As Reported by House Financial Institutions Committee 1
123rd General Assembly 4
Regular Session Sub. H. B. No. 473 5
1999-2000 6
REPRESENTATIVES MYERS-SCHULER-ALLEN-JOLIVETTE-HARTNETT- 8
CLANCY-OLMAN-METZGER-DISTEL-EVANS-VERICH-MAIER-D. MILLER 9
_________________________________________________________________ 10
A B I L L
To amend sections 9.37, 129.60, 135.12, 135.14, 12
135.18, 135.181, 135.33, 135.341, 135.35, 135.37, 14
307.55, 319.16, 321.15, 321.16, and 321.17 of the
Revised Code to modify the investment authority 16
of counties and political subdivisions relative
to the types of investments made, the collateral 17
requirements applicable to the receipt of public 18
funds, and the investment of public funds in 20
repurchase agreements; to modify the designation 21
period of public depositories by the State Board 22
of Deposit, and by county commissioners, and the 23
designation authority of political subdivisions;
to authorize a political subdivision or a county 24
investment advisory committee to retain the 25
services of an investment advisor meeting certain
requirements; to modify investment recordkeeping 26
requirements of county treasurers and authorize 27
electronic presentment of warrant information to 28
a county treasurer; to permit county auditors to 30
issue, and county treasurers to redeem,
electronic warrants authorizing direct deposit 31
for payment of county obligations in accordance 32
with rules adopted by the Auditor of State; and 33
to make related changes.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO: 35
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Section 1. That sections 9.37, 129.60, 135.12, 135.14, 37
135.18, 135.181, 135.33, 135.341, 135.35, 135.37, 307.55, 319.16, 38
321.15, 321.16, and 321.17 of the Revised Code be amended to read 40
as follows:
Sec. 9.37. (A) As used in this section, "public official" 49
means any elected or appointed officer, employee, or agent of the 50
state, any state institution of higher education, any political 51
subdivision, board, commission, bureau, or other public body 52
established by law. "State institution of higher education" 53
means any state university or college as defined in division 54
(A)(1) of section 3345.12 of the Revised Code, community college, 55
state community college, university branch, or technical college. 56
(B) Any EXCEPT AS PROVIDED IN DIVISION (F) OF THIS 58
SECTION, ANY public official may make by direct deposit of funds 60
by electronic transfer, if the payee provides a written
authorization designating a financial institution and an account 61
number to which the payment is to be credited, any payment such 62
public official is permitted or required by law in the 63
performance of his OFFICIAL duties to make by issuing a check or 64
warrant. 65
(C) Such public official may contract with a financial 67
institution for the services necessary to make direct deposits 68
and draw lump-sum checks or warrants payable to that institution 69
in the amount of the payments to be transferred. 70
(D) Before making any direct deposit as authorized under 72
this section, the public official shall ascertain that the 73
account from which the payment is to be made contains sufficient 74
funds to cover the amount of the payment. 75
(E) If the issuance of checks and warrants by a public 77
official requires authorization by a governing board, commission, 78
bureau, or other public body having jurisdiction over the public 79
official, the public official may only make direct deposits and 80
contracts under this section pursuant to a resolution of 81
authorization duly adopted by such governing board, commission, 82
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bureau, or other public body. 83
(F) PURSUANT TO SECTIONS 307.55, 319.16, AND 321.15 OF THE 85
REVISED CODE, A COUNTY AUDITOR MAY ISSUE, AND A COUNTY TREASURER 86
MAY REDEEM, ELECTRONIC WARRANTS AUTHORIZING DIRECT DEPOSIT FOR 87
PAYMENT OF COUNTY OBLIGATIONS IN ACCORDANCE WITH RULES ADOPTED BY 88
THE AUDITOR OF STATE PURSUANT TO SECTION 117.20 OF THE REVISED 89
CODE.
Sec. 129.60. (A) As used in sections 129.60 to 129.65 and 98
135.12 of the Revised Code, "notes" include notes whether or not 99
issued in anticipation of bonds. 100
The total debt created as evidenced by bonds and notes 102
issued under Section 2h of Article VIII, Ohio Constitution, shall 103
not exceed two hundred ninety million dollars. No part of such 104
debt shall be contracted after December 31, 1970. 105
For the purposes of the certifications required by section 107
129.63 of the Revised Code there need not be included in 108
determining the amounts required to meet the payments of 109
principal of bonds or notes issued pursuant to Section 2h of 110
Article VIII, Ohio Constitution, and this section, the principal 111
of notes which the commissioners of the sinking fund certify will 112
be retired by the issuance of bonds or renewal notes. 113
(B)(1) All bonds or notes shall mature at such time or 115
times, not exceeding thirty years from the date the debt is first 116
contracted, as may be fixed by the commissioners of the sinking 117
fund in their resolution authorizing the issuance of such bonds 118
or notes. 119
(2) The principal of all bonds or notes and the interest 121
thereon shall be exempt from all taxes levied by the state or any 122
taxing subdivision or district thereof. 123
(3) All bonds or notes shall pass as negotiable 125
instruments, subject to any provisions for registration, and 126
shall possess all the attributes thereof. 127
(C) Accrued interest received from the sale of bonds and 129
notes and the proceeds of bonds or notes issued to fund or refund 130
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bonds or notes shall be paid into the development bond retirement 131
fund created by Section 2h of Article VIII, Ohio Constitution. 132
Sec. 135.12. The (A) BEGINNING IN 2000, THE state board 142
of deposit shall meet on the third Monday of March JUNE in the 143
odd-numbered EVEN-NUMBERED years for the purpose of designating 145
the public depositories of the public moneys of the state, and at 146
such meeting or any adjourned session thereof shall designate 147
such public depositories and award the public moneys of the state 148
to and among the public depositories so designated for the period 149
of two years commencing on the first Monday of April JULY next 150
following.
(B) Each other governing board OTHER THAN THE STATE BOARD 153
OF DEPOSIT shall meet every five years on the third Monday or 155
such regularly scheduled meeting date of the month next preceding 156
the date of the expiration of its designation of depositories for 157
the purpose of designating the public depositories of the public 158
moneys of the subdivision, and at such meeting or any adjourned 159
session thereof, shall designate such public depositories and 160
award the public moneys of the subdivision to and among the 161
public depositories so designated for the period of five years 162
commencing on the date of the expiration of the next preceding 163
designation. Such THE designation and award shall be made in 164
duplicate; one copy shall be retained by the governing board of 165
the subdivision and one copy shall be certified to the treasurer. 166
(C) If a governing board other than the state board of 168
deposit determines, during a designation period, that a public 170
depository designated under this section is insolvent or 171
operating in an unsound or unsafe manner, the governing board may 172
meet and designate a different public depository of the public 173
moneys of the subdivision for the remainder of the designation
period.
(D) IF A GOVERNING BOARD OTHER THAN THE STATE BOARD OF 175
DEPOSIT DETERMINES DURING A DESIGNATION PERIOD THAT IT IS 176
NECESSARY AND IN THE SUBDIVISION'S BEST INTERESTS TO APPOINT 177
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ADDITIONAL DEPOSITORIES, THE GOVERNING BOARD MAY MEET AND 178
DESIGNATE ONE OR MORE ADDITIONAL PUBLIC DEPOSITORIES OF THE
PUBLIC MONEYS OF THE SUBDIVISION FOR THE REMAINDER OF THE 179
DESIGNATION PERIOD.
(E) Whenever, by amendment or enactment of any state or 181
federal law or the amendment or adoption of any valid regulation 182
thereunder, the terms of a designation or award, lawful at the 183
beginning of any designation period, cease to be lawful during 185
such period, and if such THE change of law or regulation 186
requires, the designation period shall be limited so as not to 189
extend beyond the date when such THAT change becomes effective. 190
In such case, the proper governing board shall meet and designate 192
the public depositories of the public moneys of the state or of 193
the subdivision for the remainder of the designation period. 194
Sec. 135.14. (A) As used in this section, "treasurer" 203
does not include the treasurer of state, and "governing board" 204
does not include the state board of deposit. 205
(B) The treasurer or governing board may invest or deposit 207
any part or all of the interim moneys. The following 209
classifications of obligations shall be eligible for such 210
investment or deposit:
(1) United States treasury bills, notes, bonds, or any 212
other obligation or security issued by the United States treasury 213
or any other obligation guaranteed as to principal and interest 214
by the United States.
Nothing in the classification of eligible obligations set 216
forth in division (B)(1) of this section or in the 217
classifications of eligible obligations set forth in divisions 218
(B)(2) to (6)(7) of this section shall be construed to authorize 220
any investment in stripped principal or interest obligations of 221
such eligible obligations.
(2) Bonds, notes, debentures, or any other obligations or 223
securities issued by any federal government agency or 224
instrumentality, including but not limited to, the federal 225
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national mortgage association, federal home loan bank, federal 226
farm credit bank, federal home loan mortgage corporation, 227
government national mortgage association, and student loan
marketing association. All federal agency securities shall be 228
direct issuances of federal government agencies or 229
instrumentalities.
(3) Interim deposits in the eligible institutions applying 231
for interim moneys as provided in section 135.08 of the Revised 232
Code. The award of interim deposits shall be made in accordance 233
with section 135.09 of the Revised Code and the treasurer or the 234
governing board shall determine the periods for which such 235
interim deposits are to be made and shall award such interim 236
deposits for such periods, provided that any eligible institution 237
receiving an interim deposit award may, upon notification that 238
the award has been made, decline to accept the interim deposit in 239
which event the award shall be made as though such institution 240
had not applied for such interim deposit. 241
(4) Bonds and other obligations of this state; 243
(5) No-load money market mutual funds consisting 245
exclusively of obligations described in division (B)(1) or (2) of 247
this section and repurchase agreements secured by such
obligations, provided that investments in securities described in 249
this division are made only through eligible institutions
mentioned in section 135.03 of the Revised Code; 250
(6) The Ohio subdivision's fund as provided in section 252
135.45 of the Revised Code; 253
(7) UP TO TWENTY-FIVE PER CENT OF INTERIM MONEYS AVAILABLE 255
FOR INVESTMENT IN EITHER OF THE FOLLOWING: 256
(a) COMMERCIAL PAPER NOTES ISSUED BY AN ENTITY THAT IS 258
DEFINED IN DIVISION (D) OF SECTION 1705.01 OF THE REVISED CODE 259
AND THAT HAS ASSETS EXCEEDING FIVE HUNDRED MILLION DOLLARS, TO 261
WHICH NOTES ALL OF THE FOLLOWING APPLY: 262
(i) THE NOTES ARE RATED AT THE TIME OF PURCHASE IN THE 264
HIGHEST CLASSIFICATION ESTABLISHED BY AT LEAST TWO NATIONALLY 265
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RECOGNIZED STANDARD RATING SERVICES. 266
(ii) THE AGGREGATE VALUE OF THE NOTES DOES NOT EXCEED TEN 268
PER CENT OF THE AGGREGATE VALUE OF THE OUTSTANDING COMMERCIAL 270
PAPER OF THE ISSUING CORPORATION. 271
(iii) THE NOTES MATURE NOT LATER THAN ONE HUNDRED EIGHTY 273
DAYS AFTER PURCHASE. 275
(b) BANKERS ACCEPTANCES OF BANKS THAT ARE INSURED BY THE 277
FEDERAL DEPOSIT INSURANCE CORPORATION AND TO WHICH BOTH OF THE 278
FOLLOWING APPLY: 279
(i) THE OBLIGATIONS ARE ELIGIBLE FOR PURCHASE BY THE 281
FEDERAL RESERVE SYSTEM. 282
(ii) THE OBLIGATIONS MATURE NOT LATER THAN ONE HUNDRED 284
EIGHTY DAYS AFTER PURCHASE. 286
NO INVESTMENT SHALL BE MADE PURSUANT TO DIVISION (B)(7) OF 288
THIS SECTION UNLESS THE TREASURER OR GOVERNING BOARD HAS 289
COMPLETED ADDITIONAL TRAINING FOR MAKING THE INVESTMENTS 290
AUTHORIZED BY DIVISION (B)(7) OF THIS SECTION. THE TYPE AND 291
AMOUNT OF ADDITIONAL TRAINING SHALL BE APPROVED BY THE AUDITOR OF 292
STATE AND MAY BE CONDUCTED BY OR PROVIDED UNDER THE SUPERVISION 294
OF THE AUDITOR OF STATE.
(C) Nothing in the classifications of eligible obligations 296
set forth in divisions (B)(1) to (6)(7) of this section shall be 297
construed to authorize any investment in a derivative, and no 299
treasurer or governing board shall invest in a derivative. For 300
purposes of this division, "derivative" means a financial 301
instrument or contract or obligation whose value or return is 302
based upon or linked to another asset or index, or both, separate 303
from the financial instrument, contract, or obligation itself.
Any security, obligation, trust account, or other instrument that 304
is created from an issue of the United States treasury or is 305
created from an obligation of a federal agency or instrumentality 306
or is created from both is considered a derivative instrument. 307
An eligible investment described in this section with a variable 308
interest rate payment, based upon a single interest payment or 309
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single index comprised of other eligible investments provided for 310
in division (B)(1) or (2) of this section, is not a derivative, 311
provided that such variable rate investment has a maximum
maturity of two years. 312
(D) Any EXCEPT AS PROVIDED IN DIVISION (E) OF THIS 314
SECTION, ANY investment made pursuant to this section must mature 315
within five years from the date of settlement, unless the 316
investment is matched to a specific obligation or debt of the 317
subdivision. 318
(E) The treasurer or governing board may also enter into a 320
written repurchase agreement with any eligible institution 321
mentioned in section 135.03 of the Revised Code or any eligible 322
dealer pursuant to division (M) of this section, under the terms 323
of which agreement the treasurer or governing board purchases, 324
and such institution or dealer agrees unconditionally to 325
repurchase any of the securities listed in division DIVISIONS 326
(B)(1) or (2) TO (5), EXCEPT LETTERS OF CREDIT DESCRIBED IN 327
DIVISION (B)(2), of this section 135.18 OF THE REVISED CODE. The 330
market value of securities subject to an overnight WRITTEN
repurchase agreement must exceed the principal value of the 331
overnight WRITTEN repurchase agreement by at least two per cent. 332
A term WRITTEN repurchase agreement shall not exceed thirty days 334
and the market value of securities subject to a term WRITTEN 335
repurchase agreement must exceed the principal value of the term 336
WRITTEN repurchase agreement by at least two per cent and be 337
marked to market daily. All securities purchased pursuant to 339
this division shall be delivered into the custody of the
treasurer or governing board or an agent designated by the 340
treasurer or governing board. A WRITTEN repurchase agreement 341
with an eligible securities dealer shall be transacted on a 343
delivery versus payment basis. The agreement shall contain the 344
requirement that for each transaction pursuant to the agreement 345
the participating institution or dealer shall provide all of the 346
following information:
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(1) The par value of the securities; 348
(2) The type, rate, and maturity date of the securities; 350
(3) A numerical identifier generally accepted in the 352
securities industry that designates the securities. 353
No treasurer or governing board shall enter into a written 355
repurchase agreement under the terms of which the treasurer or 356
governing board agrees to sell securities owned by the 357
subdivision to a purchaser and agrees with that purchaser to 358
unconditionally repurchase those securities.
(F) No treasurer or governing board shall make an 360
investment under this section, unless the treasurer or governing 361
board, at the time of making the investment, reasonably expects 362
that the investment can be held until its maturity. 363
(G) No treasurer or governing board shall pay interim 365
moneys into a fund established by another subdivision, treasurer, 366
governing board, or investing authority, if that fund was 367
established for the purpose of investing the public moneys of 368
other subdivisions. This division does not apply to the payment 369
of public moneys into either of the following:
(1) The Ohio subdivision's fund pursuant to division 372
(B)(6) of this section;
(2) A fund created solely for the purpose of acquiring, 374
constructing, owning, leasing, or operating municipal utilities 375
pursuant to the authority provided under section 715.02 of the 376
Revised Code or Section 4 of Article XVIII, Ohio Constitution. 377
For purposes of division (G) of this section, "subdivision" 379
includes a county. 380
(H) The use of leverage, in which the treasurer or 382
governing board uses its current investment assets as collateral 383
for the purpose of purchasing other assets, is prohibited. The 384
issuance of taxable notes for the purpose of arbitrage is 385
prohibited. Contracting to sell securities that have not yet 386
been acquired by the treasurer or governing board, for the
purpose of purchasing such securities on the speculation that 387
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bond prices will decline, is prohibited. 388
(I) Whenever, during a period of designation, the 390
treasurer classifies public moneys as interim moneys, the 391
treasurer shall notify the governing board of such action. Such 392
THE notification shall be given within thirty days after such 393
classification and in the event the governing board does not 394
concur in such classification or in the investments or deposits 395
made under this section, the governing board may order the 396
treasurer to sell or liquidate any of such investments or 397
deposits, and any such order shall specifically describe the 398
investments or deposits and fix the date upon which they are to 399
be sold or liquidated. Investments or deposits so ordered to be 400
sold or liquidated shall be sold or liquidated for cash by the 401
treasurer on the date fixed in such order at the then current 402
market price. Neither the treasurer nor the members of the board 403
shall be held accountable for any loss occasioned by sales or 404
liquidations of investments or deposits at prices lower than 405
their cost. Any loss or expense incurred in making such sales or 406
liquidations is payable as other expenses of the treasurer's 407
office.
(J) If any investments or deposits purchased under the 409
authority of this section are issuable to a designated payee or 410
to the order of a designated payee, the name of the treasurer and 411
the title of the treasurer's office shall be so designated. If 412
any such securities are registrable either as to principal or 413
interest, or both, then such securities shall be registered in 414
the name of the treasurer as such. 415
(K) The treasurer is responsible for the safekeeping of 417
all documents evidencing a deposit or investment acquired by the 418
treasurer under this section. Any securities may be deposited 419
for safekeeping with a qualified trustee as provided in section 420
135.18 of the Revised Code, except the delivery of securities 421
acquired under any repurchase agreement under this section shall 422
be made to a qualified trustee, provided, however, that the 423
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qualified trustee shall be required to report to the treasurer, 424
governing board, auditor of state, or an authorized outside 425
auditor at any time upon request as to the identity, market 426
value, and location of the document evidencing each security, and 427
that if the participating institution is a designated depository 428
of the subdivision for the current period of designation, the 429
securities that are the subject of the repurchase agreement may 430
be delivered to the treasurer or held in trust by the 431
participating institution on behalf of the subdivision. Interest 432
earned on any investments or deposits authorized by this section 433
shall be collected by the treasurer and credited by the treasurer 435
to the proper fund of the subdivision.
Upon the expiration of the term of office of a treasurer or 437
in the event of a vacancy in the office of treasurer by reason of 438
death, resignation, removal from office, or otherwise, the 439
treasurer or the treasurer's legal representative shall transfer 440
and deliver to the treasurer's successor all documents evidencing 441
a deposit or investment held by the treasurer. For the 442
investments and deposits so transferred and delivered, such 443
treasurer shall be credited with and the treasurer's successor 444
shall be charged with the amount of money held in such
investments and deposits. 445
(L) Whenever investments or deposits acquired under this 447
section mature and become due and payable, the treasurer shall 448
present them for payment according to their tenor, and shall 449
collect the moneys payable thereon. The moneys so collected 450
shall be treated as public moneys subject to sections 135.01 to 451
135.21 of the Revised Code. 452
(M)(1) All investments, except for investments in 454
securities described in divisions (B)(5) and (6) of this section 455
and for investments by a municipal corporation in the issues of 456
such municipal corporation, shall be made only through a member 457
of the national association of securities dealers, through a 458
bank, savings bank, or savings and loan association regulated by 459
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the superintendent of financial institutions, or through an 460
institution regulated by the comptroller of the currency, federal 461
deposit insurance corporation, or board of governors of the 462
federal reserve system.
(2) Payment for investments shall be made only upon the 464
delivery of securities representing such investments to the 465
treasurer, governing board, or qualified trustee. If the 466
securities transferred are not represented by a certificate, 467
payment shall be made only upon receipt of confirmation of 468
transfer from the custodian by the treasurer, governing board, or 469
qualified trustee. 470
(N)(1) IN MAKING INVESTMENTS AUTHORIZED BY THIS SECTION, A 472
TREASURER OR GOVERNING BOARD MAY RETAIN THE SERVICES OF AN 474
INVESTMENT ADVISOR, PROVIDED THE ADVISOR IS LICENSED BY THE 476
DIVISION OF SECURITIES UNDER SECTION 1707.141 OF THE REVISED CODE 477
OR IS REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION, AND 479
POSSESSES EXPERIENCE IN PUBLIC FUNDS INVESTMENT MANAGEMENT, 480
SPECIFICALLY IN THE AREA OF STATE AND LOCAL GOVERNMENT INVESTMENT 481
PORTFOLIOS, OR THE ADVISOR IS AN ELIGIBLE INSTITUTION MENTIONED 482
IN SECTION 135.03 OF THE REVISED CODE. 483
(O)(1) Except as otherwise provided in divisions (N)(O)(2) 486
and (3) of this section, no treasurer or governing board shall 487
make an investment or deposit under this section, unless there is 489
on file with the auditor of state a written investment policy 490
approved by the treasurer or governing board. The policy shall 491
require that all entities conducting investment business with the 492
treasurer or governing board shall sign the investment policy of 493
that subdivision. All brokers, dealers, and financial 494
institutions, described in division (M)(1) of this section, 495
initiating transactions with the treasurer or governing board by 496
giving advice or making investment recommendations shall sign the 497
treasurer's or governing board's investment policy thereby
acknowledging their agreement to abide by the policy's contents. 498
All brokers, dealers, and financial institutions, described in 499
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division (M)(1) of this section, executing transactions initiated 500
by the treasurer or governing board, having read the policy's 501
contents, shall sign the investment policy thereby acknowledging 502
their comprehension and receipt.
(2) If a written investment policy described in division 504
(N)(O)(1) of this section is not filed on behalf of the 506
subdivision with the auditor of state, the treasurer or governing 507
board of that subdivision shall invest the subdivision's interim 508
moneys only in interim deposits pursuant to division (B)(3) of 509
this section or the Ohio subdivision's fund pursuant to division 510
(B)(6) of this section.
(3) Divisions (N)(O)(1) and (2) of this section do not 512
apply to a treasurer or governing board of a subdivision whose 514
average annual portfolio of investments held pursuant to this 515
section is one hundred thousand dollars or less, provided that 516
the treasurer or governing board certifies, on a form prescribed 517
by the auditor of state, that the treasurer or governing board 518
will comply and is in compliance with the provisions of sections 519
135.01 to 135.21 of the Revised Code. 520
(O)(P) A treasurer or governing board may enter into a 523
written investment or deposit agreement that includes a provision 524
under which the parties agree to submit to nonbinding arbitration 525
to settle any controversy that may arise out of the agreement, 526
including any controversy pertaining to losses of public moneys 527
resulting from investment or deposit. The arbitration provision 528
shall be set forth entirely in the agreement, and the agreement 529
shall include a conspicuous notice to the parties that any party 531
to the arbitration may apply to the court of common pleas of the 532
county in which the arbitration was held for an order to vacate,
modify, or correct the award. Any such party may also apply to 533
the court for an order to change venue to a court of common pleas 534
located more than one hundred miles from the county in which the 535
treasurer or governing board is located. 536
For purposes of this division, "investment or deposit 538
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agreement" means any agreement between a treasurer or governing 539
board and a person, under which agreement the person agrees to 540
invest, deposit, or otherwise manage a subdivision's interim 541
moneys on behalf of the treasurer or governing board, or agrees 542
to provide investment advice to the treasurer or governing board.
(P)(Q) An investment made by the treasurer or governing 544
board pursuant to this section prior to the effective date of 545
this amendment SEPTEMBER 27, 1996, that was a legal investment 547
under the law as it existed before the effective date of this 549
amendment SEPTEMBER 27, 1996, may be held until maturity, or if 550
the investment does not have a maturity date, it may be held 551
until five years from the effective date of this amendment 553
SEPTEMBER 27, 1996, regardless of whether the investment would 554
qualify as a legal investment under the terms of this section as 555
amended.
Sec. 135.18. (A) The treasurer, before making the initial 564
deposit in a public depository pursuant to an award made under 565
sections 135.01 to 135.21 of the Revised Code, shall require the 566
institution designated as a public depository to pledge to and 567
deposit with the treasurer, as security for the repayment of all 568
public moneys to be deposited in the public depository during the 569
period of designation pursuant to the award, eligible securities 570
of aggregate market value equal to the excess of the amount of 571
public moneys to be at the time so deposited, over and above such 572
portion or amount of such moneys as is at such time insured by 573
the federal deposit insurance corporation or by any other agency 574
or instrumentality of the federal government, or the treasurer 575
may require the institution to deposit with the treasurer surety 576
company bonds which, when executed, shall be for an amount equal 577
to such excess amount. In the case of any deposit other than the 578
initial deposit made during the period of designation, the amount 579
of the aggregate market value of securities required to be 580
pledged and deposited, or of the surety company bonds required to 581
be deposited, shall be equal to the difference between the amount 582
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of public moneys on deposit in such public depository plus the 583
amount to be so deposited, minus the portion or amount of the 584
aggregate as is at the time insured as provided in this section. 585
The treasurer may require additional eligible securities to be 586
deposited to provide for any depreciation which may occur in the 587
market value of any of the securities so deposited. 588
(B) The following securities shall be eligible for the 590
purposes of this section: 591
(1) Bonds, notes, or other obligations of the United 593
States; or bonds, notes, or other obligations guaranteed as to 594
principal and interest by the United States or those for which 595
the faith of the United States is pledged for the payment of 596
principal and interest thereon, by language appearing in the 597
instrument specifically providing such guarantee or pledge and 598
not merely by interpretation or otherwise; 599
(2) Bonds, notes, debentures, letters of credit, or other 601
obligations or securities issued by any federal government agency 602
or instrumentality, or the export-import bank of Washington; 603
bonds, notes, or other obligations guaranteed as to principal and 604
interest by the United States or those for which the faith of the 605
United States is pledged for the payment of principal and 606
interest thereon, by interpretation or otherwise and not by 607
language appearing in the instrument specifically providing such 608
guarantee or pledge;
(3) Obligations of or fully insured or fully guaranteed by 610
the United States or any federal government agency or 611
instrumentality;
(4) Obligations partially insured or partially guaranteed 613
by any federal agency or instrumentality; 614
(5) Obligations of or fully guaranteed by the federal 616
national mortgage association, federal home loan mortgage 617
corporation, federal farm credit bank, or student loan marketing 618
association;
(6) Bonds and other obligations of this state; 620
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(7) Bonds and other obligations of any county, township, 622
school district, municipal corporation, or other legally 623
constituted taxing subdivision of this state, which is not at the 624
time of such deposit, in default in the payment of principal or 625
interest on any of its bonds or other obligations, for which the 626
full faith and credit of the issuing subdivision is pledged; 628
(8) Bonds of other states of the United States which have 630
not during the ten years immediately preceding the time of such 631
deposit defaulted in payments of either interest or principal on 632
any of their bonds; 633
(9) Shares of no-load money market mutual funds consisting 636
exclusively of obligations described in division (B)(1) or (2) of
this section and repurchase agreements secured by such 637
obligations; 638
(10) A SURETY BOND ISSUED BY A CORPORATE SURETY LICENSED BY 640
THE STATE AND AUTHORIZED TO ISSUE SURETY BONDS IN THIS STATE 641
PURSUANT TO CHAPTER 3929. OF THE REVISED CODE, AND QUALIFIED TO 642
PROVIDE SURETY BONDS TO THE FEDERAL GOVERNMENT PURSUANT TO 96 644
STAT. 1047 (1982), 31 U.S.C.A. 9304. 645
(C) If the public depository fails to pay over any part of 647
the public deposit made therein as provided by law, the treasurer 648
shall sell at public sale any of the bonds or other securities 649
deposited with the treasurer pursuant to this section or section 650
131.09 of the Revised Code, or shall draw on any letter of credit 651
to the extent of such failure to pay. Thirty days' notice of 652
such sale shall be given in a newspaper of general circulation at 653
Columbus, in the case of the treasurer of state, and at the 654
county seat of the county in which the office of the treasurer is 655
located, in the case of any other treasurer. When a sale of 656
bonds or other securities has been so made and upon payment to 657
the treasurer of the purchase money, the treasurer shall transfer 658
such bonds or securities whereupon the absolute ownership of such 659
bonds or securities shall pass to the purchasers. Any surplus 660
remaining after deducting the amount due the state or subdivision 661
17
and expenses of sale shall be paid to the public depository. 662
(D) An institution designated as a public depository may, 664
by written notice to the treasurer, designate a qualified trustee 665
and deposit the eligible securities required by this section with 666
the trustee for safekeeping for the account of the treasurer and 667
the institution as a public depository, as their respective 668
rights to and interests in such securities under this section may 669
appear and be asserted by written notice to or demand upon the 670
trustee. In such case, the treasurer shall accept the written 671
receipt of the trustee describing the securities which have been 672
deposited with the trustee by the public depository, a copy of 673
which shall also be delivered to the public depository. 674
Thereupon all such securities so deposited with the trustee are 675
deemed to be pledged with the treasurer and to be deposited with 676
the treasurer, for all the purposes of this section. 677
(E) The governing board may make provisions for the 679
exchange and release of securities and the substitution of other 680
eligible securities therefor except where the public depository 681
has deposited eligible securities with a trustee for safekeeping 682
as provided in this section. 683
(F) When the public depository has deposited eligible 685
securities described in division (B)(1) of this section with a 686
trustee for safekeeping, the public depository may at any time 687
substitute or exchange eligible securities described in division 688
(B)(1) of this section having a current market value equal to or 689
greater than the current market value of the securities then on 690
deposit and for which they are to be substituted or exchanged, 691
without specific authorization from any governing board, boards, 692
or treasurer of any such substitution or exchange. 693
(G) When the public depository has deposited eligible 695
securities described in divisions (B)(2) to (9) of this section 697
with a trustee for safekeeping, the public depository may at any
time substitute or exchange eligible securities having a current 698
market value equal to or greater than the current market value of 699
18
the securities then on deposit and for which they are to be 700
substituted or exchanged without specific authorization of any 701
governing board, boards, or treasurer of any such substitution or 702
exchange only if: 703
(1) The treasurer has authorized the public depository to 705
make such substitution or exchange on a continuing basis during a 706
specified period without prior approval of each substitution or 707
exchange. Such authorization may be effected by the treasurer 708
sending to the trustee a written notice stating that substitution 709
may be effected on a continuing basis during a specified period 710
which shall not extend beyond the end of the period of 711
designation during which the notice is given. The trustee may 712
rely upon such notice and upon the period of authorization stated 713
therein and upon the period of designation stated therein. 714
(2) No continuing authorization for substitution has been 716
given by the treasurer, the public depository notifies the 717
treasurer and the trustee of an intended substitution or 718
exchange, and the treasurer fails to object to the trustee as to 719
the eligibility or market value of the securities being 720
substituted within ten calendar days after the date appearing on 721
the notice of proposed substitution. The notice to the treasurer 722
and to the trustee shall be given in writing and delivered 723
personally or by certified or registered mail with a return 724
receipt requested. The trustee may assume in any case that the 725
notice has been delivered to the treasurer. In order for 726
objections of the treasurer to be effective, receipt of the 727
objections must be acknowledged in writing by the trustee. 728
(3) The treasurer gives written authorization for a 730
substitution or exchange of specific securities. 731
(H) The public depository shall notify any governing 733
board, boards, or treasurer of any such substitution or exchange 734
under division (G)(1) or (2) of this section. Upon request from 735
the treasurer, the trustee shall furnish a statement of the 736
securities pledged against such public deposits. 737
19
(I) Any federal reserve bank or branch thereof located in 739
this state, without compliance with Chapter 1111. of the Revised 740
Code and without becoming subject to any other law of this state 743
relative to the exercise by corporations of trust powers 744
generally, is qualified to act as trustee for the safekeeping of 745
securities, under this section. Any institution mentioned in 746
section 135.03 of the Revised Code that holds a certificate of 747
qualification issued by the superintendent of financial 748
institutions or any institution complying with sections 1111.04,
1111.05, and 1111.06 of the Revised Code, is qualified to act as 750
trustee for the safekeeping of securities, other than those 751
belonging to itself, under this section. Upon application to the 752
superintendent in writing by any such institution, the
superintendent shall investigate the applicant and ascertain 754
whether or not it has been authorized to execute and accept 755
trusts in this state and has safe and adequate vaults and 756
efficient supervision thereof for the storage and safekeeping 757
within this state of such securities. If the superintendent 758
finds that the applicant has been so authorized and does have 759
such vaults and supervision thereof, the superintendent shall 760
approve the application and issue a certificate to that effect, 761
the original or any certified copy of which shall be conclusive 762
evidence that the institution therein named is qualified to act 763
as trustee for the purposes of this section with respect to 764
securities other than those belonging to itself.
Notwithstanding the fact that a public depository is 766
required to pledge eligible securities in certain amounts to 767
secure deposits of public moneys, a trustee shall have no duty or 768
obligation to determine the eligibility, market value, or face 769
value of any securities deposited with the trustee by a public 770
depository. This applies in all situations including, without 771
limitation, a substitution or exchange of securities. 772
Any charges or compensation of a designated trustee for 774
acting as such under this section shall be paid by the public 775
20
depository and in no event shall be chargeable to the state or 776
the subdivision or to the treasurer or to any officer of the 777
state or subdivision. Such THE charges or compensation shall not 779
be a lien or charge upon the securities deposited for safekeeping 780
prior or superior to the rights to and interests in such 781
securities of the state or the subdivision or of the treasurer. 782
The treasurer and the treasurer's bonders or surety shall be 784
relieved from any liability to the state or the subdivision or to
the public depository for the loss or destruction of any 785
securities deposited with a qualified trustee pursuant to this 786
section.
Sec. 135.181. (A) As used in this section: 795
(1) "Public depository" means that term as defined in 797
section 135.01 of the Revised Code, but also means an institution 798
which receives or holds any public deposits as defined in section 799
135.31 of the Revised Code. 800
(2) "Public deposits," "public moneys," and "treasurer" 802
mean those terms as defined in section 135.01 of the Revised 803
Code, but also have the same meanings as are set forth in section 804
135.31 of the Revised Code. 805
(3) "Subdivision" means that term as defined in section 807
135.01 of the Revised Code, but also includes a county. 808
(B) In lieu of the pledging requirements prescribed in 810
sections 135.18 and 135.37 of the Revised Code, an institution 811
designated as a public depository at its option may pledge a 812
single pool of eligible securities to secure the repayment of all 813
public moneys deposited in the institution and not otherwise 814
secured pursuant to law, provided that at all times the total 815
MARKET value of the securities so pledged, based on the 816
valuations prescribed in division (C) of this section, is at 817
least equal to one hundred ten FIVE per cent of the total amount 818
of all public deposits to be secured by the pooled securities, 819
including the portion of such deposits covered by any federal 820
deposit insurance. Each such institution shall carry in its 821
21
accounting records at all times a general ledger or other 822
appropriate account of the total amount of all public deposits to 823
be secured by the pool, as determined at the opening of business 824
each day, and the total MARKET value of securities pledged to 825
secure such deposits. 826
(C) The following securities, at the specified valuations, 828
DESCRIBED IN DIVISION (B) OF SECTION 135.18 OF THE REVISED CODE 829
shall be eligible as collateral for the purposes of division (B) 830
of this section, provided no such securities pledged as 831
collateral are at any time in default as to either principal or 832
interest: 833
(1) Obligations of or fully insured or fully guaranteed by 835
the United States or any federal government agency or 836
instrumentality: at face value; 837
(2) Obligations partially insured or partially guaranteed 839
by any federal government agency or instrumentality: at face 840
value;
(3) Obligations of or fully guaranteed by the federal 842
national mortgage association, federal home loan mortgage 843
corporation, federal farm, credit bank, or student loan marketing 844
association: at face value; 845
(4) Obligations of any state, county, municipal 847
corporation, or other legally constituted authority of any state, 848
or any instrumentality of any state, county, municipal 849
corporation, or other authority, which are secured as to the 850
payment of principal and interest by the holding in escrow of 851
obligations of the United States for which the full faith and 852
credit of the United States is pledged: at face value; 853
(5) Obligations of this state, or any county or other 855
legally constituted authority of this state, or any 856
instrumentality of this state, or such county or other authority: 857
at face value; 858
(6) Obligations of any other state: at ninety per cent of 860
face value; 861
22
(7) Obligations of any county, municipal corporation, or 863
other legally constituted authority of any other state, or any 864
instrumentality of such county, municipal corporation, or other 865
authority: at eighty per cent of face value; 866
(8) Notes representing loans made to persons attending or 868
planning to attend eligible institutions of education and to 869
their parents, and insured or guaranteed by the United States or 870
any agency, department, or other instrumentality thereof: at 871
face value;
(9) Any other obligations the treasurer of state approves: 873
at the percentage of face value the treasurer of state 874
prescribes;
(10) Shares of no-load money market mutual funds 876
consisting exclusively of obligations described in division 877
(C)(1), (2), or (3) of this section and repurchase agreements 878
secured by such obligations: at face value. 879
(D) The state and each subdivision shall have an undivided 881
security interest in the pool of securities pledged by a public 882
depository pursuant to division (B) of this section in the 883
proportion that the total amount of the state's or subdivision's 884
public moneys secured by the pool bears to the total amount of 885
public deposits so secured. 886
(E) An institution designated as a public depository shall 888
designate a qualified trustee and deposit with the trustee for 889
safekeeping the eligible securities pledged pursuant to division 890
(B) of this section. The institution shall give written notice 891
of the qualified trustee to any treasurer or treasurers 892
depositing public moneys for which such securities are pledged. 893
The treasurer shall accept the written receipt of the trustee 894
describing the pool of securities so deposited by the depository, 895
a copy of which also shall be delivered to the depository. 896
(F) Any federal reserve bank or branch thereof located in 898
this state, without compliance with Chapter 1111. of the Revised 899
Code and without becoming subject to any other law of this state 902
23
relative to the exercise by corporations of trust powers 903
generally, is qualified to act as trustee for the safekeeping of 904
securities, under this section. Any institution mentioned in 905
section 135.03 or 135.32 of the Revised Code which holds a
certificate of qualification issued by the superintendent of 906
financial institutions or any institution complying with sections 908
1111.04, 1111.05, and 1111.06 of the Revised Code is qualified to 909
act as trustee for the safekeeping of securities under this 910
section, other than those belonging to itself or to an affiliate 911
as defined in division (A) of section 1101.01 of the Revised 912
Code. Upon application to the superintendent in writing by any 913
such institution, the superintendent shall investigate the 915
applicant and ascertain whether or not it has been authorized to 916
execute and accept trusts in this state and has safe and adequate 917
vaults and efficient supervision thereof for the storage and 918
safekeeping of such securities. If the superintendent finds that 919
the applicant has been so authorized and does have such vaults 920
and supervision thereof, the superintendent shall approve the 921
application and issue a certificate to that effect, the original 923
or any certified copy of which shall be conclusive evidence that 924
the institution named therein is qualified to act as trustee for 925
the purposes of this section with respect to securities other 926
than those belonging to itself or to an affiliate. 927
(G) The public depository at any time may substitute, 929
exchange, or release eligible securities deposited with a 930
qualified trustee pursuant to this section, provided that such 931
substitution, exchange, or release does not reduce the total 932
MARKET value of the securities, based on the valuations 933
prescribed in division (C) of this section, to an amount that is 935
less than one hundred ten FIVE per cent of the total amount of 936
public deposits as determined pursuant to division (B) of this 938
section.
(H) Notwithstanding the fact that a public depository is 940
required to pledge eligible securities in certain amounts to 941
24
secure deposits of public moneys, a trustee shall have no duty or 942
obligation to determine the eligibility, market value, or face 943
value of any securities deposited with the trustee by a public 944
depository. This applies in all situations including, but not 945
limited to, a substitution or exchange of securities, but 946
excluding those situations effectuated by division (I) of this 947
section in which the trustee is required to determine face and 948
market value. 949
(I) If the public depository fails to pay over any part of 951
the public deposits made therein as provided by law and secured 952
pursuant to division (B) of this section, the treasurer shall 953
give written notice of this failure to the qualified trustee 954
holding the pool of securities pledged against public moneys 955
deposited in the depository, and at the same time shall send a 956
copy of this notice to the depository. Upon receipt of such 957
notice, the trustee shall transfer to the treasurer for public 958
sale such of the pooled securities as may be necessary to produce 959
an amount equal to the deposits made by the treasurer and not 960
paid over, less the portion of such deposits covered by any 961
federal deposit insurance, plus any accrued interest due on such 962
deposits; however, such THE amount shall not exceed the state's 963
or subdivision's proportional security interest in the market 965
value of the pool as of the date of the depository's failure to 966
pay over the deposits, as such interest and value are determined 967
by the trustee. The treasurer shall sell at public sale any of 968
the bonds or other securities so transferred. Thirty days' 969
notice of such sale shall be given in a newspaper of general 970
circulation at Columbus, in the case of the treasurer of state, 971
and at the county seat of the county in which the office of the 972
treasurer is located, in the case of any other treasurer. When a 973
sale of bonds or other securities has been so made and upon 974
payment to the treasurer of the purchase money, the treasurer 975
shall transfer such bonds or securities whereupon the absolute 976
ownership of such bonds or securities shall pass to the 977
25
purchasers. Any surplus after deducting the amount due the state 978
or subdivision and expenses of sale shall be paid to the public 979
depository.
(J) Any charges or compensation of a designated trustee 981
for acting as such under this section shall be paid by the public 982
depository and in no event shall be chargeable to the state or 983
subdivision or to the treasurer or to any officer of the state or 984
subdivision. Such THE charges or compensation shall not be a 985
lien or charge upon the securities deposited for safekeeping 987
prior or superior to the rights to and interests in such 988
securities of the state or subdivision or of the treasurer. The 989
treasurer and the treasurer's bonders or surety shall be relieved 990
from any liability to the state or subdivision or to the public 991
depository for the loss or destruction of any securities 992
deposited with a qualified trustee pursuant to this section. 993
(K) In lieu of placing its unqualified endorsement on each 995
security, a public depository pledging securities pursuant to 996
division (B) of this section that are not negotiable without its 997
endorsement or assignment may furnish to the qualified trustee 998
holding the securities an appropriate resolution and irrevocable 999
power of attorney authorizing the trustee to assign the 1,000
securities. The resolution and power of attorney shall conform 1,001
to such terms and conditions as the trustee prescribes. 1,002
(L) Upon request of a treasurer no more often than four 1,004
times per year, a public depository shall report the amount of 1,005
public moneys deposited by the treasurer and secured pursuant to 1,006
division (B) of this section, and the total MARKET value, based 1,007
on the valuations prescribed in division (C) of this section, of 1,009
the pool of securities pledged to secure public moneys held by 1,010
the depository, including those deposited by the treasurer. Upon 1,011
request of a treasurer no more often than four times per year, a 1,012
qualified trustee shall report such THE total MARKET value of the 1,014
pool of securities deposited with it by the depository and shall 1,016
provide an itemized list of the securities in the pool. These 1,017
26
reports shall be made as of the date the treasurer specifies. 1,018
Sec. 135.33. (A) The board of county commissioners shall 1,027
meet every two FOUR years in the month next preceding the date of 1,029
the expiration of its current period of designation for the 1,030
purpose of designating its public depositories of active moneys 1,031
for the next succeeding two-year FOUR-YEAR period commencing on 1,032
the date of expiration of the preceding period. 1,034
At least sixty days before such THE meeting, the county 1,036
treasurer shall submit to the board an estimate of the aggregate 1,037
amount of public moneys that might be available for deposit as 1,038
active moneys at any one time during the next two-year FOUR-YEAR 1,039
period. Upon receipt of such estimate, the board shall 1,040
immediately notify all eligible institutions that might desire to 1,041
be designated as such public depositories of the date on which 1,042
the designation is to be made; the amount that has been estimated 1,043
to be available for deposit; and the date fixed as the last date 1,044
on which applications may be submitted, that shall not be more 1,045
than thirty days or less than ten days prior to the date set for 1,046
the meeting designating public depositories. 1,047
(B) Any eligible institution described in division (A) of 1,049
section 135.32 of the Revised Code that has an office located 1,050
within the territorial limits of the county is eligible to become 1,051
a public depository of the active moneys of the county. Each 1,052
eligible institution desiring to be a public depository of such 1,053
active moneys shall, not more than thirty days or less than ten 1,054
days prior to the date fixed by this section, make application 1,055
therefor in writing to the board of county commissioners. Such 1,056
THE application may specify the maximum amount of such public 1,057
moneys that the applicant desires to receive and have on deposit 1,058
at any time during the period covered by the designation. Each 1,059
application shall be accompanied by a financial statement of the 1,060
applicant, under oath of its cashier, treasurer, or other officer 1,061
as of the date of its latest report to the superintendent of 1,062
banks or comptroller of the currency, and adjusted to show any 1,063
27
changes therein prior to the date of the application, that shall 1,064
include a statement of its public and nonpublic deposits. 1,065
(C) The board of county commissioners, upon recommendation 1,067
of the treasurer, shall designate, by resolution, one or more 1,068
eligible institutions as public depositories for active moneys. 1,069
In case the aggregate amount of active moneys applied for by 1,070
institutions within the county is less than the amount estimated 1,071
to be available for deposit, the board may designate as a public 1,072
depository one or more eligible institutions that are 1,073
conveniently located. The original resolution of designation 1,074
shall be certified to the treasurer and any institution 1,075
designated as a public depository. 1,076
(D) No service charge shall be made against any deposit of 1,078
active moneys, or collected or paid, unless such service charge 1,079
is the same as is customarily imposed by institutions receiving 1,080
money on deposit subject to check, in which event the charge may 1,081
be paid. 1,082
(E) Notwithstanding division (C) of this section, the 1,084
board of county commissioners may authorize, by resolution, the 1,085
treasurer to deposit money necessary to pay the principal and 1,086
interest on bonds and notes, and any fees incident thereto, in 1,087
any bank within this state. 1,088
Moneys so deposited shall be transferred by the treasurer 1,090
according to the terms of the agreement with the bank but shall 1,091
remain as public moneys until such time as they are actually paid 1,092
out by the bank. Until such time as payments become due and 1,093
payable on such principal or interest, the bank shall invest any 1,094
moneys in the account in interest-bearing obligations at the 1,095
highest, reasonable rate of interest obtainable. 1,096
So long as moneys remain in the account, the bank shall 1,098
deliver to the treasurer, at the end of each month, a statement 1,099
showing an accounting of all activities in the account during the 1,100
preceding month including, but not limited to, all payments made, 1,101
all interest earned, and the beginning and ending balances, 1,102
28
together with any coupons redeemed since the preceding statement 1,103
was issued. 1,104
Sec. 135.341. (A) There shall be a county investment 1,113
advisory committee consisting of three members: two county 1,114
commissioners to be designated by the board of county 1,116
commissioners, and the county treasurer. 1,117
Notwithstanding the preceding sentence, the board of county 1,119
commissioners may declare that all three county commissioners 1,120
shall serve on the county investment advisory committee. If the 1,121
board so declares, the county investment advisory committee shall 1,122
consist of five members: the three county commissioners, the 1,123
county treasurer, and the clerk of the court of common pleas of 1,124
the county.
(B) The committee shall elect its own chairperson, and 1,126
committee members shall receive no additional compensation for 1,127
the performance of their duties as committee members. 1,128
(C) The committee shall establish written county 1,131
investment policies and shall meet at least once every three 1,132
months, to review or revise its policies and to advise the 1,133
investing authority on the county investments in order to ensure 1,134
the best and safest return of funds available to the county for 1,135
deposit or investment. Any member of the county investment 1,136
advisory committee, upon giving five days' notice, may call a 1,137
meeting of the committee. The committee's policies may establish 1,138
a limit on the period of time that moneys may be invested in any 1,139
particular type of investment.
(D) The committee is authorized to retain the services of 1,141
an investment advisor, provided that the advisor is LICENSED BY 1,142
THE DIVISION OF SECURITIES UNDER SECTION 1707.141 OF THE REVISED 1,143
CODE OR IS registered with the securities and exchange 1,144
commission, and possesses public funds investment management 1,146
experience, specifically in the area of state and local
government investment portfolios, or the advisor is an eligible 1,147
institution mentioned in section 135.03 of the Revised Code. 1,148
29
(E) Nothing in this section affects the authority of any 1,150
of the officers mentioned in section 325.27 of the Revised Code 1,151
to contract for the services of fiscal and management consultants 1,152
pursuant to section 325.17 of the Revised Code. 1,153
Sec. 135.35. (A) The investing authority shall deposit or 1,162
invest any part or all of the county's inactive moneys and shall 1,163
invest all of the money in the county library and local 1,164
government support fund when required by section 135.352 of the 1,165
Revised Code. The following classifications of securities and 1,166
obligations are eligible for such deposit or investment: 1,167
(1) United States treasury bills, notes, bonds, or any 1,169
other obligation or security issued by the United States treasury 1,170
or any other obligation guaranteed as to principal or interest by 1,171
the United States.
Nothing in the classification of eligible securities and 1,173
obligations set forth in division (A)(1) of this section or in 1,174
the classifications of eligible securities and obligations set 1,175
forth in divisions (A)(2) to (9)(8) of this section shall be 1,177
construed to authorize any investment in stripped principal or 1,178
interest obligations of such eligible securities and obligations.
(2) Bonds, notes, debentures, or any other obligations or 1,180
securities issued by any federal government agency or 1,181
instrumentality, including but not limited to, the federal 1,182
national mortgage association, federal home loan bank, federal 1,183
farm credit bank, federal home loan mortgage corporation, 1,184
government national mortgage association, and student loan 1,185
marketing association. All federal agency securities shall be 1,186
direct issuances of federal government agencies or
instrumentalities. 1,187
(3) Time certificates of deposit or savings or deposit 1,189
accounts, including, but not limited to, passbook accounts, in 1,190
any eligible institution mentioned in section 135.32 of the 1,191
Revised Code; 1,192
(4) Bonds and other obligations of this state or the 1,194
30
political subdivisions of this state, provided that such 1,195
political subdivisions are located wholly or partly within the 1,196
same county as the investing authority;
(5) No-load money market mutual funds consisting 1,198
exclusively of obligations described in division (A)(1) or (2) of 1,199
this section and repurchase agreements secured by such 1,200
obligations, provided that investments in securities described in 1,202
this division are made only through eligible institutions
mentioned in section 135.32 of the Revised Code; 1,203
(6) The Ohio subdivision's fund as provided in section 1,205
135.45 of the Revised Code.; 1,206
(7) Securities lending agreements with any eligible 1,208
institution mentioned in section 135.32 of the Revised Code that 1,209
is a member of the federal reserve system or federal home loan 1,210
bank, under the terms of which agreements the investing authority 1,212
lends securities and the eligible institution agrees to 1,213
simultaneously exchange either securities described in division
(A)(1) or (2) of this section or cash or both securities and 1,214
cash, equal value for equal value; 1,215
(8) Commercial paper issued by any corporation 1,217
incorporated under the laws of the United States or a state if 1,218
both of the following conditions apply: 1,219
(a) Two nationally recognized rating agencies rank the 1,221
commercial paper in either of their two highest categories; 1,222
(b) The total amount invested in commercial paper at any 1,224
time does not exceed five per cent of the county's total average 1,226
portfolio, as determined and calculated by the investing 1,227
authority.
(9) Bankers acceptances, if the following conditions are 1,229
met:
(a) The acceptances mature in two hundred seventy days or 1,231
fewer from the date of settlement; 1,232
(b) The acceptances are eligible for purchase by the 1,234
federal reserve system; 1,235
31
(c) The total amount invested in bankers acceptances at 1,237
any time does not exceed ten per cent of the county's total 1,238
average portfolio, as determined and calculated by the investing 1,239
authority UP TO TWENTY-FIVE PER CENT OF THE COUNTY'S TOTAL 1,241
AVERAGE PORTFOLIO IN EITHER OF THE FOLLOWING INVESTMENTS: 1,242
(a) COMMERCIAL PAPER NOTES ISSUED BY AN ENTITY THAT IS 1,244
DEFINED IN DIVISION (D) OF SECTION 1705.01 OF THE REVISED CODE 1,246
AND THAT HAS ASSETS EXCEEDING FIVE HUNDRED MILLION DOLLARS, TO 1,248
WHICH NOTES ALL OF THE FOLLOWING APPLY: 1,249
(i) THE NOTES ARE RATED AT THE TIME OF PURCHASE IN THE 1,251
HIGHEST CLASSIFICATION ESTABLISHED BY AT LEAST TWO NATIONALLY 1,252
RECOGNIZED STANDARD RATING SERVICES. 1,253
(ii) THE AGGREGATE VALUE OF THE NOTES DOES NOT EXCEED TEN 1,255
PER CENT OF THE AGGREGATE VALUE OF THE OUTSTANDING COMMERCIAL 1,257
PAPER OF THE ISSUING CORPORATION. 1,258
(iii) THE NOTES MATURE NOT LATER THAN ONE HUNDRED EIGHTY 1,260
DAYS AFTER PURCHASE. 1,262
(b) BANKERS ACCEPTANCES OF BANKS THAT ARE INSURED BY THE 1,264
FEDERAL DEPOSIT INSURANCE CORPORATION AND TO WHICH BOTH OF THE 1,265
FOLLOWING APPLY: 1,266
(i) THE OBLIGATIONS ARE ELIGIBLE FOR PURCHASE BY THE 1,268
FEDERAL RESERVE SYSTEM. 1,269
(ii) THE OBLIGATIONS MATURE NOT LATER THAN ONE HUNDRED 1,271
EIGHTY DAYS AFTER PURCHASE. 1,273
NO INVESTMENT SHALL BE MADE PURSUANT TO DIVISION (A)(8) OF 1,275
THIS SECTION UNLESS THE INVESTING AUTHORITY HAS COMPLETED 1,276
ADDITIONAL TRAINING FOR MAKING THE INVESTMENTS AUTHORIZED BY 1,277
DIVISION (A)(8) OF THIS SECTION. THE TYPE AND AMOUNT OF 1,278
ADDITIONAL TRAINING SHALL BE APPROVED BY THE AUDITOR OF STATE AND 1,280
MAY BE CONDUCTED BY OR PROVIDED UNDER THE SUPERVISION OF THE
AUDITOR OF STATE. 1,281
(B) Nothing in the classifications of eligible obligations 1,283
and securities set forth in divisions (A)(1) to (9)(8) of this 1,284
section shall be construed to authorize investment in a 1,286
32
derivative, and no investing authority shall invest any county 1,287
inactive moneys or any moneys in a county library and local 1,288
government support fund in a derivative. For purposes of this 1,289
division, "derivative" means a financial instrument or contract 1,290
or obligation whose value or return is based upon or linked to
another asset or index, or both, separate from the financial 1,291
instrument, contract, or obligation itself. Any security, 1,292
obligation, trust account, or other instrument that is created 1,293
from an issue of the United States treasury or is created from an 1,294
obligation of a federal agency or instrumentality or is created 1,295
from both is considered a derivative instrument. An eligible 1,296
investment described in this section with a variable interest 1,297
rate payment, based upon a single interest payment or single
index comprised of other eligible investments provided for in 1,298
division (A)(1) or (2) of this section, is not a derivative, 1,299
provided that such variable rate investment has a maximum 1,300
maturity of two years.
(C) Any EXCEPT AS PROVIDED IN DIVISION (D) OF THIS 1,302
SECTION, ANY investment made pursuant to this section must mature 1,303
within five years from the date of settlement, unless the 1,305
investment is matched to a specific obligation or debt of the 1,306
county, and the investment is specifically approved by the 1,307
investment advisory committee. 1,308
(D) The investing authority may also enter into a written 1,310
repurchase agreement with any eligible institution mentioned in 1,312
section 135.32 of the Revised Code or any eligible securities
dealer pursuant to division (J) of this section, under the terms 1,313
of which agreement the investing authority purchases and the 1,314
eligible institution or dealer agrees unconditionally to 1,316
repurchase any of the securities listed in division (A)(1) or (2) 1,317
DIVISIONS (B)(1) TO (5), EXCEPT LETTERS OF CREDIT DESCRIBED IN 1,318
DIVISION (B)(2), of this section 135.18 OF THE REVISED CODE. The 1,319
market value of securities subject to an overnight WRITTEN 1,320
repurchase agreement must exceed the principal value of the 1,322
33
overnight WRITTEN repurchase agreement by at least two per cent. 1,324
A term WRITTEN repurchase agreement must exceed the principal 1,325
value of the overnight WRITTEN repurchase agreement, by at least 1,327
two per cent. A term WRITTEN repurchase agreement shall not 1,330
exceed thirty days, and the market value of securities subject to 1,331
a term WRITTEN repurchase agreement must exceed the principal 1,333
value of the term WRITTEN repurchase agreement by at least two 1,334
per cent and be marked to market daily. All securities purchased 1,335
pursuant to this division shall be delivered into the custody of 1,337
the investing authority or the qualified custodian of the
investing authority or an agent designated by the investing 1,338
authority. A WRITTEN repurchase agreement with an eligible 1,340
securities dealer shall be transacted on a delivery versus 1,341
payment basis. The agreement shall contain the requirement that 1,342
for each transaction pursuant to the agreement the participating 1,343
institution shall provide all of the following information: 1,344
(1) The par value of the securities; 1,346
(2) The type, rate, and maturity date of the securities; 1,348
(3) A numerical identifier generally accepted in the 1,350
securities industry that designates the securities. 1,351
No investing authority shall enter into a written 1,353
repurchase agreement under the terms of which the investing 1,354
authority agrees to sell securities owned by the county to a 1,356
purchaser and agrees with that purchaser to unconditionally
repurchase those securities. 1,357
(E) No investing authority shall make an investment under 1,360
this section, unless the investing authority, at the time of
making the investment, reasonably expects that the investment can 1,361
be held until its maturity. The investing authority's written 1,362
investment policy shall specify the conditions under which an 1,363
investment may be redeemed or sold prior to maturity. 1,364
(F) No investing authority shall pay a county's inactive 1,366
moneys or moneys of a county library and local government support 1,367
fund into a fund established by another subdivision, treasurer, 1,368
34
governing board, or investing authority, if that fund was 1,369
established by the subdivision, treasurer, governing board, or 1,370
investing authority for the purpose of investing or depositing 1,371
the public moneys of other subdivisions. This division does not
apply to the payment of public moneys into either of the 1,372
following:
(1) The Ohio subdivision's fund pursuant to division 1,374
(A)(6) of this section;
(2) A fund created solely for the purpose of acquiring, 1,376
constructing, owning, leasing, or operating municipal utilities 1,377
pursuant to the authority provided under section 715.02 of the 1,378
Revised Code or Section 4 of Article XVIII, Ohio Constitution. 1,379
For purposes of division (F) of this section, "subdivision" 1,381
includes a county. 1,382
(G) The use of leverage, in which the county uses its 1,384
current investment assets as collateral for the purpose of 1,385
purchasing other assets, is prohibited. The issuance of taxable 1,386
notes for the purpose of arbitrage is prohibited. Contracting to 1,387
sell securities not owned by the county, for the purpose of 1,388
purchasing such securities on the speculation that bond prices
will decline, is prohibited. 1,389
(H) Any securities, certificates of deposit, deposit 1,391
accounts, or any other documents evidencing deposits or 1,392
investments made under authority of this section shall be issued 1,393
in the name of the county with the county treasurer or investing 1,394
authority as the designated payee. If any such deposits or 1,395
investments are registrable either as to principal or interest, 1,396
or both, they shall be registered in the name of the treasurer. 1,397
(I) The investing authority shall be responsible for the 1,399
safekeeping of all documents evidencing a deposit or investment 1,400
acquired under this section including, but not limited to, 1,401
safekeeping receipts evidencing securities deposited with a 1,402
qualified trustee, as provided in section 135.37 of the Revised 1,403
Code, and documents confirming the purchase of securities under 1,404
35
any repurchase agreement under this section shall be deposited 1,405
with a qualified trustee, provided, however, that the qualified 1,406
trustee shall be required to report to the investing authority, 1,407
auditor of state, or an authorized outside auditor at any time 1,408
upon request as to the identity, market value, and location of 1,409
the document evidencing each security, and that if the 1,410
participating institution is a designated depository of the 1,411
county for the current period of designation, the securities that 1,412
are the subject of the repurchase agreement may be delivered to 1,413
the treasurer or held in trust by the participating institution 1,414
on behalf of the investing authority. 1,415
Upon the expiration of the term of office of an investing 1,417
authority or in the event of a vacancy in the office for any 1,418
reason, the officer or the officer's legal representative shall 1,420
transfer and deliver to the officer's successor all documents
mentioned in this division for which the officer has been 1,421
responsible for safekeeping. For all such documents transferred 1,423
and delivered, such officer shall be credited with, and the 1,424
officer's successor shall be charged with, the amount of moneys 1,425
so evidenced by such documents.
(J)(1) All investments, except for investments in 1,427
securities described in divisions (A)(5) and (6) of this section, 1,429
shall be made only through a member of the national association 1,430
of securities dealers, through a bank, savings bank, or savings 1,431
and loan association regulated by the superintendent of financial 1,433
institutions, or through an institution regulated by the 1,434
comptroller of the currency, federal deposit insurance 1,435
corporation, or board of governors of the federal reserve system. 1,436
(2) Payment for investments shall be made only upon the 1,438
delivery of securities representing such investments to the 1,440
treasurer, investing authority, or qualified trustee. If the 1,441
securities transferred are not represented by a certificate, 1,442
payment shall be made only upon receipt of confirmation of 1,443
transfer from the custodian by the treasurer, governing board, or 1,444
36
qualified trustee.
(K)(1) Except as otherwise provided in division (K)(2) of 1,446
this section, no investing authority shall make an investment or 1,447
deposit under this section, unless there is on file with the 1,448
auditor of state a written investment policy approved by the 1,449
investing authority. The policy shall require that all entities 1,450
conducting investment business with the investment authority 1,451
shall sign the investment policy of that investment authority.
All brokers, dealers, and financial institutions, described in 1,452
division (J)(1) of this section, initiating transactions with the 1,454
investment authority by giving advice or making investment 1,455
recommendations shall sign the investment authority's investment 1,456
policy thereby acknowledging their agreement to abide by the
policy's contents. All brokers, dealers, and financial 1,457
institutions, described in division (J)(1) of this section, 1,458
executing transactions initiated by the investment authority, 1,459
having read the policy's contents, shall sign the investment 1,460
policy thereby acknowledging their comprehension and receipt.
(2) If a written investment policy described in division 1,462
(K)(1) of this section is not filed on behalf of the county with 1,463
the auditor of state, the investing authority of that county 1,464
shall invest the county's inactive moneys and moneys of the 1,465
county library and local government support fund only in time 1,466
certificates of deposits or savings or deposit accounts pursuant 1,467
to division (A)(3) of this section or the Ohio subdivision's fund 1,468
pursuant to division (A)(6) of this section.
(L)(1) The investing authority shall establish and 1,470
maintain an inventory of all obligations and securities acquired 1,471
by the investing authority pursuant to this section. The 1,472
inventory shall include a description of each obligation or 1,473
security, including type, cost, par value, maturity date, 1,474
settlement date, and any coupon rate.
(2) The investing authority shall also keep a complete 1,476
record of all purchases and sales of the obligations and 1,477
37
securities made pursuant to this section. 1,478
(3) The investing authority shall maintain a monthly 1,480
portfolio report and issue a quarterly investment COPY OF THE 1,481
MONTHLY PORTFOLIO report describing such investments to the 1,482
county investment advisory committee, detailing the current 1,483
inventory of all obligations and securities, all transactions 1,484
during the month that affected the inventory, any income received 1,485
from the obligations and securities, and any investment expenses 1,486
paid, and stating the names of any persons effecting transactions 1,487
on behalf of the investing authority.
(4) The monthly portfolio report and the quarterly 1,489
investment report shall be A public records RECORD and available 1,491
for inspection under section 149.43 of the Revised Code. 1,492
(5) The inventory, AND the monthly portfolio report, and 1,494
the quarterly investment report shall be on standard forms 1,496
approved by the auditor of state and shall be filed with the 1,497
board of county commissioners.
(M) An investing authority may enter into a written 1,500
investment or deposit agreement that includes a provision under 1,501
which the parties agree to submit to nonbinding arbitration to 1,502
settle any controversy that may arise out of the agreement, 1,503
including any controversy pertaining to losses of public moneys 1,504
resulting from investment or deposit. The arbitration provision 1,505
shall be set forth entirely in the agreement, and the agreement 1,506
shall include a conspicuous notice to the parties that any party 1,508
to the arbitration may apply to the court of common pleas of the 1,509
county in which the arbitration was held for an order to vacate,
modify, or correct the award. Any such party may also apply to 1,510
the court for an order to change venue to a court of common pleas 1,511
located more than one hundred miles from the county in which the 1,512
investing authority is located.
For purposes of this division, "investment or deposit 1,514
agreement" means any agreement between an investing authority and 1,515
a person, under which agreement the person agrees to invest, 1,516
38
deposit, or otherwise manage, on behalf of the investing 1,517
authority, a county's inactive moneys or moneys in a county
library and local government support fund, or agrees to provide 1,518
investment advice to the investing authority. 1,519
(N) An investment held in the county portfolio on the 1,521
effective date of this amendment SEPTEMBER 27, 1996, that was a 1,523
legal investment under the law as it existed before the effective 1,524
date of this amendment SEPTEMBER 27, 1996, may be held until 1,525
maturity, or if the investment does not have a maturity date the 1,526
investment may be held until five years from the effective date 1,527
of this amendment SEPTEMBER 27, 1996, regardless of whether the 1,529
investment would qualify as a legal investment under the terms of
this section as amended. 1,530
Sec. 135.37. (A) Any institution described in section 1,539
135.32 of the Revised Code shall, at the time it receives a 1,540
deposit of public moneys under section 135.33 or 135.35 of the 1,541
Revised Code, pledge to and deposit with the investing authority, 1,542
as security for the repayment of all public moneys to be 1,543
deposited, eligible securities of aggregate market value equal to 1,544
or in excess of the amount of public moneys to be at the time so 1,545
deposited. Any securities listed in division (B) of section 1,546
135.18 of the Revised Code are eligible for such purpose. The 1,547
collateral so pledged or deposited may be in an amount that when 1,548
added to the portion of the deposit insured by the federal 1,549
deposit insurance corporation or any other agency or 1,550
instrumentality of the federal government will, in the aggregate, 1,551
equal or exceed the amount of public moneys so deposited; 1,552
provided that, when an investment of inactive moneys consists of 1,553
the purchase of one or more of the type of securities listed in 1,554
division (A)(1) or (2) of section 135.35 of the Revised Code, no 1,555
additional collateral need be pledged or deposited. 1,556
The investing authority also may require or accept surety 1,558
company bonds as collateral for public deposits, subject to the 1,559
provisions of divisions (A) to (E) of this section, and may 1,560
39
require that additional eligible securities be pledged or 1,561
deposited when depreciation occurs in the market value of any 1,562
securities pledged or deposited. 1,563
(B) The public depository may, at any time, provide for 1,565
the exchange or substitution of securities for other eligible 1,566
securities or the release of securities when the amount of public 1,567
moneys on deposit does not require that they be pledged or 1,568
deposited, by notifying the investing authority of its intent to 1,569
take such action. 1,570
Upon proper notification of the public depository's desire 1,572
for release of securities, the investing authority may sign a 1,573
release of such securities provided that the aggregate amount of 1,574
collateral remaining pledged or deposited meets the requirements 1,575
of divisions (A) to (E) of this section. 1,576
When a public depository desires to exchange or substitute 1,578
securities for other eligible securities, the investing authority 1,579
may release the securities pledged or deposited after the deposit 1,580
of other securities having a current market value equal to or 1,581
greater than the current market value of securities then on 1,582
deposit or after a safekeeping receipt has been received 1,583
evidencing the deposit and pledge of such securities. 1,584
(C) Upon request from the investing authority, the trustee 1,586
or the public depository shall furnish a statement of the 1,587
securities pledged against the public moneys deposited in the 1,588
public depository. 1,589
(D) If a public depository fails to pay over any part of 1,591
any public deposit made as provided by law, the investing 1,592
authority shall sell any pledged or deposited securities, as 1,593
prescribed in division (C) of section 135.18 of the Revised Code. 1,594
(E) A public depository may designate, in accordance with 1,596
the provisions of division (D) of section 135.18 of the Revised 1,597
Code, a trustee for the safekeeping of any pledged securities. 1,598
Such trustee shall be any bank or other institution eligible as a 1,599
trustee under division (I) of section 135.18 of the Revised Code, 1,600
40
except that, for the purposes of this section, a bank to which a 1,601
certificate of qualification is issued shall be an institution 1,602
mentioned in division (A) of section 135.32 of the Revised Code. 1,603
(F) In lieu of the pledging requirements prescribed in 1,605
divisions (A) to (E) of this section, an institution designated 1,606
as a public depository may pledge securities pursuant to section 1,607
135.181 of the Revised Code. 1,608
Sec. 307.55. (A) No claims against the county shall be 1,617
paid otherwise than upon the allowance of the board of county 1,619
commissioners, upon the warrant, INCLUDING AN ELECTRONIC WARRANT 1,620
AUTHORIZING DIRECT DEPOSIT FOR PAYMENT OF A COUNTY OBLIGATION IN 1,621
ACCORDANCE WITH DIVISION (F) OF SECTION 9.37 OF THE REVISED CODE, 1,622
of the county auditor, except in those cases in which the amount 1,623
due is fixed by law or is authorized to be fixed by some other 1,625
person or tribunal, in which case it shall be paid upon the 1,626
warrant of the auditor upon the proper certificate of the person 1,627
or tribunal allowing the claim.
(B) No public money shall be disbursed by the board or any 1,629
of its members, but shall be disbursed by the county treasurer, 1,631
upon the warrant, INCLUDING AN ELECTRONIC WARRANT AUTHORIZING 1,632
DIRECT DEPOSIT FOR PAYMENT OF A COUNTY OBLIGATION IN ACCORDANCE 1,633
WITH DIVISION (F) OF SECTION 9.37 OF THE REVISED CODE, of the 1,634
auditor specifying the name of the party entitled to such money, 1,635
on what account, and upon whose allowance, if not fixed by law. 1,636
Sec. 319.16. The county auditor shall issue warrants, 1,645
INCLUDING ELECTRONIC WARRANTS AUTHORIZING DIRECT DEPOSIT FOR 1,646
PAYMENT OF COUNTY OBLIGATIONS IN ACCORDANCE WITH DIVISION (F) OF 1,647
SECTION 9.37 OF THE REVISED CODE, on the county treasurer for all 1,649
moneys payable from the county treasury, upon presentation of the 1,650
proper order or voucher and evidentiary matter for the moneys, 1,651
and keep a record of all such warrants showing the number, date 1,652
of issue, amount for which drawn, in whose favor, for what 1,653
purpose, and on what fund. The auditor shall not issue a warrant 1,654
for the payment of any claim against the county, unless it is 1,655
41
allowed by the board of county commissioners, except where the 1,656
amount due is fixed by law or is allowed by an officer or 1,657
tribunal, including a county board of mental health or county 1,658
board of mental retardation and developmental disabilities, so 1,659
authorized by law. If the auditor questions the validity of an 1,660
expenditure that is within available appropriations and for which 1,661
a proper order or voucher and evidentiary matter is presented, 1,662
the auditor shall notify the board, officer, or tribunal who 1,663
presented the voucher. If the board, officer, or tribunal 1,664
determines that the expenditure is valid and the auditor 1,665
continues to refuse to issue the appropriate warrant on the 1,666
county treasury, a writ of mandamus may be sought. The court 1,667
shall issue a writ of mandamus for issuance of the warrant if the 1,668
court determines that the claim is valid. 1,669
Evidentiary matter includes original invoices, receipts, 1,671
bills and checks, and legible copies of contracts. 1,672
Sec. 321.15. No money shall be paid from the county 1,681
treasury, or transferred to any person for disbursement, except 1,682
on the warrant of the county auditor, INCLUDING AN ELECTRONIC 1,683
WARRANT AUTHORIZING DIRECT DEPOSIT, IN ACCORDANCE WITH DIVISION 1,684
(F) OF SECTION 9.37 OF THE REVISED CODE, FOR PAYMENT OF COUNTY 1,685
OBLIGATIONS.
Sec. 321.16. (A) When a warrant drawn on him as THE 1,694
county treasurer by the county auditor is presented for payment, 1,697
if there is money in the county treasury or depository to the 1,698
credit of the fund on which it is drawn, and the warrant is
endorsed by the payee thereof, the treasurer shall redeem it by 1,699
payment of cash or by check on the depository. 1,700
(B) THE WARRANT, AND ALL INFORMATION RELATED TO THE 1,702
PRESENTMENT OF THE WARRANT, MAY BE PROVIDED ELECTRONICALLY TO THE 1,703
COUNTY TREASURER.
Sec. 321.17. When a warrant is presented to the county 1,712
treasurer for payment, and is not paid, for want of money 1,713
belonging to the particular fund on which it is drawn, the 1,714
42
treasurer shall indorse RECORD the warrant, "Not AS NOT paid for 1,715
want of funds," with the date of its presentation, and sign his 1,716
name to the warrant. Such THE warrant shall thereafter bear 1,718
interest at the rate of six per cent per annum YEAR. A 1,720
memorandum of all such warrants shall be kept by the treasurer in 1,721
a book for that purpose. 1,722
Section 2. That existing sections 9.37, 129.60, 135.12, 1,724
135.14, 135.18, 135.181, 135.33, 135.341, 135.35, 135.37, 307.55, 1,725
319.16, 321.15, 321.16, and 321.17 of the Revised Code are hereby 1,727
repealed.