
compensation board of directors, by a majority vote, opens that	1077
classUse only the classes of investments specified in section	1078
4123.443 of the Revised Code;	1079

(D) Prohibit investing the assets of those funds in any class	1080
of investments the board, by majority vote, closed, or any	1081
specific investment in which the board prohibits the administrator	1082
from investing;	1083

(E) Not specify in the investment policy that the	1084
administrator or employees of the bureau of workers' compensation	1085
are prohibited from conducting business with an investment	1086
management or consulting firm, any investment management or	1087
consulting professional associated with that firm, any third	1088
party solicitor associated with that firm, or any political	1089
action committee controlled by that firm or controlled by an	1090
investment management or consulting professional of that firm	1091
based on criteria that are more restrictive than the restrictions	1092
described in divisions (Y) and (Z) of section 3517.13 of the	1093
Revised Code.	1094

Sec. 4123.443. (A) The administrator of workers'	1095
compensation, in accordance with section 4123.44 of the Revised	1096
Code, may invest the surplus and reserve of each of the bureau of	1097
workers' compensation custodial funds in any of the following	1098
classes of investments:	1099

(1) Bonds and mortgages on unencumbered real estate within	1100
this or any other state worth twenty-five per cent more than the	1101
sum loaned thereon, exclusive of buildings, unless such buildings	1102
are insured by some company authorized to do business in this	1103
state;	1104

(2) Bonds, notes, debentures, and other such obligations	1105
secured by mortgages insured by the federal housing administrator	1106
or the secretary of agriculture of the United States under Title I	1107
of "The Bankhead-Jones Farm Tenant Act" as amended;	1108

(3) Loans to veterans guaranteed in whole or in part by the	1109
United States pursuant to Title III of the "Servicemen's	1110
Readjustment Act of 1944," 58 Stat. 284, 38 U.S.C. 693, as	1111
amended, provided such guaranteed loans are liens upon real	1112
estate;	1113

(4) Legally authorized and executed bonds, notes, warrants,	1114
and securities that are the direct obligation of or are guaranteed	1115
as to both principal and interest by Canada, that are the direct	1116
obligation of or are guaranteed as to both principal and interest	1117
by any province of Canada, that are the direct obligation of or	1118
are guaranteed as to both principal and interest by any municipal	1119
corporation of Canada having a population of one hundred thousand	1120
or more by the latest official census, and that are not in default	1121
as to principal or interest;	1122

(5) Obligations issued, assumed, or guaranteed by the	1123
international finance corporation or by the international bank for	1124
reconstruction and development, the Asian development bank, the	1125
inter-American development bank, the African development bank, or	1126
similar development bank in which the president, as authorized by	1127
congress and on behalf of the United States, has accepted	1128
membership.	1129

(6) Bonds or other evidences of indebtedness, not in default	1130
as to principal or interest, that are valid obligations issued,	1131
assumed, or guaranteed by the United States or for which the faith	1132
of the United States is pledged to provide payment of the interest	1133
and principal, by any state thereof, by the Commonwealth of Puerto	1134
Rico, by any territory or insular possession of the United States,	1135
or by the District of Columbia, or for which the faith of the	1136
state or the District of Columbia is pledged to provide payment of	1137
the interest and principal;	1138

(7) Bonds or other evidences of indebtedness, not in default	1139
as to principal or interest, that are valid obligations issued,	1140
assumed, or guaranteed by any county, municipal corporation,	1141
district, or political subdivision, or by any civil division or	1142
public instrumentality of such governmental units, if by statutory	1143
or other legal requirements such obligations are payable, as to	1144
both principal and interest, from taxes levied upon all taxable	1145
property within the jurisdiction of such governmental unit and if	1146
they are direct obligations of such a governmental unit, that unit	1147
has not defaulted for a period of more than one hundred twenty	1148
days in the payment of interest upon, or for a period of more than	1149
one year in the payment of principal of, any of its bonds, notes,	1150
warrants, securities, or other interest-bearing obligations,	1151
during the ten years immediately preceding the acquisition of such	1152
bonds, notes, warrants, securities, or other interest-bearing	1153
obligations;	1154

(8) Bonds or other obligations issued by or for account of	1155
any governmental unit specified in division (A)(7) of this	1156
section having a population of five thousand or more by the	1157
latest official federal or state census that are payable as to	1158
both principal and interest from revenues or earnings from the	1159
whole or any part of a publicly owned utility, provided that by	1160
statute or other applicable legal requirements, rates from the	1161
service or operation of such utility must be fixed, maintained,	1162
and collected at all times so as to produce sufficient revenues or	1163
earnings to pay both principal and interest of such bonds or	1164
obligations as they become due;	1165

(9) Any bonds or obligations issued or guaranteed by the	1166
United States, any state, the District of Columbia, the	1167
Commonwealth of Puerto Rico, any county, municipal corporation,	1168
district, political subdivision, civil division, commission,	1169
board, authority, agency, or other instrumentality of one or more	1170
of them, if all of the following apply:	1171

(a) There is a specific pledge of revenues, earnings, or	1172
other adequate security;	1173

(b) No prior or parity obligation of the same issuer, payable	1174
from revenues or earnings from the same source, has been in	1175
default as to principal or interest during the five years next	1176
preceding the date of such investment, but such issuer need not	1177
have been in existence for that period, and obligations acquired	1178
under this division may be newly issued;	1179

(c) There is adequate provision for payment of expenses of	1180
operation and maintenance and the principal and interest on all	1181
obligations when due.	1182

(10) Any bonds issued by or for federal land banks and any	1183
debentures issued by or for federal intermediate credit banks	1184
under the act of congress known as the "Federal Farm Loan Act of	1185
1916," 39 Stat. 360, 12 U.S.C. 641 and amendment thereto;	1186

(11) Any debentures issued by or for banks for cooperatives	1187
under the act of congress known as the "Farm Credit Act of 1933,"	1188
48 Stat. 257, 12 U.S.C. 131 and amendments thereto;	1189

(12) Bonds issued under the "Home Owners' Loan Act of 1933,"	1190
48 Stat. 128, 12 U.S.C. 1461;	1191

(13) The stock of a national bank located in this state,	1192
organized under an act of congress entitled "An act to provide a	1193
national currency, secured by the pledge of United States stocks,	1194
and to provide for the circulation and redemption thereof,"	1195
approved February 25, 1863, and acts amendatory thereof and	1196
supplementary thereto;	1197

(14) First mortgage bonds of railroads upon which default in	1198
the payment of the interest coupons has not been made within three	1199
years prior to the purchase thereof by the administrator;	1200

(15) Legally authorized and executed bonds, notes, warrants,	1201
and other interest-bearing securities of any school district,	1202
water district, road district; or any special district of any	1203
state or of the District of Columbia, if both of the following	1204
apply:	1205

(a) Such school district, water district, road district, or	1206
special district has been created by legislative action and is	1207
empowered to levy taxes on all taxable property in such district	1208
for the payment of such bonds, notes, warrants, and other	1209
interest-bearing securities.	1210

(b) Such school district, water district, road district, or	1211
special district has not defaulted for a period of more than one	1212
hundred twenty days in the payment of interest upon, or for a	1213
period of more than one year in the payment of principal of, its	1214
bonds, notes, warrants, and other interest-bearing securities,	1215
during the ten years immediately preceding the acquisition of such	1216
bonds, notes, warrants, and other interest-bearing securities.	1217

(16) Any securities described in section 77r-1 of the	1218
"Secondary Mortgage Market Enhancement Act of 1984," 98 Stat.	1219
1689, 15 U.S.C. 77r-1, subject to all of the limitations	1220
prescribed in divisions (B)(6) to (9) of this section for	1221
investments not guaranteed by the full faith and credit of the	1222
United States.	1223

(17) Notwithstanding division (A)(16) of this section, any of	1224
the following securities:	1225

(a) Securities offered and sold pursuant to 15 U.S.C. section	1226
77d(5);	1227

(b) Mortgage related securities described in 15 U.S.C.	1228
section 78c(a)(41);	1229

(c) Securities issued or guaranteed by the federal home loan	1230
mortgage corporation or the federal national mortgage association.	1231

(18) Bonds or other evidences of indebtedness, bearing or	1232
accruing interest, issued, assumed, or guaranteed by any solvent	1233
corporation, trust, partnership, or similar business entity	1234
organized and existing under the laws of this or any other state,	1235
or of the United States, the Commonwealth of Puerto Rico, or of	1236
the District of Columbia, or of Canada or any province of Canada,	1237
upon which there is no existing interest or principal default,	1238
provided that the bonds or other evidences of indebtedness are	1239
rated by at least one of the following:	1240

(a) Moody's service;

1241

(b) Standard and Poor's;

1242

(c) Fitch ratings.

1243

(19) Stocks or limited liability company membership interests	1244
of any insurance, financial, investment, or investment management	1245
companies if the investment management companies are registered	1246
with the securities and exchange commission under the "Investment	1247
Company Act of 1940," 54 Stat. 789, 15 U.S.C. 80a-1, as amended;	1248

(20) Other stocks of any solvent corporation organized under	1249
the laws of this or any other state, or of the United States, the	1250
District of Columbia, Canada, or any province of Canada;	1251

(21) Tangible personal property or interests in that property	1252
for the production of income, provided that the amount of assets	1253
of the bureau of workers' compensation custodial fund that is	1254
invested in such property or interests does not exceed two per	1255
cent of the admitted assets of that fund;	1256

(22) In equipment trust obligations or certificates, security	1257
agreements, or other evidences of indebtedness entered into or	1258
guaranteed by any company operating wholly or partly within the	1259
United States or Canada, if that debt obligation is secured by a	1260
first lien on tangible personal property that is purchased or	1261
secured for payment thereof and that debt obligation is repayable	1262
within twenty years from the date of issue in annual, semiannual,	1263
or more frequent installments beginning not later than the first	1264
year after that date;	1265

(23) Government money market funds and money market funds	1266
that have received the highest credit ratings for money market	1267
funds offered by either Standard and Poor's or Moody's service;	1268

(24) Negotiable promissory notes maturing in not more than	1269
six months from the date the note is issued, secured by collateral	1270
security through the transfer of any of the classes of securities	1271
described in this section, with absolute power of sale within	1272
twenty days after default in payment at maturity;	1273

(25) Repurchase agreements with and interest-bearing	1274
obligations of, including savings accounts and time certificates	1275
of deposit of a national bank of the United States, a commonwealth	1276
bank of Puerto Rico, a chartered bank of Canada, or a state bank,	1277
provided such bank is either a member of the federal deposit	1278
insurance corporation created pursuant to the "Banking Act of	1279
1933," as amended, or the Canada deposit insurance corporation	1280
created pursuant to the act of parliament known as the "Canada	1281
Deposit Insurance Corporation Act," as amended;	1282

(26) Certificates of deposit, savings share accounts,	1283
investment share accounts, stock deposits, stock certificates, or	1284
other evidences of indebtedness of a savings and loan association,	1285
provided all such evidences of indebtedness are insured pursuant	1286
to the "Financial Institutions Reform, Recovery, and Enforcement	1287
Act of 1989," 103 Stat. 183, 12 U.S.C. 1811, as amended;	1288

(27) Bankers' acceptances and bills of exchange of the kinds	1289
and maturities made eligible by law for rediscount with the	1290
federal reserve banks, provided that the same are accepted by a	1291
bank or trust company incorporated under the laws of the United	1292
States or of this state or any other bank or trust company which	1293
is a member of the federal reserve system;	1294

(28) Except as provided in division (A) of section 4123.444	1295
of the Revised Code, any of the following:	1296

(a) Bonds, notes, debentures, or other evidences of	1297
indebtedness issued, assumed, or guaranteed by a solvent	1298
corporation, trust, or partnership formed or existing under the	1299
laws of a foreign jurisdiction, provided each such foreign	1300
investment is of the same kind and quality as United States	1301
investments authorized under this section;	1302

(b) Common or preferred stock or shares of any solvent	1303
corporation formed or existing under the laws of a foreign	1304
jurisdiction, provided each such foreign investment is of the same	1305
kind and quality as United States investments authorized under	1306
this section;	1307

(c) Bonds or other evidences of indebtedness issued, assumed,	1308
or guaranteed by a foreign jurisdiction.	1309

(29) Except as provided in division (B) of section 4123.444	1310
of the Revised Code, investments denominated in foreign currency	1311
regardless of whether they are foreign investments;	1312

(30) Any securities or other property not otherwise permitted	1313
under this section, provided that the total amount of the assets	1314
of an individual bureau of workers' compensation custodial fund	1315
that is invested in those investments does not exceed, in the	1316
aggregate, six per cent of the total admitted assets of that fund	1317
and provided that those investments are made within the	1318
limitations prescribed in division (C) of section 4123.444 of the	1319
Revised Code;	1320

(31) Within the limitations prescribed in division (C) of	1321
section 4123.444 of the Revised Code, loans or investments in	1322
small businesses having more than half of their assets or	1323
employees in this state and venture capital firms having an	1324
office within this state, provided that, as a condition of the	1325
administrator making an investment in a venture capital firm, the	1326
firm must agree to use its best efforts to make investments, in an	1327
aggregate amount at least equal to the investment to be made by	1328
the administrator in that venture capital firm, in small	1329
businesses having their principal offices within this state and	1330
having either more than one-half of their assets within this state	1331
or more than one-half of their employees employed within this	1332
state, and provided that the amount of assets of a bureau of	1333
workers' compensation custodial fund that is invested in such	1334
investments does not exceed five per cent of the total admitted	1335
assets of that fund.	1336

(B) For purposes of this section and section 4123.444 of the	1337
Revised Code, the admitted assets of an individual bureau of	1338
workers' compensation custodial fund shall be calculated as of	1339
the thirty-first day of December immediately preceding the date	1340
the value of the applicable fund is determined.	1341

(C) As used in this section and section 4123.444 of the	1342
Revised Code:	1343

(1) "Foreign currency" means a currency other than that of	1344
the United States.	1345

(2) "Foreign jurisdiction" means a jurisdiction outside the	1346
United States, Puerto Rico, or Canada whose bonds are rated 1 by	1347
the securities valuation office of the national association of	1348
insurance commissioners.	1349

(3) "Government money market fund" means a fund that at all	1350
times invests in obligations issued, guaranteed, or insured by the	1351
federal government of the United States or collateralized	1352
repurchase agreements comprised of such obligations, and that	1353
qualifies for investment without a reserve pursuant to the	1354
purposes and procedures of the securities valuation office of the	1355
national association of insurance commissioners.	1356

(4) "Small businesses" means any corporation, partnership,	1357
proprietorship, or other entity that either does not have more	1358
than four hundred employees, or would qualify as a small business	1359
for the purpose of receiving financial assistance from small	1360
business investment companies licensed under the "Small Business	1361
Investment Act of 1958," 72 Stat. 689, 15 U.S.C. 661, as amended,	1362
and rules of the small business administration.	1363

(5) "Venture capital firm" means any corporation,	1364
partnership, proprietorship, or other entity, the principal	1365
business of which is or will be the making of investments in small	1366
businesses.	1367

(D) As used in division (A)(31) of this section,	1368
"investments" means any equity investment, including limited	1369
partnership interests and other equity interests in which	1370
liability is limited to the amount of the investment, but does not	1371
include general partnership interests or other interests involving	1372
general liability.	1373

Sec. 4123.444. (A) The administrator of workers' compensation	1374
shall not invest the assets of an individual bureau of workers'	1375
compensation custodial fund in foreign investments under	1376
division (A)(28) of section 4123.443 of the Revised Code,	1377
including investments denominated in foreign currency, in a sum	1378
exceeding in the aggregate fifteen per cent of the admitted	1379
assets of that fund. The aggregate amount of the assets of a	1380
bureau of workers' compensation custodial fund that is invested	1381
in a single foreign jurisdiction shall not exceed three per cent	1382
of the admitted assets of the surplus and reserve of that fund.	1383

(B) The administrator shall not invest the assets of an	1384
individual bureau of workers' compensation custodial fund in	1385
investments denominated in foreign currency in a sum exceeding in	1386
the aggregate ten per cent of the admitted assets of that fund.	1387
The aggregate amount of the assets of a bureau of workers'	1388
compensation custodial fund that is invested in investments	1389
denominated in a single foreign currency shall not exceed three	1390
per cent of the admitted assets of that fund.	1391

(C) The administrator shall not, at any time, invest the	1392
assets of an individual bureau of workers' compensation custodial	1393
fund in a sum exceeding five per cent of the admitted assets of	1394
that fund in the bonds, notes, debentures, other evidences of	1395
indebtedness, and stocks of a particular corporation, trust,	1396
partnership, or similar business entity and shall not, at any	1397
time, own directly or indirectly more than twenty-five per cent of	1398
the outstanding bonds, notes, debentures, other evidences of	1399
indebtedness, and stocks of any corporation.	1400

(D) In the event that, subsequent to being made under	1401
division (A)(31) of section 4123.443 of the Revised Code, a loan	1402
or investment is determined to have become qualified as a loan or	1403
investment under any of the divisions (A)(1) to (A)(25) of that	1404
section, the administrator may consider such loan or investment as	1405
held under those divisions and such loan or investment shall no	1406
longer be considered as having been made under division (A)(31) of	1407
that section.	1408

(E) The administrator shall not own more than one-fourth of	1409
the capital stock of a national bank, shall not invest the assets	1410
of an individual bureau of workers' compensation custodial fund in	1411
the stocks and bonds of any railroad company or loan on any such	1412
stocks and bonds held in that fund in an amount that exceeds	1413
one-fifth of the surplus and reserve of that fund, and shall not	1414
invest the assets of an individual bureau of workers'	1415
compensation custodial fund in railroad property or loan on such	1416
property held in that fund in an amount that exceeds, in the	1417
aggregate, one-fourth of the surplus and reserve of that fund.	1418

The amount of assets of a bureau of workers' compensation	1419
custodial fund invested in real estate in accordance with section	1420
4123.443 of the Revised Code shall not exceed at any one time,	1421
ten per cent of the assets of the surplus and reserve of that	1422
fund. The amount of assets of a bureau of workers' compensation	1423
custodial fund invested in any one real estate investment shall	1424
not exceed at any one time, two per cent of the assets of the	1425
surplus and reserve of that fund. Nothing in this division	1426
authorizes the administrator to use an investment in real estate	1427
primarily for recreational, agricultural, or mining purposes.	1428

Sec. 4123.444.        Sec. 4123.445.  (A) As used in this section and	1429
section 4123.4454123.446 of the Revised Code:	1430

(1) "Bureau of workers' compensation funds" means any fund	1431
specified in Chapter 4121., 4123., 4127., or 4131. of the Revised	1432
Code that the administrator of workers' compensation has the	1433
authority to invest, in accordance with the administrator's	1434
investment authority under section 4123.44 of the Revised Code.	1435

(2) "Investment manager" means any person with whom the	1436
administrator of workers' compensation contracts pursuant to	1437
section 4123.44 of the Revised Code to facilitate the investment	1438
of assets of bureau of workers' compensation custodial funds.	1439

(3)(2) "Business entity" means any person with whom an	1440
investment manager contracts for the investment of assets of	1441
bureau of workers' compensation custodial funds.	1442

(4)(3) "Financial or investment crime" means any criminal	1443
offense involving theft, receiving stolen property, embezzlement,	1444
forgery, fraud, passing bad checks, money laundering, drug	1445
trafficking, or any criminal offense involving money or	1446
securities, as set forth in Chapters 2909., 2911., 2913., 2915.,	1447
2921., 2923., and 2925. of the Revised Code or other law of this	1448
state, or the laws of any other state or the United States that	1449
are substantially equivalent to those offenses.	1450

(4) "Investment consultant" means any person with whom the	1451
administrator contracts pursuant to section 4123.44 of the Revised	1452
Code to obtain the person's advice and opinions in order to	1453
facilitate the investment of assets of bureau of workers'	1454
compensation custodial funds.	1455

(B)(1) Before entering into a contract with an investment	1456
manager to invest bureau of workers' compensation custodial	1457
funds, the administrator shall do both of the following:	1458

(a) Request from any investment manager with whom the	1459
administrator wishes to contract for those investments a list of	1460
all employees who will be investing assets of bureau of workers'	1461
compensation custodial funds. The list shall specify each	1462
employee's state of residence for the five years prior to the	1463
date of the administrator's request.	1464

(b) Request that the superintendent of the bureau of criminal	1465
investigation and identification conduct a criminal records check	1466
in accordance with this section and section 109.579 of the Revised	1467
Code with respect to every employee the investment manager names	1468
in that list.	1469

(2) After an investment manager enters into a contract with	1470
the administrator to invest bureau of workers' compensation	1471
custodial funds and before an investment manager enters into a	1472
contract with a business entity to facilitate those investments,	1473
the investment manager shall request from any business entity	1474
with whom the investment manager wishes to contract to make those	1475
investments a list of all employees who will be investing assets	1476
of the bureau of workers' compensation custodial funds. The list	1477
shall specify each employee's state of residence for the five	1478
years prior to the investment manager's request. The investment	1479
manager shall forward to the administrator the list received from	1480
the business entity. The administrator shall request the	1481
superintendent to conduct a criminal records check in accordance	1482
with this section and section 109.579 of the Revised Code with	1483
respect to every employee the business entity names in that list.	1484
Upon receipt of the results of the criminal records check, the	1485
administrator shall advise the investment manager whether the	1486
results were favorable or unfavorable.	1487

(3) If, after a contract has been entered into between the	1488
administrator and an investment manager or between an investment	1489
manager and a business entity for the investment of assets of	1490
bureau of workers' compensation custodial funds, the investment	1491
manager or business entity wishes to have an employee who was	1492
not the subject of a criminal records check under division	1493
(B)(1) or (B)(2) of this section invest assets of the bureau of	1494
workers' compensation custodial funds, that employee shall be the	1495
subject of a criminal records check pursuant to this section and	1496
section 109.579 of the Revised Code prior to handling the	1497
investment of assets of those funds. The investment manager	1498
shall submit to the administrator the name of that employee	1499
along with the employee's state of residence for the five years	1500
prior to the date in which the administrator requests the	1501
criminal records check. The administrator shall request that the	1502
superintendent conduct a criminal records check on that employee	1503
pursuant to this section and section 109.579 of the Revised Code.	1504

(4) Before entering into a contract with an investment	1505
consultant regarding the investment of bureau of workers'	1506
compensation custodial funds, the administrator shall do both of	1507
the following:	1508

(a) Request from any investment consultant with whom the	1509
administrator wishes to contract a list of all employees who will	1510
be providing advice and opinions regarding the investment of the	1511
assets of bureau of workers' compensation custodial funds. The	1512
list shall specify each employee's state of residence for the	1513
five years prior to the date of the administrator's request.	1514

(b) Request that the superintendent of the bureau of criminal	1515
investigation and identification conduct a criminal records check	1516
in accordance with this section and section 109.579 of the Revised	1517
Code with respect to every employee the investment consultant	1518
names in that list.	1519

(5) If, after a contract has been entered into between the	1520
administrator and an investment consultant, the investment	1521
consultant wishes to have an employee who was not the subject of	1522
a criminal records check under division (B)(4) of this section	1523
provide advice and opinions regarding the investment of the	1524
assets of the bureau of workers' compensation custodial funds,	1525
that employee shall be the subject of a criminal records check	1526
pursuant to this section and section 109.579 of the Revised Code	1527
prior to providing advice and opinions regarding the investment of	1528
assets of those funds. The investment consultant shall submit to	1529
the administrator the name of that employee along with the	1530
employee's state of residence for the five years prior to the	1531
date in which the administrator requests the criminal records	1532
check. The administrator shall request that the superintendent	1533
conduct a criminal records check on that employee pursuant to	1534
this section and section 109.579 of the Revised Code.	1535

(C)(1) If an employee who is the subject of a criminal	1536
records check pursuant to division (B) of this section has not	1537
been a resident of this state for the five-year period immediately	1538
prior to the time the criminal records check is requested or does	1539
not provide evidence that within that five-year period the	1540
superintendent has requested information about the employee from	1541
the federal bureau of investigation in a criminal records check,	1542
the administrator shall request that the superintendent obtain	1543
information from the federal bureau of investigation as a part of	1544
the criminal records check for the employee. If the employee has	1545
been a resident of this state for at least that five-year period,	1546
the administrator may, but is not required to, request that the	1547
superintendent request and include in the criminal records check	1548
information about that employee from the federal bureau of	1549
investigation.	1550

(2) The administrator shall provide to an investment manager	1551
or consultant a copy of the form prescribed pursuant to division	1552
(C)(1) of section 109.579 of the Revised Code and a standard	1553
impression sheet for each employee for whom a criminal records	1554
check must be performed, to obtain fingerprint impressions as	1555
prescribed pursuant to division (C)(2) of section 109.579 of the	1556
Revised Code. TheAn investment manager shall obtain the	1557
completed form and impression sheet either directly from each	1558
employee or from a business entity and shall forward the completed	1559
form and sheet to the administrator, who shall forward these forms	1560
and sheets to the superintendent. An investment consultant shall	1561
obtain the completed form and impression sheet directly from each	1562
employee and shall forward the completed form and sheet to the	1563
administrator, who shall forward these forms and sheets to the	1564
superintendent.	1565

(3) Any employee who receives a copy of the form and the	1566
impression sheet pursuant to division (C)(2) of this section and	1567
who is requested to complete the form and provide a set of	1568
fingerprint impressions shall complete the form or provide all the	1569
information necessary to complete the form and shall complete the	1570
impression sheets in the manner prescribed in division (C)(2) of	1571
section 109.579 of the Revised Code.	1572

(D) For each criminal records check the administrator	1573
requests under this section, at the time the administrator makes a	1574
request the administrator shall pay to the superintendent the fee	1575
the superintendent prescribes pursuant to division (E) of section	1576
109.579 of the Revised Code.	1577

Sec. 4123.445.        Sec. 4123.446.  (A) The administrator of workers'	1578
compensation shall not enter into a contract with an investment	1579
manager for the investment of assets of the bureau of workers'	1580
compensation custodial funds if any employee of that investment	1581
manager who will be investing assets of bureau of workers'	1582
compensation custodial funds has been convicted of or pleaded	1583
guilty to a financial or investment crime.	1584

(B) An investment manager who has entered into a contract	1585
with the bureau of workers' compensation for the investment of	1586
assets of bureau of workers' compensation custodial funds shall	1587
not contract with a business entity for the investment of those	1588
assets if any employee of that business manager who will be	1589
investing assets of bureau of workers' compensation custodial	1590
funds has been convicted of or pleaded guilty to a financial or	1591
investment crime.	1592

(C) The administrator shall not enter into a contract with an	1593
investment consultant if any employee of that investment	1594
consultant who will be providing advice and opinions regarding the	1595
investment of the assets of bureau of workers' compensation	1596
custodial funds has been convicted of or pleaded guilty to a	1597
financial or investment crime.	1598

(D) The administrator shall not enter into a contract with an	1599
investment manager or consultant who refuses to submit the list of	1600
the investment manager's or consultant's employees required under	1601
division (B) of section 4123.4444123.445 of the Revised Code. An	1602
investment manager shall not enter into a contract with a business	1603
entity who refuses to submit the list of the business entity's	1604
employees required under division (B) of section 4123.4444123.445	1605
of the Revised Code.	1606

(D)(E) If, after a contract has been awarded to an investment	1607
manager or, business entity for the investment of assets of bureau	1608
of workers' compensation funds, or an investment consultant, the	1609
investment manager or, business entity, or investment consultant	1610
discovers that an employee who is handling the investment of	1611
those assets, or an employee who is providing advice and opinions	1612
regarding the investment of those assets, as applicable, has been	1613
convicted of or pleaded guilty to a financial or investment crime,	1614
the investment manager or, business entity, or investment	1615
consultant immediately shall notify the administrator.	1616

Sec. 4123.447.  When in the judgment of the administrator of	1617
workers' compensation it is necessary to provide available funds	1618
for the payment of compensation or benefits under this chapter or	1619
Chapter 4121., 4127., or 4131. of the Revised Code, the	1620
administrator may borrow money from any available source, deposit	1621
the money received in the bureau of workers' compensation	1622
custodial fund from which such compensation and benefits are	1623
paid, and pledge as security a sufficient amount of bonds or	1624
other securities in which the assets of that fund are invested.	1625
The aggregate unpaid amount of loans existing at any one time for	1626
money so borrowed shall not exceed ten million dollars. The bonds	1627
or other securities so pledged as security for such loans to the	1628
administrator shall be the sole security for the payment of the	1629
principal and interest of any such loan. The administrator shall	1630
not be personally liable for the payment of the principal or the	1631
interest of any such loan. No such loan shall be made for a longer	1632
period of time than one year. Such loans may be renewed but no one	1633
renewal shall be for a period in excess of one year. Such loans	1634
shall bear such rate of interest as the administrator determines	1635
and in negotiating the loans, the administrator shall endeavor to	1636
secure as favorable interest rates and terms as circumstances will	1637
permit.	1638

The treasurer of state may deliver to the person or	1639
governmental agency making such loan, the bonds or other	1640
securities which are to be pledged by the administrator as	1641
security for such loan, upon receipt by the treasurer of state of	1642
an order of the administrator authorizing such loan. Upon payment	1643
of any such loan by the administrator, the bonds or other	1644
securities pledged as security therefor shall be returned to the	1645
treasurer of state as custodian of such bonds.	1646

The administrator may pledge with the treasurer of state such	1647
amount of bonds or other securities in which the assets of the	1648
particular bureau of workers' compensation custodial fund are	1649
invested as is reasonably necessary as security for any	1650
certificates issued, or paid out, by the treasurer of state upon	1651
any warrants drawn by the administrator.	1652

Sec. 4123.443.        Sec. 4123.448.  Rental payments by the bureau of	1653
workers' compensation or the industrial commission to or for the	1654
benefit of the state insurance fund for each building owned by the	1655
bureau that was constructed or acquired as an investment in	1656
productive real estate, shall be made pursuant to a lease	1657
agreement for a term that shall not exceed two years. Beginning	1658
July 1, 1991, the rental payments to be made under each such lease	1659
agreement shall include the amount needed to amortize the	1660
construction or acquisition costs for the building over a period	1661
not to exceed twenty-five years, and, until such costs are	1662
amortized, an amount representing return on investment to the	1663
state insurance fund determined by multiplying the unamortized	1664
acquisition or construction costs of the building by a rate that	1665
is not more than three per cent below the rate determined by the	1666
tax commissioner under division (B) of section 5703.47 of the	1667
Revised Code.	1668

Sec. 4127.05.  The premiums, collected under this chapter	1669
shall be paid into a separate fund to be known as the "public	1670
work-relief employees' compensation fund," and all compensation,	1671
death benefits, and expenses for medical, nurse, and hospital	1672
services, medicine, and funerals, shall be paid out of the fund.	1673

Such premiums shall be collected, the moneys of the fund	1674
disbursed and the fund maintained, without regard to or reliance	1675
upon any other fund mentioned in Chapter 4123. of the Revised	1676
Code.	1677

This section shall not prevent the deposit or investment of	1678
the moneys of the public work-relief employees' compensation fund	1679
with the moneys of the state insurance fund provided for in	1680
Chapter 4123. of the Revised Code, but such funds shall be	1681
separate for all other purposes.	1682

The administrator of workers' compensation may invest the	1683
surplus and reserve belonging to the fund in accordance with	1684
section 4123.44 of the Revised Code.	1685

Sec. 4131.03.  (A) For the relief of persons who are entitled	1686
to receive benefits by virtue of the federal act, there is hereby	1687
established a coal-workers pneumoconiosis fund, which shall be	1688
separate from the funds established and administered pursuant to	1689
Chapter 4123. of the Revised Code. The fund shall consist of	1690
premiums and other payments thereto by subscribers who elect to	1691
subscribe to the fund to insure the payment of benefits required	1692
by the federal act.	1693

(B)(1) The coal-workers pneumoconiosis fund shall be in the	1694
custody of the treasurer of state. The bureau of workers'	1695
compensation shall make disbursements from the fund to those	1696
persons entitled to payment therefrom and in the amounts required	1697
pursuant to sections 4131.01 to 4131.06 of the Revised Code. All	1698
investment earnings of the fund shall be credited to the fund.	1699

(2) The administrator of workers' compensation may transfer a	1700
portion of the investment earnings credited to the coal-workers	1701
pneumoconiosis fund to the mine safety fund created in section	1702
1561.24 of the Revised Code for the purposes specified in that	1703
section. The administrator, with the advice and consent of the	1704
bureau of workers' compensation board of directors, shall adopt	1705
rules governing the transfer in order to ensure the solvency of	1706
the coal-workers pneumoconiosis fund. For that purpose, the rules	1707
may establish tests based on measures of net assets, liabilities,	1708
expenses, interest, dividend income, or other factors that the	1709
administrator determines appropriate that may be applied prior to	1710
a transfer.	1711

(C) The administrator shall have the same powers tomay	1712
invest any of the surplus orand reserve belonging to the	1713
coal-workers pneumoconiosis fund as are delegated to the	1714
administrator underin accordance with section 4123.44 of the	1715
Revised Code with respect to the state insurance fund.	1716

(D) If the administrator determines that reinsurance of the	1717
risks of the coal-workers pneumoconiosis fund is necessary to	1718
assure solvency of the fund, the administrator may:	1719

(1) Enter into contracts for the purchase of reinsurance	1720
coverage of the risks of the fund with any company or agency	1721
authorized by law to issue contracts of reinsurance;	1722

(2) Pay the cost of reinsurance from the fund;

1723

(3) Include the costs of reinsurance as a liability and	1724
estimated liability of the fund.	1725

Sec. 4131.13.  (A) For the relief of persons who are entitled	1726
to receive benefits by virtue of the federal act, there is hereby	1727
established a marine industry fund, which shall be separate from	1728
the funds established and administered pursuant to Chapter 4123.	1729
of the Revised Code. The marine industry fund shall consist of	1730
premiums and other payments thereto by marine industry employers	1731
who apply to the bureau of workers' compensation for permission to	1732
subscribe to the fund to insure the payment of benefits required	1733
by the federal act.	1734

By rule, the administrator of workers' compensation shall	1735
establish criteria for the acceptance or rejection of applications	1736
by marine industry employers who apply to subscribe to the fund.	1737

(B) The marine industry fund shall be in the custody of the	1738
treasurer of state. The bureau shall make disbursements from the	1739
fund to those persons entitled to payment therefrom and in the	1740
amounts required pursuant to the federal act. The auditor of state	1741
annually shall complete a fiscal audit of the fund. All investment	1742
earnings of the fund shall be credited to the fund.	1743

(C) The administrator shall have the same powers tomay	1744
invest any of the surplus orand reserve belonging to the marine	1745
industry fund as are delegated to him underin accordance with	1746
section 4123.44 of the Revised Code with respect to the state	1747
insurance fund.	1748

(D) If the bureau of workers' compensation board of directors	1749
determines that reinsurance of the risks of the marine industry	1750
fund is necessary to assure solvency of the fund, the board may:	1751

(1) Enter into contracts for the purchase of reinsurance	1752
coverage of the risks of the fund with any company or agency	1753
authorized by law to issue contracts of reinsurance;	1754

(2) Require the administrator to pay the cost of reinsurance	1755
from the fund;	1756

(3) Include the costs of reinsurance as a liability and	1757
estimated liability of the fund.	1758

(E) For the purpose of maintaining the solvency of the marine	1759
industry fund, the administrator may borrow money from the state	1760
insurance fund as is necessary. Money borrowed from the state	1761
insurance fund shall be repaid from the marine industry fund	1762
together with an appropriate interest rate not to exceed the	1763
average yield of fixed income investments of the state insurance	1764
fund for the six-month period ended on the last day of the month	1765
preceding the month in which the money is borrowed. Loans made	1766
pursuant to this division are a proper investment of the surplus	1767
or reserve of the state insurance fund.	1768

(F) In no event shall any of the assets of any of the funds	1769
created and administered pursuant to Chapter 4123. of the Revised	1770
Code be disbursed in payment of any cost or obligation of or	1771
insured by the marine industry fund. This division shall not be	1772
construed to prohibit as a proper investment loans made from the	1773
state insurance fund to the marine industry fund pursuant to	1774
division (E) of this section.	1775

Section 2. That existing sections 109.579, 4121.12, 4121.79,	1776
4123.01, 4123.34, 4123.351, 4123.412, 4123.44, 4123.442, 4123.443,	1777
4123.444, 4123.445, 4127.05, 4131.03, and 4131.13 of the Revised	1778
Code are hereby repealed.	1779

Section 3. The Bureau of Workers' Compensation Board of	1780
Directors shall approve an investment policy that meets the	1781
requirements of sections 4121.12 and 4123.442 of the Revised	1782
Code, as amended by this act, no later than ninety days after the	1783
effective date of this act. The investment policy in existence on	1784
the effective date of this act shall remain in effect until the	1785
Board approves the new investment policy.	1786

Section 4. This act applies to investments made on or after	1787
the effective date of the investment policy approved by the Bureau	1788
of Workers' Compensation Board of Directors pursuant to Section 3	1789
of this act.	1790