5% Debt Service Limitation
Section 17 of Article VIII of the Ohio Constitution, approved by Ohio voters in November 1999, establishes an annual debt service "cap" applicable to future issuances of State direct obligations payable from the general revenue fund (GRF) or net State lottery proceeds. Generally, new obligations may not be issued if debt service for any future Fiscal Year on those new and the then outstanding bonds of those categories would exceed 5% of the total of estimated GRF revenues plus net State lottery proceeds for the Fiscal Year of issuance.
Those direct obligations of the State include general obligation and special obligation bonds that are paid from the State's GRF, but exclude (i) general obligation debt for both third frontier research and development and the development of sites for industry commerce, distribution and research and development, and (ii) general obligation debt payable from non-GRF funds (such as highway bonds that are paid from highway user receipts). Pursuant to the implementing legislation, the Governor has designated the OBM Director as the State official responsible for making the 5% determinations and certifications. Application of the 5% cap may be waived in a particular instance by a three-fifths vote of each house of the Ohio General Assembly, and that cap does not apply to bonds issued to retire bond anticipation notes for which the requirements were met as to the bonds anticipated at the time of note issuance, or to debt issued to defend the State in time of war.
Terms of Use and Disclaimers
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Information in this Debt Management area of the OBM website is not an offer to sell securities or the solicitation of an offer to buy securities, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of such jurisdiction.
You are entering web pages that contain information relating to debt management and bonds or other obligations of the State of Ohio. The purpose of this section is to provide general information about the State of Ohio and its debt management and borrowing programs. The information is provided for quick reference only and is not a summary or a compilation of information for any particular bond issue. It does not purport to include every item which may be of interest, nor does it purport to present full and fair disclosure within the meaning of applicable securities law with respect to any of the matters or programs addressed. Investment decisions should be made only after full review of the official statement and other relevant matters in connection with a particular bond issue.
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