As Passed by the House 1
123rd General Assembly 4
Regular Session Sub. S. B. No. 82 5
1999-2000 6
SENATORS JOHNSON-WACHTMANN-MUMPER-DRAKE-WHITE-KEARNS- 8
BLESSING-HERINGTON-SPADA-LATELL-DiDONATO-HOTTINGER-FINAN- 9
RAY-WATTS-HORN-GARDNER-ARMBRUSTER-NEIN- 11
REPRESENTATIVES D. MILLER-SCHULER-EVANS-OLMAN-VERICH-MAIER-SULZER-
TIBERI-BUEHRER-MEAD-TERWILLEGER-O'BRIEN-SYKES-PATTON-AUSTRIA- 12
HARRIS-DISTEL-SCHULER-CALVERT-SALERNO-AMSTUTZ-PETERSON-WIDENER- 13
YOUNG-GRENDELL-BARRETT-ROBERTS 14
_________________________________________________________________ 15
A B I L L
To amend sections 135.14, 135.143, 135.22, 135.35, 17
and 321.46 of the Revised Code to permit 19
subdivision or county treasurers to invest in
certain no-load money market mutual funds in the 20
absence of a written investment policy on behalf
of the subdivision or county or in the cases of 21
exemptions from or noncompliance with specified 22
initial or continuing education requirements by
the subdivision or county treasurer; and to 23
modify the authority of the Treasurer of State to
invest state interim funds in securities lending 24
agreements.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO: 25
Section 1. That sections 135.14, 135.143, 135.22, 135.35, 27
and 321.46 of the Revised Code be amended 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
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classifications of obligations shall be eligible for such 45
investment or deposit:
(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 THE 74
institution 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
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exclusively of obligations described in division (B)(1) or (2) of 81
this section and repurchase agreements secured by such
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 investment made pursuant to this section must 106
mature within five years from the date of settlement, unless the 107
investment is matched to a specific obligation or debt of the 108
subdivision. 109
(E) The treasurer or governing board may also enter into a 111
written repurchase agreement with any eligible institution 112
mentioned in section 135.03 of the Revised Code or any eligible 113
dealer pursuant to division (M) of this section, under the terms 114
of which agreement the treasurer or governing board purchases, 115
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and such institution or dealer agrees unconditionally to 116
repurchase any of the securities listed in division (B)(1) or (2) 117
of this section. The market value of securities subject to an 118
overnight repurchase agreement must exceed the principal value of 119
the overnight repurchase agreement by at least two per cent. A 120
term repurchase agreement shall not exceed thirty days and the 121
market value of securities subject to a term repurchase agreement 122
must exceed the principal value of the term repurchase agreement 123
by at least two per cent and be marked to market daily. All 124
securities purchased pursuant to this division shall be delivered 125
into the custody of the treasurer or governing board or an agent 126
designated by the treasurer or governing board. A repurchase 127
agreement with an eligible securities dealer shall be transacted 128
on a delivery versus payment basis. The agreement shall contain 129
the requirement that for each transaction pursuant to the 130
agreement the participating institution or dealer shall provide 131
all of the following information:
(1) The par value of the securities; 133
(2) The type, rate, and maturity date of the securities; 135
(3) A numerical identifier generally accepted in the 137
securities industry that designates the securities. 138
No treasurer or governing board shall enter into a written 140
repurchase agreement under the terms of which the treasurer or 141
governing board agrees to sell securities owned by the 142
subdivision to a purchaser and agrees with that purchaser to 143
unconditionally repurchase those securities.
(F) No treasurer or governing board shall make an 145
investment under this section, unless the treasurer or governing 146
board, at the time of making the investment, reasonably expects 147
that the investment can be held until its maturity. 148
(G) No treasurer or governing board shall pay interim 150
moneys into a fund established by another subdivision, treasurer, 151
governing board, or investing authority, if that fund was 152
established for the purpose of investing the public moneys of 153
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other subdivisions. This division does not apply to the payment 154
of public moneys into either of the following:
(1) The Ohio subdivision's fund pursuant to division 157
(B)(6) of this section;
(2) A fund created solely for the purpose of acquiring, 159
constructing, owning, leasing, or operating municipal utilities 160
pursuant to the authority provided under section 715.02 of the 161
Revised Code or Section 4 of Article XVIII, Ohio Constitution. 162
For purposes of division (G) of this section, "subdivision" 164
includes a county. 165
(H) The use of leverage, in which the treasurer or 167
governing board uses its current investment assets as collateral 168
for the purpose of purchasing other assets, is prohibited. The 169
issuance of taxable notes for the purpose of arbitrage is 170
prohibited. Contracting to sell securities that have not yet 171
been acquired by the treasurer or governing board, for the
purpose of purchasing such securities on the speculation that 172
bond prices will decline, is prohibited. 173
(I) Whenever, during a period of designation, the 175
treasurer classifies public moneys as interim moneys, the 176
treasurer shall notify the governing board of such action. Such 177
THE notification shall be given within thirty days after such 178
classification and in the event the governing board does not 179
concur in such classification or in the investments or deposits 180
made under this section, the governing board may order the 181
treasurer to sell or liquidate any of such investments or 182
deposits, and any such order shall specifically describe the 183
investments or deposits and fix the date upon which they are to 184
be sold or liquidated. Investments or deposits so ordered to be 185
sold or liquidated shall be sold or liquidated for cash by the 186
treasurer on the date fixed in such order at the then current 187
market price. Neither the treasurer nor the members of the board 188
shall be held accountable for any loss occasioned by sales or 189
liquidations of investments or deposits at prices lower than 190
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their cost. Any loss or expense incurred in making such sales or 191
liquidations is payable as other expenses of the treasurer's 192
office.
(J) If any investments or deposits purchased under the 194
authority of this section are issuable to a designated payee or 195
to the order of a designated payee, the name of the treasurer and 196
the title of the treasurer's office shall be so designated. If 197
any such securities are registrable either as to principal or 198
interest, or both, then such securities shall be registered in 199
the name of the treasurer as such. 200
(K) The treasurer is responsible for the safekeeping of 202
all documents evidencing a deposit or investment acquired by the 203
treasurer under this section. Any securities may be deposited 204
for safekeeping with a qualified trustee as provided in section 205
135.18 of the Revised Code, except the delivery of securities 206
acquired under any repurchase agreement under this section shall 207
be made to a qualified trustee, provided, however, that the 208
qualified trustee shall be required to report to the treasurer, 209
governing board, auditor of state, or an authorized outside 210
auditor at any time upon request as to the identity, market 211
value, and location of the document evidencing each security, and 212
that if the participating institution is a designated depository 213
of the subdivision for the current period of designation, the 214
securities that are the subject of the repurchase agreement may 215
be delivered to the treasurer or held in trust by the 216
participating institution on behalf of the subdivision. Interest 217
earned on any investments or deposits authorized by this section 218
shall be collected by the treasurer and credited by the treasurer 220
to the proper fund of the subdivision.
Upon the expiration of the term of office of a treasurer or 222
in the event of a vacancy in the office of treasurer by reason of 223
death, resignation, removal from office, or otherwise, the 224
treasurer or the treasurer's legal representative shall transfer 225
and deliver to the treasurer's successor all documents evidencing 226
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a deposit or investment held by the treasurer. For the 227
investments and deposits so transferred and delivered, such 228
treasurer shall be credited with and the treasurer's successor 229
shall be charged with the amount of money held in such
investments and deposits. 230
(L) Whenever investments or deposits acquired under this 232
section mature and become due and payable, the treasurer shall 233
present them for payment according to their tenor, and shall 234
collect the moneys payable thereon. The moneys so collected 235
shall be treated as public moneys subject to sections 135.01 to 236
135.21 of the Revised Code. 237
(M)(1) All investments, except for investments in 239
securities described in divisions (B)(5) and (6) of this section 240
and for investments by a municipal corporation in the issues of 241
such municipal corporation, shall be made only through a member 242
of the national association of securities dealers, through a 243
bank, savings bank, or savings and loan association regulated by 244
the superintendent of financial institutions, or through an 245
institution regulated by the comptroller of the currency, federal 246
deposit insurance corporation, or board of governors of the 247
federal reserve system.
(2) Payment for investments shall be made only upon the 249
delivery of securities representing such investments to the 250
treasurer, governing board, or qualified trustee. If the 251
securities transferred are not represented by a certificate, 252
payment shall be made only upon receipt of confirmation of 253
transfer from the custodian by the treasurer, governing board, or 254
qualified trustee. 255
(N)(1) Except as otherwise provided in divisions (N)(2) 257
and (3) of this section, no treasurer or governing board shall 258
make an investment or deposit under this section, unless there is 260
on file with the auditor of state a written investment policy 261
approved by the treasurer or governing board. The policy shall 262
require that all entities conducting investment business with the 263
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treasurer or governing board shall sign the investment policy of 264
that subdivision. All brokers, dealers, and financial 265
institutions, described in division (M)(1) of this section, 266
initiating transactions with the treasurer or governing board by 267
giving advice or making investment recommendations shall sign the 268
treasurer's or governing board's investment policy thereby
acknowledging their agreement to abide by the policy's contents. 269
All brokers, dealers, and financial institutions, described in 270
division (M)(1) of this section, executing transactions initiated 271
by the treasurer or governing board, having read the policy's 272
contents, shall sign the investment policy thereby acknowledging 273
their comprehension and receipt.
(2) If a written investment policy described in division 275
(N)(1) of this section is not filed on behalf of the subdivision 276
with the auditor of state, the treasurer or governing board of 277
that subdivision shall invest the subdivision's interim moneys 278
only in interim deposits pursuant to division (B)(3) of this 279
section, NO-LOAD MONEY MARKET MUTUAL FUNDS PURSUANT TO DIVISION 280
(B)(5) OF THIS SECTION, or the Ohio subdivision's fund pursuant 281
to division (B)(6) of this section.
(3) Divisions (N)(1) and (2) of this section do not apply 283
to a treasurer or governing board of a subdivision whose average 284
annual portfolio of investments held pursuant to this section is 285
one hundred thousand dollars or less, provided that the treasurer 286
or governing board certifies, on a form prescribed by the auditor 287
of state, that the treasurer or governing board will comply and 288
is in compliance with the provisions of sections 135.01 to 135.21 290
of the Revised Code.
(O) A treasurer or governing board may enter into a 293
written investment or deposit agreement that includes a provision 294
under which the parties agree to submit to nonbinding arbitration 295
to settle any controversy that may arise out of the agreement, 296
including any controversy pertaining to losses of public moneys 297
resulting from investment or deposit. The arbitration provision 298
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shall be set forth entirely in the agreement, and the agreement 299
shall include a conspicuous notice to the parties that any party 301
to the arbitration may apply to the court of common pleas of the 302
county in which the arbitration was held for an order to vacate,
modify, or correct the award. Any such party may also apply to 303
the court for an order to change venue to a court of common pleas 304
located more than one hundred miles from the county in which the 305
treasurer or governing board is located. 306
For purposes of this division, "investment or deposit 308
agreement" means any agreement between a treasurer or governing 309
board and a person, under which agreement the person agrees to 310
invest, deposit, or otherwise manage a subdivision's interim 311
moneys on behalf of the treasurer or governing board, or agrees 312
to provide investment advice to the treasurer or governing board.
(P) An investment made by the treasurer or governing board 314
pursuant to this section prior to the effective date of this 315
amendment SEPTEMBER 27, 1996, that was a legal investment under 317
the law as it existed before the effective date of this amendment 319
SEPTEMBER 27, 1996, may be held until maturity, or if the 320
investment does not have a maturity date, it may be held until 321
five years from the effective date of this amendment SEPTEMBER 323
27, 1996, regardless of whether the investment would qualify as a 324
legal investment under the terms of this section as amended. 325
Sec. 135.143. (A) The treasurer of state may invest or 334
execute transactions for any part or all of the interim funds of 335
the state in the following classifications of obligations: 336
(1) United States treasury bills, notes, bonds, or any 338
other obligations or securities issued by the United States 339
treasury or any other obligation guaranteed as to principal and 340
interest by the United States; 341
(2) Bonds, notes, debentures, or any other obligations or 343
securities issued by any federal government agency or 344
instrumentality; 345
(3) Bonds and other obligations of the sinking fund of the 347
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state of Ohio and the Ohio public facilities commission; 348
(4)(a) Written repurchase agreements with any eligible 350
Ohio financial institution that is a member of the federal 351
reserve system or federal home loan bank or any recognized United 352
States government securities dealer, under the terms of which 353
agreement the treasurer of state purchases and the eligible 354
financial institution or dealer agrees unconditionally to 355
repurchase any of the securities that are listed in division 356
(A)(1) or (2) of this section and that will mature or are 357
redeemable within ten years from the date of purchase. The 358
market value of securities subject to these transactions must 359
exceed the principal value of the repurchase agreement by an 360
amount specified by the treasurer of state, and the securities 361
must be delivered into the custody of the treasurer of state or 362
the qualified trustee or agent designated by the treasurer of 363
state. The agreement shall contain the requirement that for each 364
transaction pursuant to the agreement, the participating 365
institution or dealer shall provide all of the following 366
information: 367
(i) The par value of the securities; 369
(ii) The type, rate, and maturity date of the securities; 371
(iii) A numerical identifier generally accepted in the 373
securities industry that designates the securities. 374
(b) The treasurer of state also may sell any securities, 376
listed in division (A)(1) or (2) of this section, regardless of 377
maturity or time of redemption of the securities, under the same 378
terms and conditions for repurchase, provided that the securities 379
have been fully paid for and are owned by the treasurer of state 380
at the time of the sale. 381
(5) Securities lending agreements with any eligible 383
financial institution that is a member of the federal reserve 384
system or federal home loan bank or any recognized United States 385
government securities dealer, under the terms of which agreement 386
the treasurer of state lends securities and the eligible 387
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financial institution or dealer agrees to simultaneously exchange 388
similar securities or cash, equal value for equal value;. 389
SECURITIES AND CASH RECEIVED AS COLLATERAL FOR A SECURITIES 391
LENDING AGREEMENT ARE NOT INTERIM FUNDS OF THE STATE. THE 392
INVESTMENT OF CASH COLLATERAL RECEIVED PURSUANT TO A SECURITIES 393
LENDING AGREEMENT MAY BE INVESTED ONLY IN SUCH INSTRUMENTS 394
SPECIFIED BY THE TREASURER OF STATE IN ACCORDANCE WITH A WRITTEN 395
INVESTMENT POLICY.
(6) Various forms of commercial paper issued by any 397
corporation that is incorporated under the laws of the United 398
States or a state, which such notes are rated in the two highest 399
categories by two nationally recognized rating agencies, provided 400
that the total amount invested in commercial paper at any time 401
shall not exceed five per cent of the state's total average 402
portfolio, as determined and calculated by the treasurer of 403
state; 404
(7) Bankers acceptances, maturing in two hundred seventy 406
days or less, which are eligible for purchase by the federal 407
reserve system, provided that the total amount invested in 408
bankers acceptances at any time shall not exceed ten per cent of 409
the state's total average portfolio, as determined and calculated 410
by the treasurer of state; 411
(8) Certificates of deposit in eligible institutions 413
applying for interim moneys as provided in section 135.08 of the 414
Revised Code, including linked deposits as provided in sections 415
135.61 to 135.67 of the Revised Code, agricultural linked 416
deposits as provided in sections 135.71 to 135.76 of the Revised 417
Code, and depressed economic area linked deposits as provided in 418
sections 135.81 to 135.88 of the Revised Code; 419
(9) The state treasurer's investment pool authorized under 421
section 135.45 of the Revised Code; 422
(10) Debt interests rated investment grade by a nationally 424
recognized rating agency and issued by corporations that are 425
incorporated under the laws of the United States or a state, or 426
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issued by foreign nations diplomatically recognized by the United 427
States government, or any instrument based on, derived from, or 428
related to such interests. All interest and principal shall be 429
denominated and payable in United States funds. The investments 430
made under division (A)(10) of this section shall not exceed in 431
the aggregate five per cent of the state's total average 432
portfolio, as determined and calculated by the treasurer of 433
state. The investments made under division (A)(10) of this 434
section in debt interests issued by foreign nations shall not 435
exceed in the aggregate one per cent of the state's total average 436
portfolio. The investments made under division (A)(10) of this 437
section in the debt interests of a single issuer shall not exceed 438
in the aggregate one-half of one per cent of the state's total 439
average portfolio. 440
The treasurer of state shall invest under division (A)(10) 442
of this section in a debt interest issued by a foreign nation 443
only if the debt interest is backed by the full faith and credit 444
of that foreign nation. For purposes of division (A)(10) of this 445
section, a debt interest is rated investment grade by a 446
nationally recognized rating agency if either the debt interest 447
itself or the issuer of the debt interest is rated, or is 448
implicitly rated, investment grade by a nationally recognized 449
rating agency. 450
(11) No-load money market mutual funds consisting 452
exclusively of obligations described in division (A)(1) or (2) of 453
this section and repurchase agreements secured by such 454
obligations. 455
(12) Obligations of a board of education issued under 457
authority of section 133.10 or 133.301 of the Revised Code. 458
(B) Whenever, during a period of designation, the 460
treasurer of state classifies public moneys as interim moneys, 461
the treasurer of state shall notify the state board of deposit of 462
such action. Such notification shall be given within thirty days 463
after such classification and in the event the state board of 464
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deposit does not concur in such classification or in the 465
investments or deposits made under this section, the board may 466
order the treasurer of state to sell or liquidate any of such 467
investments or deposits, and any such order shall specifically 468
describe the investments or deposits and fix the date upon which 469
they are to be sold or liquidated. Investments or deposits so 470
ordered to be sold or liquidated shall be sold or liquidated for 471
cash by the treasurer of state on the date fixed in such order at 472
the then current market price. Neither the treasurer of state 473
nor the members of the state board of deposit shall be held 474
accountable for any loss occasioned by sales or liquidations of 475
investments or deposits at prices lower than their cost. Any 476
loss or expense incurred in making such sales or liquidations is 477
payable as other expenses of the treasurer's office. 478
(C) If any securities or obligations invested in by the 480
treasurer of state pursuant to this section are registrable 481
either as to principal or interest, or both, such securities or 482
obligations shall be registered in the name of the treasurer of 483
state. 484
(D) The treasurer of state is responsible for the 486
safekeeping of all securities or obligations under this section. 487
Any such securities or obligations may be deposited for 488
safekeeping as provided in section 113.05 of the Revised Code. 489
(E) Interest earned on any investments or deposits 491
authorized by this section shall be collected by the treasurer of 492
state and credited by the treasurer of state to the proper fund 493
of the state. 494
(F) Whenever investments or deposits acquired under this 496
section mature and become due and payable, the treasurer of state 497
shall present them for payment according to their tenor, and 498
shall collect the moneys payable thereon. The moneys so 499
collected shall be treated as public moneys subject to sections 500
135.01 to 135.21 of the Revised Code. 501
(G) The treasurer of state and any board of education 503
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issuing obligations referred to in division (A)(12) of this 504
section may enter into an agreement providing for: 505
(1) The purchase of those obligations by the treasurer of 507
state on terms and subject to conditions set forth in the 508
agreement;
(2) The payment by the board of education to the treasurer 510
of state of a reasonable fee as consideration for the agreement 512
of the treasurer of state to purchase those obligations; 513
provided, however, that the treasurer of state shall not be
authorized to enter into any such agreement with the board of 514
education of a school district that has an outstanding obligation 515
with respect to a loan received under authority of section 516
3313.483 of the Revised Code.
(H) For purposes of division (G) of this section, a fee 519
shall not be considered reasonable unless it is set to recover 520
only the direct costs and a reasonable estimate of the indirect 521
costs associated with the purchasing of obligations of a school 522
board under division (G) of this section and any reselling of the 523
obligations or any interest in the obligations, including 524
interests in a fund comprised of the obligations. No money from 525
the general revenue fund shall be used to subsidize the purchase 526
or resale of these obligations. 527
(I) All money collected by the treasurer of state from the 530
fee imposed by division (G) of this section shall be deposited to 532
the credit of the state school board obligations fund, which is 533
hereby created in the state treasury. Money credited to the fund 534
shall be used solely to pay the treasurer of state's direct and 535
indirect costs associated with purchasing and reselling 536
obligations of a board of education under division (G) of this 537
section.
Sec. 135.22. (A) For purposes of this section: 546
(1) "Treasurer" has the same meaning as in section 135.01 548
of the Revised Code, but does not include the treasurer of state. 549
"Treasurer" includes any person whose duties include making 550
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investment decisions with respect to the investment or deposit of 551
interim moneys.
(2) "Subdivision" has the same meaning as in section 553
135.01 of the Revised Code. 554
(B) To enhance the background and working knowledge of 556
treasurers in investments, cash management, and ethics, the 557
treasurer of state shall provide annual continuing education 558
programs for treasurers. A treasurer annually shall complete the 560
continuing education programs described in this section, unless 561
the treasurer annually provides a notice of exemption described 562
in division (E) of this section.
(C) The treasurer of state shall determine the manner, 564
content, and length of the continuing education programs after 565
consultation with appropriate statewide organizations of local 566
government officials.
(D) Upon successful completion of a continuing education 568
program required by this section, the treasurer of state shall 569
issue a certificate indicating that the treasurer has 570
successfully completed the continuing education program
prescribed by the treasurer of state. The treasurer of state 571
shall forward to the auditor of state any certificates issued 572
pursuant to this division by the treasurer of state. The auditor 573
of state shall maintain in the auditor's records any certificates 574
forwarded by the treasurer of state pursuant to this division. 575
As part of the auditor of state's audit of the subdivision
conducted in accordance with section 117.11 of the Revised Code, 576
the auditor of state shall report whether the treasurer is in 577
compliance with this section of the Revised Code. 578
(E) Division (B) of this section does not apply to any 581
treasurer who annually provides a notice of exemption to the 582
auditor of state. The notice shall be certified by the treasurer 583
of state and shall provide that the treasurer is not subject to
the continuing education requirements set forth in division (B) 584
of this section, because the treasurer invests or deposits public 585
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moneys in the following investments only: 586
(1) Interim deposits pursuant to division (B)(3) of 588
section 135.14 of the Revised Code; 589
(2) NO-LOAD MONEY MARKET MUTUAL FUNDS PURSUANT TO DIVISION 591
(B)(5) OF SECTION 135.14 OF THE REVISED CODE; 592
(3) The Ohio subdivision's fund pursuant to division 594
(B)(6) of section 135.14 of the Revised Code. 596
(F) In carrying out the duties required by this section, 598
the treasurer of state may charge the subdivision served by the 599
treasurer a registration fee that will meet actual and necessary 600
expenses in connection with the training of the treasurer, 601
including instruction fees, site acquisition costs, and the cost 602
of course materials. Any necessary personal expenses of a
treasurer incurred as a result of attending the continuing 603
education courses shall be borne by the subdivision represented 604
by the treasurer.
(G) The treasurer of state may allow any other interested 606
person to attend any of the continuing education programs that 607
are held pursuant to this section, provided that before attending 608
any such continuing education program, the interested person has 609
paid to the treasurer of state the full registration fee set for 610
the continuing education program.
(H) All funds collected pursuant to this section shall be 612
paid into the county treasurer education fund created pursuant to 613
section 321.46 of the Revised Code, and the actual and necessary 615
expenses of the treasurer of state in conducting the continuing 616
education programs required by this section shall be paid from 617
this fund.
(I) The treasurer of state may adopt reasonable rules not 619
inconsistent with this section for the implementation of this 620
section.
Sec. 135.35. (A) The investing authority shall deposit or 629
invest any part or all of the county's inactive moneys and shall 630
invest all of the money in the county library and local 631
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government support fund when required by section 135.352 of the 632
Revised Code. The following classifications of securities and 633
obligations are eligible for such deposit or investment: 634
(1) United States treasury bills, notes, bonds, or any 636
other obligation or security issued by the United States treasury 637
or any other obligation guaranteed as to principal or interest by 638
the United States.
Nothing in the classification of eligible securities and 640
obligations set forth in division (A)(1) of this section or in 641
the classifications of eligible securities and obligations set 642
forth in divisions (A)(2) to (9) of this section shall be 643
construed to authorize any investment in stripped principal or 644
interest obligations of such eligible securities and obligations.
(2) Bonds, notes, debentures, or any other obligations or 646
securities issued by any federal government agency or 647
instrumentality, including but not limited to, the federal 648
national mortgage association, federal home loan bank, federal 649
farm credit bank, federal home loan mortgage corporation, 650
government national mortgage association, and student loan 651
marketing association. All federal agency securities shall be 652
direct issuances of federal government agencies or
instrumentalities. 653
(3) Time certificates of deposit or savings or deposit 655
accounts, including, but not limited to, passbook accounts, in 656
any eligible institution mentioned in section 135.32 of the 657
Revised Code; 658
(4) Bonds and other obligations of this state or the 660
political subdivisions of this state, provided that such 661
political subdivisions are located wholly or partly within the 662
same county as the investing authority;
(5) No-load money market mutual funds consisting 664
exclusively of obligations described in division (A)(1) or (2) of 665
this section and repurchase agreements secured by such 666
obligations, provided that investments in securities described in 668
18
this division are made only through eligible institutions
mentioned in section 135.32 of the Revised Code; 669
(6) The Ohio subdivision's fund as provided in section 671
135.45 of the Revised Code.; 672
(7) Securities lending agreements with any eligible 674
institution mentioned in section 135.32 of the Revised Code that 675
is a member of the federal reserve system or federal home loan 676
bank, under the terms of which agreements the investing authority 678
lends securities and the eligible institution agrees to 679
simultaneously exchange either securities described in division
(A)(1) or (2) of this section or cash or both securities and 680
cash, equal value for equal value; 681
(8) Commercial paper issued by any corporation 683
incorporated under the laws of the United States or a state if 684
both of the following conditions apply: 685
(a) Two nationally recognized rating agencies rank the 687
commercial paper in either of their two highest categories; 688
(b) The total amount invested in commercial paper at any 690
time does not exceed five per cent of the county's total average 692
portfolio, as determined and calculated by the investing 693
authority.
(9) Bankers acceptances, if the following conditions are 695
met:
(a) The acceptances mature in two hundred seventy days or 697
fewer from the date of settlement; 698
(b) The acceptances are eligible for purchase by the 700
federal reserve system; 701
(c) The total amount invested in bankers acceptances at 703
any time does not exceed ten per cent of the county's total 704
average portfolio, as determined and calculated by the investing 705
authority.
(B) Nothing in the classifications of eligible obligations 707
and securities set forth in divisions (A)(1) to (9) of this 708
section shall be construed to authorize investment in a 709
19
derivative, and no investing authority shall invest any county 710
inactive moneys or any moneys in a county library and local 711
government support fund in a derivative. For purposes of this 712
division, "derivative" means a financial instrument or contract 713
or obligation whose value or return is based upon or linked to
another asset or index, or both, separate from the financial 714
instrument, contract, or obligation itself. Any security, 715
obligation, trust account, or other instrument that is created 716
from an issue of the United States treasury or is created from an 717
obligation of a federal agency or instrumentality or is created 718
from both is considered a derivative instrument. An eligible 719
investment described in this section with a variable interest 720
rate payment, based upon a single interest payment or single
index comprised of other eligible investments provided for in 721
division (A)(1) or (2) of this section, is not a derivative, 722
provided that such variable rate investment has a maximum 723
maturity of two years.
(C) Any investment made pursuant to this section must 725
mature within five years from the date of settlement, unless the 726
investment is matched to a specific obligation or debt of the 727
county, and the investment is specifically approved by the 728
investment advisory committee. 729
(D) The investing authority may also enter into a written 731
repurchase agreement with any eligible institution mentioned in 733
section 135.32 of the Revised Code or any eligible securities
dealer pursuant to division (J) of this section, under the terms 734
of which agreement the investing authority purchases and the 735
eligible institution or dealer agrees unconditionally to 737
repurchase any of the securities listed in division (A)(1) or (2) 738
of this section. The market value of securities subject to an 739
overnight repurchase agreement must exceed the principal value of 740
the overnight repurchase agreement by at least two per cent. A 741
term repurchase agreement must exceed the principal value of the
overnight repurchase agreement, by at least two per cent. A term 742
20
repurchase agreement shall not exceed thirty days, and the market 743
value of securities subject to a term repurchase agreement must 744
exceed the principal value of the term repurchase agreement by at 745
least two per cent and be marked to market daily. All securities 746
purchased pursuant to this division shall be delivered into the 747
custody of the investing authority or the qualified custodian of 748
the investing authority or an agent designated by the investing 749
authority. A repurchase agreement with an eligible securities 750
dealer shall be transacted on a delivery versus payment basis. 751
The agreement shall contain the requirement that for each 752
transaction pursuant to the agreement the participating 753
institution shall provide all of the following information: 754
(1) The par value of the securities; 756
(2) The type, rate, and maturity date of the securities; 758
(3) A numerical identifier generally accepted in the 760
securities industry that designates the securities. 761
No investing authority shall enter into a written 763
repurchase agreement under the terms of which the investing 764
authority agrees to sell securities owned by the county to a 766
purchaser and agrees with that purchaser to unconditionally
repurchase those securities. 767
(E) No investing authority shall make an investment under 770
this section, unless the investing authority, at the time of
making the investment, reasonably expects that the investment can 771
be held until its maturity. The investing authority's written 772
investment policy shall specify the conditions under which an 773
investment may be redeemed or sold prior to maturity. 774
(F) No investing authority shall pay a county's inactive 776
moneys or moneys of a county library and local government support 777
fund into a fund established by another subdivision, treasurer, 778
governing board, or investing authority, if that fund was 779
established by the subdivision, treasurer, governing board, or 780
investing authority for the purpose of investing or depositing 781
the public moneys of other subdivisions. This division does not
21
apply to the payment of public moneys into either of the 782
following:
(1) The Ohio subdivision's fund pursuant to division 784
(A)(6) of this section;
(2) A fund created solely for the purpose of acquiring, 786
constructing, owning, leasing, or operating municipal utilities 787
pursuant to the authority provided under section 715.02 of the 788
Revised Code or Section 4 of Article XVIII, Ohio Constitution. 789
For purposes of division (F) of this section, "subdivision" 791
includes a county. 792
(G) The use of leverage, in which the county uses its 794
current investment assets as collateral for the purpose of 795
purchasing other assets, is prohibited. The issuance of taxable 796
notes for the purpose of arbitrage is prohibited. Contracting to 797
sell securities not owned by the county, for the purpose of 798
purchasing such securities on the speculation that bond prices
will decline, is prohibited. 799
(H) Any securities, certificates of deposit, deposit 801
accounts, or any other documents evidencing deposits or 802
investments made under authority of this section shall be issued 803
in the name of the county with the county treasurer or investing 804
authority as the designated payee. If any such deposits or 805
investments are registrable either as to principal or interest, 806
or both, they shall be registered in the name of the treasurer. 807
(I) The investing authority shall be responsible for the 809
safekeeping of all documents evidencing a deposit or investment 810
acquired under this section including, but not limited to, 811
safekeeping receipts evidencing securities deposited with a 812
qualified trustee, as provided in section 135.37 of the Revised 813
Code, and documents confirming the purchase of securities under 814
any repurchase agreement under this section shall be deposited 815
with a qualified trustee, provided, however, that the qualified 816
trustee shall be required to report to the investing authority, 817
auditor of state, or an authorized outside auditor at any time 818
22
upon request as to the identity, market value, and location of 819
the document evidencing each security, and that if the 820
participating institution is a designated depository of the 821
county for the current period of designation, the securities that 822
are the subject of the repurchase agreement may be delivered to 823
the treasurer or held in trust by the participating institution 824
on behalf of the investing authority. 825
Upon the expiration of the term of office of an investing 827
authority or in the event of a vacancy in the office for any 828
reason, the officer or the officer's legal representative shall 830
transfer and deliver to the officer's successor all documents
mentioned in this division for which the officer has been 831
responsible for safekeeping. For all such documents transferred 833
and delivered, such officer shall be credited with, and the 834
officer's successor shall be charged with, the amount of moneys 835
so evidenced by such documents.
(J)(1) All investments, except for investments in 837
securities described in divisions (A)(5) and (6) of this section, 839
shall be made only through a member of the national association 840
of securities dealers, through a bank, savings bank, or savings 841
and loan association regulated by the superintendent of financial 843
institutions, or through an institution regulated by the 844
comptroller of the currency, federal deposit insurance 845
corporation, or board of governors of the federal reserve system. 846
(2) Payment for investments shall be made only upon the 848
delivery of securities representing such investments to the 850
treasurer, investing authority, or qualified trustee. If the 851
securities transferred are not represented by a certificate, 852
payment shall be made only upon receipt of confirmation of 853
transfer from the custodian by the treasurer, governing board, or 854
qualified trustee.
(K)(1) Except as otherwise provided in division (K)(2) of 856
this section, no investing authority shall make an investment or 857
deposit under this section, unless there is on file with the 858
23
auditor of state a written investment policy approved by the 859
investing authority. The policy shall require that all entities 860
conducting investment business with the investment authority 861
shall sign the investment policy of that investment authority.
All brokers, dealers, and financial institutions, described in 862
division (J)(1) of this section, initiating transactions with the 864
investment authority by giving advice or making investment 865
recommendations shall sign the investment authority's investment 866
policy thereby acknowledging their agreement to abide by the
policy's contents. All brokers, dealers, and financial 867
institutions, described in division (J)(1) of this section, 868
executing transactions initiated by the investment authority, 869
having read the policy's contents, shall sign the investment 870
policy thereby acknowledging their comprehension and receipt.
(2) If a written investment policy described in division 872
(K)(1) of this section is not filed on behalf of the county with 873
the auditor of state, the investing authority of that county 874
shall invest the county's inactive moneys and moneys of the 875
county library and local government support fund only in time 876
certificates of deposits or savings or deposit accounts pursuant 877
to division (A)(3) of this section, NO-LOAD MONEY MARKET MUTUAL 878
FUNDS PURSUANT TO DIVISION (A)(5) OF THIS SECTION, or the Ohio 879
subdivision's fund pursuant to division (A)(6) of this section.
(L)(1) The investing authority shall establish and 881
maintain an inventory of all obligations and securities acquired 882
by the investing authority pursuant to this section. The 883
inventory shall include a description of each obligation or 884
security, including type, cost, par value, maturity date, 885
settlement date, and any coupon rate.
(2) The investing authority shall also keep a complete 887
record of all purchases and sales of the obligations and 888
securities made pursuant to this section. 889
(3) The investing authority shall maintain a monthly 891
portfolio report and issue a quarterly investment report 892
24
describing such investments to the county investment advisory 893
committee, detailing the current inventory of all obligations and 894
securities, all transactions during the month that affected the 895
inventory, any income received from the obligations and
securities, and any investment expenses paid, and stating the 896
names of any persons effecting transactions on behalf of the 897
investing authority.
(4) The monthly portfolio report and the quarterly 899
investment report shall be public records and available for 900
inspection under section 149.43 of the Revised Code.
(5) The inventory, the monthly portfolio report, and the 902
quarterly investment report shall be on standard forms approved 903
by the auditor of state and shall be filed with the board of 904
county commissioners.
(M) An investing authority may enter into a written 907
investment or deposit agreement that includes a provision under 908
which the parties agree to submit to nonbinding arbitration to 909
settle any controversy that may arise out of the agreement, 910
including any controversy pertaining to losses of public moneys 911
resulting from investment or deposit. The arbitration provision 912
shall be set forth entirely in the agreement, and the agreement 913
shall include a conspicuous notice to the parties that any party 915
to the arbitration may apply to the court of common pleas of the 916
county in which the arbitration was held for an order to vacate,
modify, or correct the award. Any such party may also apply to 917
the court for an order to change venue to a court of common pleas 918
located more than one hundred miles from the county in which the 919
investing authority is located.
For purposes of this division, "investment or deposit 921
agreement" means any agreement between an investing authority and 922
a person, under which agreement the person agrees to invest, 923
deposit, or otherwise manage, on behalf of the investing 924
authority, a county's inactive moneys or moneys in a county
library and local government support fund, or agrees to provide 925
25
investment advice to the investing authority. 926
(N) An investment held in the county portfolio on the 928
effective date of this amendment SEPTEMBER 27, 1996, that was a 930
legal investment under the law as it existed before the effective 931
date of this amendment SEPTEMBER 27, 1996, may be held until 932
maturity, or if the investment does not have a maturity date the 933
investment may be held until five years from the effective date 934
of this amendment SEPTEMBER 27, 1996, regardless of whether the 936
investment would qualify as a legal investment under the terms of
this section as amended. 937
Sec. 321.46. (A) To enhance the background and working 947
knowledge of county treasurers in governmental accounting, 948
portfolio reporting and compliance, investments, and cash 949
management, the auditor of state and the treasurer of state shall 950
conduct education programs for persons elected for the first time 951
to the office of county treasurer and shall hold annual 952
continuing education programs for persons who continue to hold 953
the office of county treasurer. Education programs for newly 954
elected county treasurers shall be held between the first day of 955
December and the first Monday of September next following that 956
person's election to the office of county treasurer. Similar 957
initial training may also be provided to any county treasurer who 958
is appointed to fill a vacancy or who is elected at a special 959
election.
(B)(1) The auditor of state shall determine the manner and 961
content of the education programs in the subject areas of 963
governmental accounting and portfolio reporting and compliance. 964
In those areas, newly elected county treasurers shall be required 965
to take at least thirteen hours of education before taking 966
office.
(2) The treasurer of state shall determine the manner and 968
content of the education programs in the subject areas of 969
investments and cash management. In those areas, newly elected 970
county treasurers shall be required to take at least thirteen 971
26
hours of education before taking office. 972
(3) After completing one year in office, a county 974
treasurer shall be required to take not less than twelve hours 975
annually of continuing education. The treasurer of state shall 976
determine the manner and content of the education programs in the 977
subject areas of investments, cash management, the collection of 978
taxes, ethics, and any other subject area that the treasurer of
state determines is reasonably related to the duties of the 979
office of the county treasurer. The auditor of state shall 981
determine the manner and content of the education programs in the 982
subject areas of governmental accounting, portfolio reporting and 983
compliance, office management, and any other subject area that
the auditor of state determines is reasonably related to the 984
duties of the office of the county treasurer. 985
(C) The auditor of state and the treasurer of state may 988
each charge counties a registration fee that will meet actual and 989
necessary expenses of the training of county treasurers, 990
including instructor fees, site acquisition costs, and the cost 991
of course materials. The necessary personal expenses of county 992
treasurers as a result of attending the training programs shall 993
be borne by the counties the treasurers represent. 994
(D) The auditor of state and the treasurer of state may 997
allow any other interested person to attend any of the education 998
programs that are held pursuant to this section, provided that 999
before attending any such education program, the interested 1,000
person shall pay to either the auditor of state or the treasurer 1,001
of state, as appropriate, the full registration fee set for the 1,002
education program.
(E) A county treasurer who fails to complete the initial 1,005
or continuing education programs required by this section without 1,006
a valid health-related excuse or other special hardship shall be
restricted to investing in the Ohio subdivision's fund pursuant 1,007
to division (A)(6) of section 135.35 of the Revised Code, IN 1,009
NO-LOAD MONEY MARKET MUTUAL FUNDS PURSUANT TO DIVISION (A)(5) OF 1,010
27
SECTION 135.35 OF THE REVISED CODE, or in time certificate of
deposits or deposit accounts pursuant to division (A)(3) of 1,012
section 135.35 of the Revised Code. A county treasurer who has 1,013
failed to complete the initial or continuing education programs
and invests in other than the investments permitted by this 1,014
division shall be subject to removal from office upon complaint 1,016
and investigation by the county prosecuting attorney, a hearing,
and a resolution adopted by the board of county commissioners 1,017
approving the removal from office. 1,018
(F)(1) There is hereby created in the state treasury the 1,021
county treasurer education fund, to be used by the treasurer of 1,022
state for actual and necessary expenses of education programs 1,024
held pursuant to this section. All registration fees collected 1,025
by the treasurer of state under this section shall be paid into 1,026
that fund.
(2) All registration fees collected by the auditor of 1,028
state under this section shall be paid into the auditor of state 1,029
training program fund established under section 117.44 of the 1,030
Revised Code.
(G) The treasurer of state, with the advice and consent of 1,033
the auditor of state, may adopt reasonable rules not inconsistent 1,034
with this section for the implementation of this section. 1,035
Section 2. That existing sections 135.14, 135.143, 135.22, 1,037
135.35, and 321.46 of the Revised Code are hereby repealed. 1,039