Governor Kasich signed HB 390 into law this week. Under the new law, libraries will have the ability to issue special bonds and borrow funds against their proceeds from the Public Library Fund (PLF) AND local property tax levies. This will reflect the library’s actual ability to repay the debt, result in better bond ratings and ultimately save taxpayer dollars. The new law will take effect at the end of September.

Before the OLC’s amendment to HB 390, if a library wanted to borrow funds for a building project, only the library’s state funding through the PLF was considered for purposes of collateral. This led to lower bond credit ratings for the libraries and ultimately cost Ohio taxpayers more money for projects.

Under Ohio Revised Code (ORC) 3375.404, lenders were not able to consider the additional funds received through library property tax levies. This authority was added to the ORC many years ago when the only source of revenue for the majority of libraries was state funding. At that time, relatively few libraries had local property tax levies.

Today, about 75 percent of Ohio’s public libraries have local property tax levies. The new law will provide a better picture of a library’s ability to repay the debt.

The OLC worked with House Finance Committee Chairman Ryan Smith (R-Gallipolis) and Sen. Randy Gardner (R-Bowling Green) to update the ORC and include the library bond language in HB 390.

A copy of the Legislative Service Commission’s (LSC) summary of HB 390 is available at https://www.legislature.ohio.gov/download?key=5438&format=pdf. The changes requested by OLC are described on page 54 of the summary.