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Research & Policy
Policy Matters Ohio

Safeguards for Issue 1

November 21, 2005

Safeguards for Issue 1

November 21, 2005

League of Women Voters - LWV Cincinnati Voters Guide

LWV Cincinnati Area Voter

The General Assembly soon will take up legislation to implement Issue 1, the constitutional amendment passed by Ohio voters on Nov. 8. To ensure that government funds are spent in the most effective manner and provide the greatest benefit to Ohioans, the implementing legislation should ensure the accountability of all public funds used for Third Frontier projects by all levels of government, universities and other nonprofits, and the private sector.

The amendment says that the General Assembly shall provide for ensuring the accountability of all state funding provided for the purposes described in the amendment.

The bipartisan Agreement in Principle reached last summer by the legislative leadership on the implementing legislation for the amendment calls for accountability, integrity and transparency with respect to the disbursement of funds for the three components of this bond issuance.

The amendment itself also instructs the General Assembly to include
economically disadvantaged businesses and individuals in all areas of this state in its implementation.

The General Assembly should enact legislation consistent with these provisions and the Agreement in Principle, which contained six issues to be addressed in the implementing legislation.

In order to ensure accountability and maximize benefits, the legislature should also consider the following recommendations:

• Disclosure rules that provide a full accounting for the progress being made by beneficiaries of the program, as well as public access to records and meetings;

• Periodic outside review of the program by the Auditor of State;

• Availability to the State of Ohio and local governments at favorable terms of products and services commercialized using Third Frontier funds;

• A transparent and competitive selection process for loans, grants, and all other forms of assistance;

• Competitive bidding for all contracts let by the Ohio Department of Development (ODOD) and other state agencies for program administration and requirements for the review of potential conflicts-of-interest by contractors and their employees;

• Expansion of the Third Frontier Advisory Board in keeping with the amendment’s promise to include economically disadvantaged businesses and individuals and to better reflect the broad range of policy issues affected by the program; and

• A thorough, outside review of the issues raised by public funding of the creation, use, and disposition of intellectual property, which will serve as the basis for a legislative study committee on this topic.

Membership in Third Frontier Advisory Board - At present, the Third Frontier Advisory Board is comprised of sixteen members. Nine members represent business, five represent research organizations, and two are legislators.

The size of the board should be expanded for two reasons.

First, Issue 1 specifically requires that the state make an effort to include economically disadvantaged businesses and individuals in Third Frontier funding, and the Agreement in Principle calls for an outreach effort to minority businesses and individuals. Second, the present composition of the board does not adequately reflect the broad range of issues it faces.

In order to address these issues, the implementing legislation should add four board members. These members should be selected as follows:

• One owner or representative of an Ohio-based minority-owned business;

• One expert in community economic development from a non-profit organization that works with economically and socially disadvantaged individuals to provide training or support for entrepreneurship;

• One expert from a non-profit environmental advocacy organization with a background in regulatory affairs, and

• One representative from a labor organization.

Excerpted from a November 2005 Policy Matters report by Jon Honeck, PhD and Zach Schiller.

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