As Introduced                            1            

123rd General Assembly                                             4            

   Regular Session                                H. B. No. 473    5            

      1999-2000                                                    6            


     REPRESENTATIVES MYERS-SCHULER-ALLEN-JOLIVETTE-HARTNETT-       8            

                   CLANCY-OLMAN-METZGER-DISTEL                     9            


_________________________________________________________________   10           

                          A   B I L L                                           

                                                                   12           

             To amend sections 135.14, 135.18, 135.181, 135.33,    13           

                135.35, 135.37, 321.16, and 321.17 of the Revised  14           

                Code to modify the investment authority of         15           

                counties and political subdivisions relative to                 

                the collateral requirements applicable to the      16           

                receipt of public funds and the investment of      17           

                public funds in repurchase agreements; to modify   19           

                the designation period of public depositories by   20           

                county commissioners; to authorize a political                  

                subdivision to retain the services of an           21           

                investment advisor; to authorize electronic                     

                presentment of warrant information to a county     22           

                treasurer; and to make related changes.            23           




BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO:        25           

      Section 1. That sections 135.14, 135.18, 135.181, 135.33,    27           

135.35, 135.37, 321.16, and 321.17 of the Revised Code be amended  28           

to read as follows:                                                29           

      Sec. 135.14.  (A)  As used in this section, "treasurer"      38           

does not include the treasurer of state, and "governing board"     39           

does not include the state board of deposit.                       40           

      (B)  The treasurer or governing board may invest or deposit  42           

any part or all of the interim moneys.  The following              44           

classifications of obligations shall be eligible for such          45           

investment or deposit:                                                          

                                                          2      


                                                                 
      (1)  United States treasury bills, notes, bonds, or any      47           

other obligation or security issued by the United States treasury  48           

or any other obligation guaranteed as to principal and interest    49           

by the United States.                                                           

      Nothing in the classification of eligible obligations set    51           

forth in division (B)(1) of this section or in the                 52           

classifications of eligible obligations set forth in divisions     53           

(B)(2) to (6) of this section shall be construed to authorize any  54           

investment in stripped principal or interest obligations of such   55           

eligible obligations.                                                           

      (2)  Bonds, notes, debentures, or any other obligations or   57           

securities issued by any federal government agency or              58           

instrumentality, including but not limited to, the federal         59           

national mortgage association, federal home loan bank, federal     60           

farm credit bank, federal home loan mortgage corporation,          61           

government national mortgage association, and student loan                      

marketing association.  All federal agency securities shall be     62           

direct issuances of federal government agencies or                 63           

instrumentalities.                                                              

      (3)  Interim deposits in the eligible institutions applying  65           

for interim moneys as provided in section 135.08 of the Revised    66           

Code.  The award of interim deposits shall be made in accordance   67           

with section 135.09 of the Revised Code and the treasurer or the   68           

governing board shall determine the periods for which such         69           

interim deposits are to be made and shall award such interim       70           

deposits for such periods, provided that any eligible institution  71           

receiving an interim deposit award may, upon notification that     72           

the award has been made, decline to accept the interim deposit in  73           

which event the award shall be made as though such institution     74           

had not applied for such interim deposit.                          75           

      (4)  Bonds and other obligations of this state;              77           

      (5)  No-load money market mutual funds consisting            79           

exclusively of obligations described in division (B)(1) or (2) of  81           

this section and repurchase agreements secured by such                          

                                                          3      


                                                                 
obligations, provided that investments in securities described in  83           

this division are made only through eligible institutions                       

mentioned in section 135.03 of the Revised Code;                   84           

      (6)  The Ohio subdivision's fund as provided in section      86           

135.45 of the Revised Code.                                        87           

      (C)  Nothing in the classifications of eligible obligations  89           

set forth in divisions (B)(1) to (6) of this section shall be      90           

construed to authorize any investment in a derivative, and no      91           

treasurer or governing board shall invest in a derivative.  For    92           

purposes of this division, "derivative" means a financial          93           

instrument or contract or obligation whose value or return is      94           

based upon or linked to another asset or index, or both, separate  95           

from the financial instrument, contract, or obligation itself.                  

Any security, obligation, trust account, or other instrument that  96           

is created from an issue of the United States treasury or is       97           

created from an obligation of a federal agency or instrumentality  98           

or is created from both is considered a derivative instrument.     99           

An eligible investment described in this section with a variable   100          

interest rate payment, based upon a single interest payment or     101          

single index comprised of other eligible investments provided for  102          

in division (B)(1) or (2) of this section, is not a derivative,    103          

provided that such variable rate investment has a maximum                       

maturity of two years.                                             104          

      (D)  Any EXCEPT AS PROVIDED IN DIVISION (E) OF THIS          106          

SECTION, ANY investment made pursuant to this section must mature  107          

within five years from the date of settlement, unless the          108          

investment is matched to a specific obligation or debt of the      109          

subdivision.                                                       110          

      (E)  The treasurer or governing board may also enter into a  112          

written repurchase agreement with any eligible institution         113          

mentioned in section 135.03 of the Revised Code or any eligible    114          

dealer pursuant to division (M) of this section, under the terms   115          

of which agreement the treasurer or governing board purchases,     116          

and such institution or dealer agrees unconditionally to           117          

                                                          4      


                                                                 
repurchase any of the securities listed in division DIVISIONS      118          

(B)(1) or (2) TO (5), EXCEPT LETTERS OF CREDIT DESCRIBED IN        119          

DIVISION (B)(2), of this section 135.18 OF THE REVISED CODE.  The  122          

market value of securities subject to an overnight WRITTEN                      

repurchase agreement must exceed the principal value of the        123          

overnight WRITTEN repurchase agreement by at least two per cent.   124          

A term WRITTEN repurchase agreement shall not exceed thirty days   126          

and the market value of securities subject to a term WRITTEN       127          

repurchase agreement must exceed the principal value of the term   128          

WRITTEN repurchase agreement by at least two per cent and be       129          

marked to market daily.  All securities purchased pursuant to      131          

this division shall be delivered into the custody of the                        

treasurer or governing board or an agent designated by the         132          

treasurer or governing board.  A WRITTEN repurchase agreement      133          

with an eligible securities dealer shall be transacted on a        135          

delivery versus payment basis.  The agreement shall contain the    136          

requirement that for each transaction pursuant to the agreement    137          

the participating institution or dealer shall provide all of the   138          

following information:                                                          

      (1)  The par value of the securities;                        140          

      (2)  The type, rate, and maturity date of the securities;    142          

      (3)  A numerical identifier generally accepted in the        144          

securities industry that designates the securities.                145          

      No treasurer or governing board shall enter into a written   147          

repurchase agreement under the terms of which the treasurer or     148          

governing board agrees to sell securities owned by the             149          

subdivision to a purchaser and agrees with that purchaser to       150          

unconditionally repurchase those securities.                                    

      (F)  No treasurer or governing board shall make an           152          

investment under this section, unless the treasurer or governing   153          

board, at the time of making the investment, reasonably expects    154          

that the investment can be held until its maturity.                155          

      (G)  No treasurer or governing board shall pay interim       157          

moneys into a fund established by another subdivision, treasurer,  158          

                                                          5      


                                                                 
governing board, or investing authority, if that fund was          159          

established for the purpose of investing the public moneys of      160          

other subdivisions.  This division does not apply to the payment   161          

of public moneys into either of the following:                                  

      (1)  The Ohio subdivision's fund pursuant to division        164          

(B)(6) of this section;                                                         

      (2)  A fund created solely for the purpose of acquiring,     166          

constructing, owning, leasing, or operating municipal utilities    167          

pursuant to the authority provided under section 715.02 of the     168          

Revised Code or Section 4 of Article XVIII, Ohio Constitution.     169          

      For purposes of division (G) of this section, "subdivision"  171          

includes a county.                                                 172          

      (H)  The use of leverage, in which the treasurer or          174          

governing board uses its current investment assets as collateral   175          

for the purpose of purchasing other assets, is prohibited.  The    176          

issuance of taxable notes for the purpose of arbitrage is          177          

prohibited.  Contracting to sell securities that have not yet      178          

been acquired by the treasurer or governing board, for the                      

purpose of purchasing such securities on the speculation that      179          

bond prices will decline, is prohibited.                           180          

      (I)  Whenever, during a period of designation, the           182          

treasurer classifies public moneys as interim moneys, the          183          

treasurer shall notify the governing board of such action.  Such   184          

THE notification shall be given within thirty days after such      185          

classification and in the event the governing board does not       186          

concur in such classification or in the investments or deposits    187          

made under this section, the governing board may order the         188          

treasurer to sell or liquidate any of such investments or          189          

deposits, and any such order shall specifically describe the       190          

investments or deposits and fix the date upon which they are to    191          

be sold or liquidated.  Investments or deposits so ordered to be   192          

sold or liquidated shall be sold or liquidated for cash by the     193          

treasurer on the date fixed in such order at the then current      194          

market price.  Neither the treasurer nor the members of the board  195          

                                                          6      


                                                                 
shall be held accountable for any loss occasioned by sales or      196          

liquidations of investments or deposits at prices lower than       197          

their cost.  Any loss or expense incurred in making such sales or  198          

liquidations is payable as other expenses of the treasurer's       199          

office.                                                                         

      (J)  If any investments or deposits purchased under the      201          

authority of this section are issuable to a designated payee or    202          

to the order of a designated payee, the name of the treasurer and  203          

the title of the treasurer's office shall be so designated.  If    204          

any such securities are registrable either as to principal or      205          

interest, or both, then such securities shall be registered in     206          

the name of the treasurer as such.                                 207          

      (K)  The treasurer is responsible for the safekeeping of     209          

all documents evidencing a deposit or investment acquired by the   210          

treasurer under this section.  Any securities may be deposited     211          

for safekeeping with a qualified trustee as provided in section    212          

135.18 of the Revised Code, except the delivery of securities      213          

acquired under any repurchase agreement under this section shall   214          

be made to a qualified trustee, provided, however, that the        215          

qualified trustee shall be required to report to the treasurer,    216          

governing board, auditor of state, or an authorized outside        217          

auditor at any time upon request as to the identity, market        218          

value, and location of the document evidencing each security, and  219          

that if the participating institution is a designated depository   220          

of the subdivision for the current period of designation, the      221          

securities that are the subject of the repurchase agreement may    222          

be delivered to the treasurer or held in trust by the              223          

participating institution on behalf of the subdivision.  Interest  224          

earned on any investments or deposits authorized by this section   225          

shall be collected by the treasurer and credited by the treasurer  227          

to the proper fund of the subdivision.                                          

      Upon the expiration of the term of office of a treasurer or  229          

in the event of a vacancy in the office of treasurer by reason of  230          

death, resignation, removal from office, or otherwise, the         231          

                                                          7      


                                                                 
treasurer or the treasurer's legal representative shall transfer   232          

and deliver to the treasurer's successor all documents evidencing  233          

a deposit or investment held by the treasurer.  For the            234          

investments and deposits so transferred and delivered, such        235          

treasurer shall be credited with and the treasurer's successor     236          

shall be charged with the amount of money held in such                          

investments and deposits.                                          237          

      (L)  Whenever investments or deposits acquired under this    239          

section mature and become due and payable, the treasurer shall     240          

present them for payment according to their tenor, and shall       241          

collect the moneys payable thereon.  The moneys so collected       242          

shall be treated as public moneys subject to sections 135.01 to    243          

135.21 of the Revised Code.                                        244          

      (M)(1)  All investments, except for investments in           246          

securities described in divisions (B)(5) and (6) of this section   247          

and for investments by a municipal corporation in the issues of    248          

such municipal corporation, shall be made only through a member    249          

of the national association of securities dealers, through a       250          

bank, savings bank, or savings and loan association regulated by   251          

the superintendent of financial institutions, or through an        252          

institution regulated by the comptroller of the currency, federal  253          

deposit insurance corporation, or board of governors of the        254          

federal reserve system.                                                         

      (2)  Payment for investments shall be made only upon the     256          

delivery of securities representing such investments to the        257          

treasurer, governing board, or qualified trustee.  If the          258          

securities transferred are not represented by a certificate,       259          

payment shall be made only upon receipt of confirmation of         260          

transfer from the custodian by the treasurer, governing board, or  261          

qualified trustee.                                                 262          

      (N)(1)  IN MAKING INVESTMENTS AUTHORIZED BY THIS SECTION, A  264          

TREASURER OR GOVERNING BOARD MAY RETAIN THE SERVICES OF AN         266          

INVESTMENT ADVISOR, PROVIDED THE ADVISOR IS REGISTERED WITH THE    267          

SECURITIES AND EXCHANGE COMMISSION AND POSSESSES EXPERIENCE IN     268          

                                                          8      


                                                                 
PUBLIC FUNDS INVESTMENT MANAGEMENT, SPECIFICALLY IN THE AREA OF    269          

STATE AND LOCAL GOVERNMENT INVESTMENT PORTFOLIOS, OR THE ADVISOR   270          

IS AN ELIGIBLE INSTITUTION MENTIONED IN SECTION 135.03 OF THE      271          

REVISED CODE.                                                      272          

      (O)(1)  Except as otherwise provided in divisions (N)(O)(2)  275          

and (3) of this section, no treasurer or governing board shall     276          

make an investment or deposit under this section, unless there is  278          

on file with the auditor of state a written investment policy      279          

approved by the treasurer or governing board. The policy shall     280          

require that all entities conducting investment business with the  281          

treasurer or governing board shall sign the investment policy of   282          

that subdivision.  All brokers, dealers, and financial             283          

institutions, described in division (M)(1) of this section,        284          

initiating transactions with the treasurer or governing board by   285          

giving advice or making investment recommendations shall sign the  286          

treasurer's or governing board's investment policy thereby                      

acknowledging their agreement to abide by the policy's contents.   287          

All brokers, dealers, and financial institutions, described in     288          

division (M)(1) of this section, executing transactions initiated  289          

by the treasurer or governing board, having read the policy's      290          

contents, shall sign the investment policy thereby acknowledging   291          

their comprehension and receipt.                                                

      (2)  If a written investment policy described in division    293          

(N)(O)(1) of this section is not filed on behalf of the            295          

subdivision with the auditor of state, the treasurer or governing  296          

board of that subdivision shall invest the subdivision's interim   297          

moneys only in interim deposits pursuant to division (B)(3) of     298          

this section or the Ohio subdivision's fund pursuant to division   299          

(B)(6) of this section.                                                         

      (3)  Divisions (N)(O)(1) and (2) of this section do not      301          

apply to a treasurer or governing board of a subdivision whose     303          

average annual portfolio of investments held pursuant to this      304          

section is one hundred thousand dollars or less, provided that     305          

the treasurer or governing board certifies, on a form prescribed   306          

                                                          9      


                                                                 
by the auditor of state, that the treasurer or governing board     307          

will comply and is in compliance with the provisions of sections   308          

135.01 to 135.21 of the Revised Code.                              309          

      (O)(P)  A treasurer or governing board may enter into a      312          

written investment or deposit agreement that includes a provision  313          

under which the parties agree to submit to nonbinding arbitration  314          

to settle any controversy that may arise out of the agreement,     315          

including any controversy pertaining to losses of public moneys    316          

resulting from investment or deposit.  The arbitration provision   317          

shall be set forth entirely in the agreement, and the agreement    318          

shall include a conspicuous notice to the parties that any party   320          

to the arbitration may apply to the court of common pleas of the   321          

county in which the arbitration was held for an order to vacate,                

modify, or correct the award.  Any such party may also apply to    322          

the court for an order to change venue to a court of common pleas  323          

located more than one hundred miles from the county in which the   324          

treasurer or governing board is located.                           325          

      For purposes of this division, "investment or deposit        327          

agreement" means any agreement between a treasurer or governing    328          

board and a person, under which agreement the person agrees to     329          

invest, deposit, or otherwise manage a subdivision's interim       330          

moneys on behalf of the treasurer or governing board, or agrees    331          

to provide investment advice to the treasurer or governing board.               

      (P)(Q)  An investment made by the treasurer or governing     333          

board pursuant to this section prior to the effective date of      334          

this amendment SEPTEMBER 27, 1996, that was a legal investment     336          

under the law as it existed before the effective date of this      338          

amendment SEPTEMBER 27, 1996, may be held until maturity, or if    339          

the investment does not have a maturity date, it may be held       340          

until five years from the effective date of this amendment         342          

SEPTEMBER 27, 1996, regardless of whether the investment would     343          

qualify as a legal investment under the terms of this section as   344          

amended.                                                                        

      Sec. 135.18.  (A)  The treasurer, before making the initial  353          

                                                          10     


                                                                 
deposit in a public depository pursuant to an award made under     354          

sections 135.01 to 135.21 of the Revised Code, shall require the   355          

institution designated as a public depository to pledge to and     356          

deposit with the treasurer, as security for the repayment of all   357          

public moneys to be deposited in the public depository during the  358          

period of designation pursuant to the award, eligible securities   359          

of aggregate market value equal to the excess of the amount of     360          

public moneys to be at the time so deposited, over and above such  361          

portion or amount of such moneys as is at such time insured by     362          

the federal deposit insurance corporation or by any other agency   363          

or instrumentality of the federal government, or the treasurer     364          

may require the institution to deposit with the treasurer surety   365          

company bonds which, when executed, shall be for an amount equal   366          

to such excess amount.  In the case of any deposit other than the  367          

initial deposit made during the period of designation, the amount  368          

of the aggregate market value of securities required to be         369          

pledged and deposited, or of the surety company bonds required to  370          

be deposited, shall be equal to the difference between the amount  371          

of public moneys on deposit in such public depository plus the     372          

amount to be so deposited, minus the portion or amount of the      373          

aggregate as is at the time insured as provided in this section.   374          

The treasurer may require additional eligible securities to be     375          

deposited to provide for any depreciation which may occur in the   376          

market value of any of the securities so deposited.                377          

      (B)  The following securities shall be eligible for the      379          

purposes of this section:                                          380          

      (1)  Bonds, notes, or other obligations of the United        382          

States; or bonds, notes, or other obligations guaranteed as to     383          

principal and interest by the United States or those for which     384          

the faith of the United States is pledged for the payment of       385          

principal and interest thereon, by language appearing in the       386          

instrument specifically providing such guarantee or pledge and     387          

not merely by interpretation or otherwise;                         388          

      (2)  Bonds, notes, debentures, letters of credit, or other   390          

                                                          11     


                                                                 
obligations or securities issued by any federal government agency  391          

or instrumentality, or the export-import bank of Washington;       392          

bonds, notes, or other obligations guaranteed as to principal and  393          

interest by the United States or those for which the faith of the  394          

United States is pledged for the payment of principal and          395          

interest thereon, by interpretation or otherwise and not by        396          

language appearing in the instrument specifically providing such   397          

guarantee or pledge;                                                            

      (3)  Obligations of or fully insured or fully guaranteed by  399          

the United States or any federal government agency or              400          

instrumentality;                                                                

      (4)  Obligations partially insured or partially guaranteed   402          

by any federal agency or instrumentality;                          403          

      (5) Obligations of or fully guaranteed by the federal        405          

national mortgage association, federal home loan mortgage          406          

corporation, federal farm credit bank, or student loan marketing   407          

association;                                                                    

      (6)  Bonds and other obligations of this state;              409          

      (7)  Bonds and other obligations of any county, township,    411          

school district, municipal corporation, or other legally           412          

constituted taxing subdivision of this state, which is not at the  413          

time of such deposit, in default in the payment of principal or    414          

interest on any of its bonds or other obligations, for which the   415          

full faith and credit of the issuing subdivision is pledged;       417          

      (8)  Bonds of other states of the United States which have   419          

not during the ten years immediately preceding the time of such    420          

deposit defaulted in payments of either interest or principal on   421          

any of their bonds;                                                422          

      (9)  Shares of no-load money market mutual funds consisting  425          

exclusively of obligations described in division (B)(1) or (2) of               

this section and repurchase agreements secured by such             426          

obligations;                                                       427          

      (10) A SURETY BOND ISSUED BY A CORPORATE SURETY LICENSED BY  429          

THE STATE AND AUTHORIZED TO ISSUE SURETY BONDS IN THIS STATE       430          

                                                          12     


                                                                 
PURSUANT TO CHAPTER 3929. OF THE REVISED CODE.                     431          

      (C)  If the public depository fails to pay over any part of  433          

the public deposit made therein as provided by law, the treasurer  434          

shall sell at public sale any of the bonds or other securities     435          

deposited with the treasurer pursuant to this section or section   436          

131.09 of the Revised Code, or shall draw on any letter of credit  437          

to the extent of such failure to pay.  Thirty days' notice of      438          

such sale shall be given in a newspaper of general circulation at  439          

Columbus, in the case of the treasurer of state, and at the        440          

county seat of the county in which the office of the treasurer is  441          

located, in the case of any other treasurer.  When a sale of       442          

bonds or other securities has been so made and upon payment to     443          

the treasurer of the purchase money, the treasurer shall transfer  444          

such bonds or securities whereupon the absolute ownership of such  445          

bonds or securities shall pass to the purchasers.  Any surplus     446          

remaining after deducting the amount due the state or subdivision  447          

and expenses of sale shall be paid to the public depository.       448          

      (D)  An institution designated as a public depository may,   450          

by written notice to the treasurer, designate a qualified trustee  451          

and deposit the eligible securities required by this section with  452          

the trustee for safekeeping for the account of the treasurer and   453          

the institution as a public depository, as their respective        454          

rights to and interests in such securities under this section may  455          

appear and be asserted by written notice to or demand upon the     456          

trustee.  In such case, the treasurer shall accept the written     457          

receipt of the trustee describing the securities which have been   458          

deposited with the trustee by the public depository, a copy of     459          

which shall also be delivered to the public depository.            460          

Thereupon all such securities so deposited with the trustee are    461          

deemed to be pledged with the treasurer and to be deposited with   462          

the treasurer, for all the purposes of this section.               463          

      (E)  The governing board may make provisions for the         465          

exchange and release of securities and the substitution of other   466          

eligible securities therefor except where the public depository    467          

                                                          13     


                                                                 
has deposited eligible securities with a trustee for safekeeping   468          

as provided in this section.                                       469          

      (F)  When the public depository has deposited eligible       471          

securities described in division (B)(1) of this section with a     472          

trustee for safekeeping, the public depository may at any time     473          

substitute or exchange eligible securities described in division   474          

(B)(1) of this section having a current market value equal to or   475          

greater than the current market value of the securities then on    476          

deposit and for which they are to be substituted or exchanged,     477          

without specific authorization from any governing board, boards,   478          

or treasurer of any such substitution or exchange.                 479          

      (G)  When the public depository has deposited eligible       481          

securities described in divisions (B)(2) to (9) of this section    483          

with a trustee for safekeeping, the public depository may at any                

time substitute or exchange eligible securities having a current   484          

market value equal to or greater than the current market value of  485          

the securities then on deposit and for which they are to be        486          

substituted or exchanged without specific authorization of any     487          

governing board, boards, or treasurer of any such substitution or  488          

exchange only if:                                                  489          

      (1)  The treasurer has authorized the public depository to   491          

make such substitution or exchange on a continuing basis during a  492          

specified period without prior approval of each substitution or    493          

exchange.  Such authorization may be effected by the treasurer     494          

sending to the trustee a written notice stating that substitution  495          

may be effected on a continuing basis during a specified period    496          

which shall not extend beyond the end of the period of             497          

designation during which the notice is given.  The trustee may     498          

rely upon such notice and upon the period of authorization stated  499          

therein and upon the period of designation stated therein.         500          

      (2)  No continuing authorization for substitution has been   502          

given by the treasurer, the public depository notifies the         503          

treasurer and the trustee of an intended substitution or           504          

exchange, and the treasurer fails to object to the trustee as to   505          

                                                          14     


                                                                 
the eligibility or market value of the securities being            506          

substituted within ten calendar days after the date appearing on   507          

the notice of proposed substitution.  The notice to the treasurer  508          

and to the trustee shall be given in writing and delivered         509          

personally or by certified or registered mail with a return        510          

receipt requested.  The trustee may assume in any case that the    511          

notice has been delivered to the treasurer.  In order for          512          

objections of the treasurer to be effective, receipt of the        513          

objections must be acknowledged in writing by the trustee.         514          

      (3)  The treasurer gives written authorization for a         516          

substitution or exchange of specific securities.                   517          

      (H)  The public depository shall notify any governing        519          

board, boards, or treasurer of any such substitution or exchange   520          

under division (G)(1) or (2) of this section.  Upon request from   521          

the treasurer, the trustee shall furnish a statement of the        522          

securities pledged against such public deposits.                   523          

      (I)  Any federal reserve bank or branch thereof located in   525          

this state, without compliance with Chapter 1111. of the Revised   526          

Code and without becoming subject to any other law of this state   529          

relative to the exercise by corporations of trust powers           530          

generally, is qualified to act as trustee for the safekeeping of   531          

securities, under this section.  Any institution mentioned in      532          

section 135.03 of the Revised Code that holds a certificate of     533          

qualification issued by the superintendent of financial            534          

institutions or any institution complying with sections 1111.04,                

1111.05, and 1111.06 of the Revised Code, is qualified to act as   536          

trustee for the safekeeping of securities, other than those        537          

belonging to itself, under this section.  Upon application to the  538          

superintendent in writing by any such institution, the                          

superintendent shall investigate the applicant and ascertain       540          

whether or not it has been authorized to execute and accept        541          

trusts in this state and has safe and adequate vaults and          542          

efficient supervision thereof for the storage and safekeeping      543          

within this state of such securities.  If the superintendent       544          

                                                          15     


                                                                 
finds that the applicant has been so authorized and does have      545          

such vaults and supervision thereof, the superintendent shall      546          

approve the application and issue a certificate to that effect,    547          

the original or any certified copy of which shall be conclusive    548          

evidence that the institution therein named is qualified to act    549          

as trustee for the purposes of this section with respect to        550          

securities other than those belonging to itself.                                

      Notwithstanding the fact that a public depository is         552          

required to pledge eligible securities in certain amounts to       553          

secure deposits of public moneys, a trustee shall have no duty or  554          

obligation to determine the eligibility, market value, or face     555          

value of any securities deposited with the trustee by a public     556          

depository.  This applies in all situations including, without     557          

limitation, a substitution or exchange of securities.              558          

      Any charges or compensation of a designated trustee for      560          

acting as such under this section shall be paid by the public      561          

depository and in no event shall be chargeable to the state or     562          

the subdivision or to the treasurer or to any officer of the       563          

state or subdivision.  Such THE charges or compensation shall not  565          

be a lien or charge upon the securities deposited for safekeeping  566          

prior or superior to the rights to and interests in such           567          

securities of the state or the subdivision or of the treasurer.    568          

The treasurer and the treasurer's bonders or surety shall be       570          

relieved from any liability to the state or the subdivision or to               

the public depository for the loss or destruction of any           571          

securities deposited with a qualified trustee pursuant to this     572          

section.                                                                        

      Sec. 135.181.  (A)  As used in this section:                 581          

      (1)  "Public depository" means that term as defined in       583          

section 135.01 of the Revised Code, but also means an institution  584          

which receives or holds any public deposits as defined in section  585          

135.31 of the Revised Code.                                        586          

      (2)  "Public deposits," "public moneys," and "treasurer"     588          

mean those terms as defined in section 135.01 of the Revised       589          

                                                          16     


                                                                 
Code, but also have the same meanings as are set forth in section  590          

135.31 of the Revised Code.                                        591          

      (3)  "Subdivision" means that term as defined in section     593          

135.01 of the Revised Code, but also includes a county.            594          

      (B)  In lieu of the pledging requirements prescribed in      596          

sections 135.18 and 135.37 of the Revised Code, an institution     597          

designated as a public depository at its option may pledge a       598          

single pool of eligible securities to secure the repayment of all  599          

public moneys deposited in the institution and not otherwise       600          

secured pursuant to law, provided that at all times the total      601          

value of the securities so pledged, based on the valuations        602          

prescribed in division (C) of this section, is at least equal to   603          

one hundred ten FIVE per cent of the total amount of all public    604          

deposits to be secured by the pooled securities, including the     605          

portion of such deposits covered by any federal deposit            606          

insurance.  Each such institution shall carry in its accounting    607          

records at all times a general ledger or other appropriate         608          

account of the total amount of all public deposits to be secured   609          

by the pool, as determined at the opening of business each day,    610          

and the total value of securities pledged to secure such           611          

deposits.                                                          612          

      (C)  The following securities, at the specified valuations,  614          

DESCRIBED IN DIVISION (B) OF SECTION 135.18 OF THE REVISED CODE    615          

shall be eligible as collateral for the purposes of division (B)   616          

of this section, provided no such securities pledged as            617          

collateral are at any time in default as to either principal or    618          

interest:                                                          619          

      (1)  Obligations of or fully insured or fully guaranteed by  621          

the United States or any federal government agency or              622          

instrumentality:  at face value;                                   623          

      (2)  Obligations partially insured or partially guaranteed   625          

by any federal government agency or instrumentality:  at face      626          

value;                                                                          

      (3)  Obligations of or fully guaranteed by the federal       628          

                                                          17     


                                                                 
national mortgage association, federal home loan mortgage          629          

corporation, federal farm, credit bank, or student loan marketing  630          

association:  at face value;                                       631          

      (4)  Obligations of any state, county, municipal             633          

corporation, or other legally constituted authority of any state,  634          

or any instrumentality of any state, county, municipal             635          

corporation, or other authority, which are secured as to the       636          

payment of principal and interest by the holding in escrow of      637          

obligations of the United States for which the full faith and      638          

credit of the United States is pledged:  at face value;            639          

      (5)  Obligations of this state, or any county or other       641          

legally constituted authority of this state, or any                642          

instrumentality of this state, or such county or other authority:  643          

at face value;                                                     644          

      (6)  Obligations of any other state:  at ninety per cent of  646          

face value;                                                        647          

      (7)  Obligations of any county, municipal corporation, or    649          

other legally constituted authority of any other state, or any     650          

instrumentality of such county, municipal corporation, or other    651          

authority:  at eighty per cent of face value;                      652          

      (8)  Notes representing loans made to persons attending or   654          

planning to attend eligible institutions of education and to       655          

their parents, and insured or guaranteed by the United States or   656          

any agency, department, or other instrumentality thereof:  at      657          

face value;                                                                     

      (9)  Any other obligations the treasurer of state approves:  659          

at the percentage of face value the treasurer of state             660          

prescribes;                                                                     

      (10)  Shares of no-load money market mutual funds            662          

consisting exclusively of obligations described in division        663          

(C)(1), (2), or (3) of this section and repurchase agreements      664          

secured by such obligations:  at face value.                       665          

      (D)  The state and each subdivision shall have an undivided  667          

security interest in the pool of securities pledged by a public    668          

                                                          18     


                                                                 
depository pursuant to division (B) of this section in the         669          

proportion that the total amount of the state's or subdivision's   670          

public moneys secured by the pool bears to the total amount of     671          

public deposits so secured.                                        672          

      (E)  An institution designated as a public depository shall  674          

designate a qualified trustee and deposit with the trustee for     675          

safekeeping the eligible securities pledged pursuant to division   676          

(B) of this section.  The institution shall give written notice    677          

of the qualified trustee to any treasurer or treasurers            678          

depositing public moneys for which such securities are pledged.    679          

The treasurer shall accept the written receipt of the trustee      680          

describing the pool of securities so deposited by the depository,  681          

a copy of which also shall be delivered to the depository.         682          

      (F)  Any federal reserve bank or branch thereof located in   684          

this state, without compliance with Chapter 1111. of the Revised   685          

Code and without becoming subject to any other law of this state   688          

relative to the exercise by corporations of trust powers           689          

generally, is qualified to act as trustee for the safekeeping of   690          

securities, under this section.  Any institution mentioned in      691          

section 135.03 or 135.32 of the Revised Code which holds a                      

certificate of qualification issued by the superintendent of       692          

financial institutions or any institution complying with sections  694          

1111.04, 1111.05, and 1111.06 of the Revised Code is qualified to  695          

act as trustee for the safekeeping of securities under this        696          

section, other than those belonging to itself or to an affiliate   697          

as defined in division (A) of section 1101.01 of the Revised       698          

Code.  Upon application to the superintendent in writing by any    699          

such institution, the superintendent shall investigate the         701          

applicant and ascertain whether or not it has been authorized to   702          

execute and accept trusts in this state and has safe and adequate  703          

vaults and efficient supervision thereof for the storage and       704          

safekeeping of such securities.  If the superintendent finds that  705          

the applicant has been so authorized and does have such vaults     706          

and supervision thereof, the superintendent shall approve the      707          

                                                          19     


                                                                 
application and issue a certificate to that effect, the original   709          

or any certified copy of which shall be conclusive evidence that   710          

the institution named therein is qualified to act as trustee for   711          

the purposes of this section with respect to securities other      712          

than those belonging to itself or to an affiliate.                 713          

      (G)  The public depository at any time may substitute,       715          

exchange, or release eligible securities deposited with a          716          

qualified trustee pursuant to this section, provided that such     717          

substitution, exchange, or release does not reduce the total       718          

value of the securities, based on the valuations prescribed in     719          

division (C) of this section, to an amount that is less than one   720          

hundred ten FIVE per cent of the total amount of public deposits   721          

as determined pursuant to division (B) of this section.            723          

      (H)  Notwithstanding the fact that a public depository is    725          

required to pledge eligible securities in certain amounts to       726          

secure deposits of public moneys, a trustee shall have no duty or  727          

obligation to determine the eligibility, market value, or face     728          

value of any securities deposited with the trustee by a public     729          

depository.  This applies in all situations including, but not     730          

limited to, a substitution or exchange of securities, but          731          

excluding those situations effectuated by division (I) of this     732          

section in which the trustee is required to determine face and     733          

market value.                                                      734          

      (I)  If the public depository fails to pay over any part of  736          

the public deposits made therein as provided by law and secured    737          

pursuant to division (B) of this section, the treasurer shall      738          

give written notice of this failure to the qualified trustee       739          

holding the pool of securities pledged against public moneys       740          

deposited in the depository, and at the same time shall send a     741          

copy of this notice to the depository.  Upon receipt of such       742          

notice, the trustee shall transfer to the treasurer for public     743          

sale such of the pooled securities as may be necessary to produce  744          

an amount equal to the deposits made by the treasurer and not      745          

paid over, less the portion of such deposits covered by any        746          

                                                          20     


                                                                 
federal deposit insurance, plus any accrued interest due on such   747          

deposits; however, such THE amount shall not exceed the state's    748          

or subdivision's proportional security interest in the market      750          

value of the pool as of the date of the depository's failure to    751          

pay over the deposits, as such interest and value are determined   752          

by the trustee.  The treasurer shall sell at public sale any of    753          

the bonds or other securities so transferred.  Thirty days'        754          

notice of such sale shall be given in a newspaper of general       755          

circulation at Columbus, in the case of the treasurer of state,    756          

and at the county seat of the county in which the office of the    757          

treasurer is located, in the case of any other treasurer.  When a  758          

sale of bonds or other securities has been so made and upon        759          

payment to the treasurer of the purchase money, the treasurer      760          

shall transfer such bonds or securities whereupon the absolute     761          

ownership of such bonds or securities shall pass to the            762          

purchasers.  Any surplus after deducting the amount due the state  763          

or subdivision and expenses of sale shall be paid to the public    764          

depository.                                                                     

      (J)  Any charges or compensation of a designated trustee     766          

for acting as such under this section shall be paid by the public  767          

depository and in no event shall be chargeable to the state or     768          

subdivision or to the treasurer or to any officer of the state or  769          

subdivision.  Such THE charges or compensation shall not be a      770          

lien or charge upon the securities deposited for safekeeping       772          

prior or superior to the rights to and interests in such           773          

securities of the state or subdivision or of the treasurer.  The   774          

treasurer and the treasurer's bonders or surety shall be relieved  775          

from any liability to the state or subdivision or to the public    776          

depository for the loss or destruction of any securities           777          

deposited with a qualified trustee pursuant to this section.       778          

      (K)  In lieu of placing its unqualified endorsement on each  780          

security, a public depository pledging securities pursuant to      781          

division (B) of this section that are not negotiable without its   782          

endorsement or assignment may furnish to the qualified trustee     783          

                                                          21     


                                                                 
holding the securities an appropriate resolution and irrevocable   784          

power of attorney authorizing the trustee to assign the            785          

securities.  The resolution and power of attorney shall conform    786          

to such terms and conditions as the trustee prescribes.            787          

      (L)  Upon request of a treasurer no more often than four     789          

times per year, a public depository shall report the amount of     790          

public moneys deposited by the treasurer and secured pursuant to   791          

division (B) of this section, and the total value, based on the    792          

valuations prescribed in division (C) of this section, of the      793          

pool of securities pledged to secure public moneys held by the     794          

depository, including those deposited by the treasurer.  Upon      795          

request of a treasurer no more often than four times per year, a   796          

qualified trustee shall report such THE total value of the pool    797          

of securities deposited with it by the depository and shall        799          

provide an itemized list of the securities in the pool.  These     800          

reports shall be made as of the date the treasurer specifies.      801          

      Sec. 135.33.  (A)  The board of county commissioners shall   810          

meet every two FOUR years in the month next preceding the date of  812          

the expiration of its current period of designation for the        813          

purpose of designating its public depositories of active moneys    814          

for the next succeeding two-year FOUR-YEAR period commencing on    815          

the date of expiration of the preceding period.                    817          

      At least sixty days before such THE meeting, the county      819          

treasurer shall submit to the board an estimate of the aggregate   820          

amount of public moneys that might be available for deposit as     821          

active moneys at any one time during the next two-year FOUR-YEAR   822          

period.  Upon receipt of such estimate, the board shall            823          

immediately notify all eligible institutions that might desire to  824          

be designated as such public depositories of the date on which     825          

the designation is to be made; the amount that has been estimated  826          

to be available for deposit; and the date fixed as the last date   827          

on which applications may be submitted, that shall not be more     828          

than thirty days or less than ten days prior to the date set for   829          

the meeting designating public depositories.                       830          

                                                          22     


                                                                 
      (B)  Any eligible institution described in division (A) of   832          

section 135.32 of the Revised Code that has an office located      833          

within the territorial limits of the county is eligible to become  834          

a public depository of the active moneys of the county.  Each      835          

eligible institution desiring to be a public depository of such    836          

active moneys shall, not more than thirty days or less than ten    837          

days prior to the date fixed by this section, make application     838          

therefor in writing to the board of county commissioners.  Such    839          

THE application may specify the maximum amount of such public      840          

moneys that the applicant desires to receive and have on deposit   841          

at any time during the period covered by the designation.  Each    842          

application shall be accompanied by a financial statement of the   843          

applicant, under oath of its cashier, treasurer, or other officer  844          

as of the date of its latest report to the superintendent of       845          

banks or comptroller of the currency, and adjusted to show any     846          

changes therein prior to the date of the application, that shall   847          

include a statement of its public and nonpublic deposits.          848          

      (C)  The board of county commissioners, upon recommendation  850          

of the treasurer, shall designate, by resolution, one or more      851          

eligible institutions as public depositories for active moneys.    852          

In case the aggregate amount of active moneys applied for by       853          

institutions within the county is less than the amount estimated   854          

to be available for deposit, the board may designate as a public   855          

depository one or more eligible institutions that are              856          

conveniently located.  The original resolution of designation      857          

shall be certified to the treasurer and any institution            858          

designated as a public depository.                                 859          

      (D)  No service charge shall be made against any deposit of  861          

active moneys, or collected or paid, unless such service charge    862          

is the same as is customarily imposed by institutions receiving    863          

money on deposit subject to check, in which event the charge may   864          

be paid.                                                           865          

      (E)  Notwithstanding division (C) of this section, the       867          

board of county commissioners may authorize, by resolution, the    868          

                                                          23     


                                                                 
treasurer to deposit money necessary to pay the principal and      869          

interest on bonds and notes, and any fees incident thereto, in     870          

any bank within this state.                                        871          

      Moneys so deposited shall be transferred by the treasurer    873          

according to the terms of the agreement with the bank but shall    874          

remain as public moneys until such time as they are actually paid  875          

out by the bank.  Until such time as payments become due and       876          

payable on such principal or interest, the bank shall invest any   877          

moneys in the account in interest-bearing obligations at the       878          

highest, reasonable rate of interest obtainable.                   879          

      So long as moneys remain in the account, the bank shall      881          

deliver to the treasurer, at the end of each month, a statement    882          

showing an accounting of all activities in the account during the  883          

preceding month including, but not limited to, all payments made,  884          

all interest earned, and the beginning and ending balances,        885          

together with any coupons redeemed since the preceding statement   886          

was issued.                                                        887          

      Sec. 135.35.  (A)  The investing authority shall deposit or  896          

invest any part or all of the county's inactive moneys and shall   897          

invest all of the money in the county library and local            898          

government support fund when required by section 135.352 of the    899          

Revised Code.  The following classifications of securities and     900          

obligations are eligible for such deposit or investment:           901          

      (1)  United States treasury bills, notes, bonds, or any      903          

other obligation or security issued by the United States treasury  904          

or any other obligation guaranteed as to principal or interest by  905          

the United States.                                                              

      Nothing in the classification of eligible securities and     907          

obligations set forth in division (A)(1) of this section or in     908          

the classifications of eligible securities and obligations set     909          

forth in divisions (A)(2) to (9) of this section shall be          910          

construed to authorize any investment in stripped principal or     911          

interest obligations of such eligible securities and obligations.               

      (2)  Bonds, notes, debentures, or any other obligations or   913          

                                                          24     


                                                                 
securities issued by any federal government agency or              914          

instrumentality, including but not limited to, the federal         915          

national mortgage association, federal home loan bank, federal     916          

farm credit bank, federal home loan mortgage corporation,          917          

government national mortgage association, and student loan         918          

marketing association.  All federal agency securities shall be     919          

direct issuances of federal government agencies or                              

instrumentalities.                                                 920          

      (3)  Time certificates of deposit or savings or deposit      922          

accounts, including, but not limited to, passbook accounts, in     923          

any eligible institution mentioned in section 135.32 of the        924          

Revised Code;                                                      925          

      (4)  Bonds and other obligations of this state or the        927          

political subdivisions of this state, provided that such           928          

political subdivisions are located wholly or partly within the     929          

same county as the investing authority;                                         

      (5)  No-load money market mutual funds consisting            931          

exclusively of obligations described in division (A)(1) or (2) of  932          

this section and repurchase agreements secured by such             933          

obligations, provided that investments in securities described in  935          

this division are made only through eligible institutions                       

mentioned in section 135.32 of the Revised Code;                   936          

      (6)  The Ohio subdivision's fund as provided in section      938          

135.45 of the Revised Code.;                                       939          

      (7)  Securities lending agreements with any eligible         941          

institution mentioned in section 135.32 of the Revised Code that   942          

is a member of the federal reserve system or federal home loan     943          

bank, under the terms of which agreements the investing authority  945          

lends securities and the eligible institution agrees to            946          

simultaneously exchange either securities described in division                 

(A)(1) or (2) of this section or cash or both securities and       947          

cash, equal value for equal value;                                 948          

      (8)  Commercial paper issued by any corporation              950          

incorporated under the laws of the United States or a state if     951          

                                                          25     


                                                                 
both of the following conditions apply:                            952          

      (a)  Two nationally recognized rating agencies rank the      954          

commercial paper in either of their two highest categories;        955          

      (b)  The total amount invested in commercial paper at any    957          

time does not exceed five per cent of the county's total average   959          

portfolio, as determined and calculated by the investing           960          

authority.                                                                      

      (9)  Bankers acceptances, if the following conditions are    962          

met:                                                                            

      (a)  The acceptances mature in two hundred seventy days or   964          

fewer from the date of settlement;                                 965          

      (b)  The acceptances are eligible for purchase by the        967          

federal reserve system;                                            968          

      (c)  The total amount invested in bankers acceptances at     970          

any time does not exceed ten per cent of the county's total        971          

average portfolio, as determined and calculated by the investing   972          

authority.                                                                      

      (B)  Nothing in the classifications of eligible obligations  974          

and securities set forth in divisions (A)(1) to (9) of this        975          

section shall be construed to authorize investment in a            976          

derivative, and no investing authority shall invest any county     977          

inactive moneys or any moneys in a county library and local        978          

government support fund in a derivative.  For purposes of this     979          

division, "derivative" means a financial instrument or contract    980          

or obligation whose value or return is based upon or linked to                  

another asset or index, or both, separate from the financial       981          

instrument, contract, or obligation itself.  Any security,         982          

obligation, trust account, or other instrument that is created     983          

from an issue of the United States treasury or is created from an  984          

obligation of a federal agency or instrumentality or is created    985          

from both is considered a derivative instrument.  An eligible      986          

investment described in this section with a variable interest      987          

rate payment, based upon a single interest payment or single                    

index comprised of other eligible investments provided for in      988          

                                                          26     


                                                                 
division (A)(1) or (2) of this section, is not a derivative,       989          

provided that such variable rate investment has a maximum          990          

maturity of two years.                                                          

      (C)  Any EXCEPT AS PROVIDED IN DIVISION (D) OF THIS          992          

SECTION, ANY investment made pursuant to this section must mature  993          

within five years from the date of settlement, unless the          995          

investment is matched to a specific obligation or debt of the      996          

county, and the investment is specifically approved by the         997          

investment advisory committee.                                     998          

      (D)  The investing authority may also enter into a written   1,000        

repurchase agreement with any eligible institution mentioned in    1,002        

section 135.32 of the Revised Code or any eligible securities                   

dealer pursuant to division (J) of this section, under the terms   1,003        

of which agreement the investing authority purchases and the       1,004        

eligible institution or dealer agrees unconditionally to           1,006        

repurchase any of the securities listed in division (A)(1) or (2)  1,007        

DIVISIONS (B)(1) TO (5), EXCEPT LETTERS OF CREDIT DESCRIBED IN     1,008        

DIVISION (B)(2), of this section 135.18 OF THE REVISED CODE.  The  1,009        

market value of securities subject to an overnight WRITTEN         1,010        

repurchase agreement must exceed the principal value of the        1,012        

overnight WRITTEN repurchase agreement by at least two per cent.   1,014        

A term WRITTEN repurchase agreement must exceed the principal      1,015        

value of the overnight WRITTEN repurchase agreement, by at least   1,017        

two per cent.  A term WRITTEN repurchase agreement shall not       1,020        

exceed thirty days, and the market value of securities subject to  1,021        

a term WRITTEN repurchase agreement must exceed the principal      1,023        

value of the term WRITTEN repurchase agreement by at least two     1,024        

per cent and be marked to market daily.  All securities purchased  1,025        

pursuant to this division shall be delivered into the custody of   1,027        

the investing authority or the qualified custodian of the                       

investing authority or an agent designated by the investing        1,028        

authority.  A WRITTEN repurchase agreement with an eligible        1,030        

securities dealer shall be transacted on a delivery versus         1,031        

payment basis.  The agreement shall contain the requirement that   1,032        

                                                          27     


                                                                 
for each transaction pursuant to the agreement the participating   1,033        

institution shall provide all of the following information:        1,034        

      (1)  The par value of the securities;                        1,036        

      (2)  The type, rate, and maturity date of the securities;    1,038        

      (3)  A numerical identifier generally accepted in the        1,040        

securities industry that designates the securities.                1,041        

      No investing authority shall enter into a written            1,043        

repurchase agreement under the terms of which the investing        1,044        

authority agrees to sell securities owned by the county to a       1,046        

purchaser and agrees with that purchaser to unconditionally                     

repurchase those securities.                                       1,047        

      (E)  No investing authority shall make an investment under   1,050        

this section, unless the investing authority, at the time of                    

making the investment, reasonably expects that the investment can  1,051        

be held until its maturity.  The investing authority's written     1,052        

investment policy shall specify the conditions under which an      1,053        

investment may be redeemed or sold prior to maturity.              1,054        

      (F)  No investing authority shall pay a county's inactive    1,056        

moneys or moneys of a county library and local government support  1,057        

fund into a fund established by another subdivision, treasurer,    1,058        

governing board, or investing authority, if that fund was          1,059        

established by the subdivision, treasurer, governing board, or     1,060        

investing authority for the purpose of investing or depositing     1,061        

the public moneys of other subdivisions.  This division does not                

apply to the payment of public moneys into either of the           1,062        

following:                                                                      

      (1)  The Ohio subdivision's fund pursuant to division        1,064        

(A)(6) of this section;                                                         

      (2)  A fund created solely for the purpose of acquiring,     1,066        

constructing, owning, leasing, or operating municipal utilities    1,067        

pursuant to the authority provided under section 715.02 of the     1,068        

Revised Code or Section 4 of Article XVIII, Ohio Constitution.     1,069        

      For purposes of division (F) of this section, "subdivision"  1,071        

includes a county.                                                 1,072        

                                                          28     


                                                                 
      (G)  The use of leverage, in which the county uses its       1,074        

current investment assets as collateral for the purpose of         1,075        

purchasing other assets, is prohibited.  The issuance of taxable   1,076        

notes for the purpose of arbitrage is prohibited.  Contracting to  1,077        

sell securities not owned by the county, for the purpose of        1,078        

purchasing such securities on the speculation that bond prices                  

will decline, is prohibited.                                       1,079        

      (H)  Any securities, certificates of deposit, deposit        1,081        

accounts, or any other documents evidencing deposits or            1,082        

investments made under authority of this section shall be issued   1,083        

in the name of the county with the county treasurer or investing   1,084        

authority as the designated payee.  If any such deposits or        1,085        

investments are registrable either as to principal or interest,    1,086        

or both, they shall be registered in the name of the treasurer.    1,087        

      (I)  The investing authority shall be responsible for the    1,089        

safekeeping of all documents evidencing a deposit or investment    1,090        

acquired under this section including, but not limited to,         1,091        

safekeeping receipts evidencing securities deposited with a        1,092        

qualified trustee, as provided in section 135.37 of the Revised    1,093        

Code, and documents confirming the purchase of securities under    1,094        

any repurchase agreement under this section shall be deposited     1,095        

with a qualified trustee, provided, however, that the qualified    1,096        

trustee shall be required to report to the investing authority,    1,097        

auditor of state, or an authorized outside auditor at any time     1,098        

upon request as to the identity, market value, and location of     1,099        

the document evidencing each security, and that if the             1,100        

participating institution is a designated depository of the        1,101        

county for the current period of designation, the securities that  1,102        

are the subject of the repurchase agreement may be delivered to    1,103        

the treasurer or held in trust by the participating institution    1,104        

on behalf of the investing authority.                              1,105        

      Upon the expiration of the term of office of an investing    1,107        

authority or in the event of a vacancy in the office for any       1,108        

reason, the officer or the officer's legal representative shall    1,110        

                                                          29     


                                                                 
transfer and deliver to the officer's successor all documents                   

mentioned in this division for which the officer has been          1,111        

responsible for safekeeping.  For all such documents transferred   1,113        

and delivered, such officer shall be credited with, and the        1,114        

officer's successor shall be charged with, the amount of moneys    1,115        

so evidenced by such documents.                                                 

      (J)(1)  All investments, except for investments in           1,117        

securities described in divisions (A)(5) and (6) of this section,  1,119        

shall be made only through a member of the national association    1,120        

of securities dealers, through a bank, savings bank, or savings    1,121        

and loan association regulated by the superintendent of financial  1,123        

institutions, or through an institution regulated by the           1,124        

comptroller of the currency, federal deposit insurance             1,125        

corporation, or board of governors of the federal reserve system.  1,126        

      (2)  Payment for investments shall be made only upon the     1,128        

delivery of securities representing such investments to the        1,130        

treasurer, investing authority, or qualified trustee.  If the      1,131        

securities transferred are not represented by a certificate,       1,132        

payment shall be made only upon receipt of confirmation of         1,133        

transfer from the custodian by the treasurer, governing board, or  1,134        

qualified trustee.                                                              

      (K)(1)  Except as otherwise provided in division (K)(2) of   1,136        

this section, no investing authority shall make an investment or   1,137        

deposit under this section, unless there is on file with the       1,138        

auditor of state a written investment policy approved by the       1,139        

investing authority.  The policy shall require that all entities   1,140        

conducting investment business with the investment authority       1,141        

shall sign the investment policy of that investment authority.                  

All brokers, dealers, and financial institutions, described in     1,142        

division (J)(1) of this section, initiating transactions with the  1,144        

investment authority by giving advice or making investment         1,145        

recommendations shall sign the investment authority's investment   1,146        

policy thereby acknowledging their agreement to abide by the                    

policy's contents.  All brokers, dealers, and financial            1,147        

                                                          30     


                                                                 
institutions, described in division (J)(1) of this section,        1,148        

executing transactions initiated by the investment authority,      1,149        

having read the policy's contents, shall sign the investment       1,150        

policy thereby acknowledging their comprehension and receipt.                   

      (2)  If a written investment policy described in division    1,152        

(K)(1) of this section is not filed on behalf of the county with   1,153        

the auditor of state, the investing authority of that county       1,154        

shall invest the county's inactive moneys and moneys of the        1,155        

county library and local government support fund only in time      1,156        

certificates of deposits or savings or deposit accounts pursuant   1,157        

to division (A)(3) of this section or the Ohio subdivision's fund  1,158        

pursuant to division (A)(6) of this section.                                    

      (L)(1)  The investing authority shall establish and          1,160        

maintain an inventory of all obligations and securities acquired   1,161        

by the investing authority pursuant to this section.  The          1,162        

inventory shall include a description of each obligation or        1,163        

security, including type, cost, par value, maturity date,          1,164        

settlement date, and any coupon rate.                                           

      (2)  The investing authority shall also keep a complete      1,166        

record of all purchases and sales of the obligations and           1,167        

securities made pursuant to this section.                          1,168        

      (3)  The investing authority shall maintain a monthly        1,170        

portfolio report and issue a quarterly investment report           1,171        

describing such investments to the county investment advisory      1,172        

committee, detailing the current inventory of all obligations and  1,173        

securities, all transactions during the month that affected the    1,174        

inventory, any income received from the obligations and                         

securities, and any investment expenses paid, and stating the      1,175        

names of any persons effecting transactions on behalf of the       1,176        

investing authority.                                                            

      (4)  The monthly portfolio report and the quarterly          1,178        

investment report shall be public records and available for        1,179        

inspection under section 149.43 of the Revised Code.                            

      (5)  The inventory, the monthly portfolio report, and the    1,181        

                                                          31     


                                                                 
quarterly investment report shall be on standard forms approved    1,182        

by the auditor of state and shall be filed with the board of       1,183        

county commissioners.                                                           

      (M)  An investing authority may enter into a written         1,186        

investment or deposit agreement that includes a provision under    1,187        

which the parties agree to submit to nonbinding arbitration to     1,188        

settle any controversy that may arise out of the agreement,        1,189        

including any controversy pertaining to losses of public moneys    1,190        

resulting from investment or deposit.  The arbitration provision   1,191        

shall be set forth entirely in the agreement, and the agreement    1,192        

shall include a conspicuous notice to the parties that any party   1,194        

to the arbitration may apply to the court of common pleas of the   1,195        

county in which the arbitration was held for an order to vacate,                

modify, or correct the award.  Any such party may also apply to    1,196        

the court for an order to change venue to a court of common pleas  1,197        

located more than one hundred miles from the county in which the   1,198        

investing authority is located.                                                 

      For purposes of this division, "investment or deposit        1,200        

agreement" means any agreement between an investing authority and  1,201        

a person, under which agreement the person agrees to invest,       1,202        

deposit, or otherwise manage, on behalf of the investing           1,203        

authority, a county's inactive moneys or moneys in a county                     

library and local government support fund, or agrees to provide    1,204        

investment advice to the investing authority.                      1,205        

      (N)  An investment held in the county portfolio on the       1,207        

effective date of this amendment SEPTEMBER 27, 1996, that was a    1,209        

legal investment under the law as it existed before the effective  1,210        

date of this amendment SEPTEMBER 27, 1996, may be held until       1,211        

maturity, or if the investment does not have a maturity date the   1,212        

investment may be held until five years from the effective date    1,213        

of this amendment SEPTEMBER 27, 1996, regardless of whether the    1,215        

investment would qualify as a legal investment under the terms of               

this section as amended.                                           1,216        

      Sec. 135.37.  (A)  Any institution described in section      1,225        

                                                          32     


                                                                 
135.32 of the Revised Code shall, at the time it receives a        1,226        

deposit of public moneys under section 135.33 or 135.35 of the     1,227        

Revised Code, pledge to and deposit with the investing authority,  1,228        

as security for the repayment of all public moneys to be           1,229        

deposited, eligible securities of aggregate market value equal to  1,230        

or in excess of the amount of public moneys to be at the time so   1,231        

deposited.  Any securities listed in division (B) of section       1,232        

135.18 of the Revised Code are eligible for such purpose.  The     1,233        

collateral so pledged or deposited may be in an amount that when   1,234        

added to the portion of the deposit insured by the federal         1,235        

deposit insurance corporation or any other agency or               1,236        

instrumentality of the federal government will, in the aggregate,  1,237        

equal or exceed the amount of public moneys so deposited;          1,238        

provided that, when an investment of inactive moneys consists of   1,239        

the purchase of one or more of the type of securities listed in    1,240        

division (A)(1) or (2) of section 135.35 of the Revised Code, no   1,241        

additional collateral need be pledged or deposited.                1,242        

      The investing authority also may require or accept surety    1,244        

company bonds as collateral for public deposits, subject to the    1,245        

provisions of divisions (A) to (E) of this section, and may        1,246        

require that additional eligible securities be pledged or          1,247        

deposited when depreciation occurs in the market value of any      1,248        

securities pledged or deposited.                                   1,249        

      (B)  The public depository may, at any time, provide for     1,251        

the exchange or substitution of securities for other eligible      1,252        

securities or the release of securities when the amount of public  1,253        

moneys on deposit does not require that they be pledged or         1,254        

deposited, by notifying the investing authority of its intent to   1,255        

take such action.                                                  1,256        

      Upon proper notification of the public depository's desire   1,258        

for release of securities, the investing authority may sign a      1,259        

release of such securities provided that the aggregate amount of   1,260        

collateral remaining pledged or deposited meets the requirements   1,261        

of divisions (A) to (E) of this section.                           1,262        

                                                          33     


                                                                 
      When a public depository desires to exchange or substitute   1,264        

securities for other eligible securities, the investing authority  1,265        

may release the securities pledged or deposited after the deposit  1,266        

of other securities having a current market value equal to or      1,267        

greater than the current market value of securities then on        1,268        

deposit or after a safekeeping receipt has been received           1,269        

evidencing the deposit and pledge of such securities.              1,270        

      (C)  Upon request from the investing authority, the trustee  1,272        

or the public depository shall furnish a statement of the          1,273        

securities pledged against the public moneys deposited in the      1,274        

public depository.                                                 1,275        

      (D)  If a public depository fails to pay over any part of    1,277        

any public deposit made as provided by law, the investing          1,278        

authority shall sell any pledged or deposited securities, as       1,279        

prescribed in division (C) of section 135.18 of the Revised Code.  1,280        

      (E)  A public depository may designate, in accordance with   1,282        

the provisions of division (D) of section 135.18 of the Revised    1,283        

Code, a trustee for the safekeeping of any pledged securities.     1,284        

Such trustee shall be any bank or other institution eligible as a  1,285        

trustee under division (I) of section 135.18 of the Revised Code,  1,286        

except that, for the purposes of this section, a bank to which a   1,287        

certificate of qualification is issued shall be an institution     1,288        

mentioned in division (A) of section 135.32 of the Revised Code.   1,289        

      (F)  In lieu of the pledging requirements prescribed in      1,291        

divisions (A) to (E) of this section, an institution designated    1,292        

as a public depository may pledge securities pursuant to section   1,293        

135.181 of the Revised Code.                                       1,294        

      Sec. 321.16.  (A)  When a warrant drawn on him as THE        1,303        

county treasurer by the county auditor is presented for payment,   1,306        

if there is money in the county treasury or depository to the      1,307        

credit of the fund on which it is drawn, and the warrant is                     

endorsed by the payee thereof, the treasurer shall redeem it by    1,308        

payment of cash or by check on the depository.                     1,309        

      (B)  THE WARRANT, AND ALL INFORMATION RELATED TO THE         1,311        

                                                          34     


                                                                 
PRESENTMENT OF THE WARRANT, MAY BE PROVIDED ELECTRONICALLY TO THE  1,312        

COUNTY TREASURER.                                                               

      Sec. 321.17.  When a warrant is presented to the county      1,321        

treasurer for payment, and is not paid, for want of money          1,322        

belonging to the particular fund on which it is drawn, the         1,323        

treasurer shall indorse RECORD the warrant, "Not AS NOT paid for   1,324        

want of funds," with the date of its presentation, and sign his    1,325        

name to the warrant.  Such THE warrant shall thereafter bear       1,327        

interest at the rate of six per cent per annum YEAR.  A            1,329        

memorandum of all such warrants shall be kept by the treasurer in  1,330        

a book for that purpose.                                           1,331        

      Section 2.  That existing sections 135.14, 135.18, 135.181,  1,334        

135.33, 135.35, 135.37, 321.16, and 321.17 of the Revised Code     1,335        

are hereby repealed.