As Introduced

129th General Assembly Regular Session 2011-2012

S. B. No. 292

Senators Oelslager, Kearney 

Cosponsors: Senators Lehner, Brown, Cafaro, Sawyer, Schiavoni, Skindell, Tavares, Turner 

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A BILL

To amend sections 122.60, 122.71, 135.03, 135.032,

1

135.04, 135.06, 135.08, 135.10, 135.14, 135.144,

2

135.18, 135.32, 135.321, 135.33, 135.35, 135.353,

3

135.37, 135.51, 135.52, 135.53, 1733.04, 1733.041,

4

1733.24, 1733.30, 1733.31, 2909.32, and 2909.33

5

and to enact sections 135.011, 135.031, and

6

135.322 of the Revised Code to permit credit

7

unions and farm credit system institutions to

8

serve as public depositories under certain

9

circumstances and to participate in the Capital

10

Access Loan Program and the Small Business Loan

11

Guarantee Program.

12

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

Section 1. That sections 122.60, 122.71, 135.03, 135.032,	13
135.04, 135.06, 135.08, 135.10, 135.14, 135.144, 135.18, 135.32,	14
135.321, 135.33, 135.35, 135.353, 135.37, 135.51, 135.52, 135.53,	15
1733.04, 1733.041, 1733.24, 1733.30, 1733.31, 2909.32, and 2909.33	16
be amended and sections 135.011, 135.031, and 135.322 of the	17
Revised Code be enacted to read as follows:	18

Sec. 122.60.  As used in sections 122.60 to 122.605 of the	19
Revised Code:	20

(A) "Capital access loan" means a loan made by a	21
participating financial institution to an eligible business that	22
may be secured by a deposit of money from the fund into the	23
participating financial institution's program reserve account.	24

(B) "Department" means the department of development.

25

(C) "Eligible business" means a for-profit business entity,	26
or a nonprofit entity, that had total annual sales in its most	27
recently completed fiscal year of less than ten million dollars	28
and that has a principal place of for-profit business or nonprofit	29
entity activity within the state, the operation of which, alone or	30
in conjunction with other facilities, will create new jobs or	31
preserve existing jobs and employment opportunities and will	32
improve the economic welfare of the people of the state. As used	33
in this division, "new jobs" does not include existing jobs	34
transferred from another facility within the state, and "existing	35
jobs" means only existing jobs at facilities within the same	36
municipal corporation or township in which the project, activity,	37
or enterprise that is the subject of a capital access loan is	38
located.	39

(D) "Financial institution" means any bank, trust company,	40
savings bank, or savings and loan association, or credit union	41
that is chartered by and has a significant presence in the state,	42
or any national bank, federal savings and loan association, or	43
federal savings bank, or federal credit union that has a	44
significant presence in the state. "Financial institution" also	45
includes a farm credit system institution organized under the	46
federal "Farm Credit Act of 1971," 85 Stat. 583, 12 U.S.C. 2001,	47
as amended, that has a significant presence in the state.	48

(E) "Fund" means the capital access loan program fund.

49

(F) "Participating financial institution" means a financial	50
institution that has a valid, current participation agreement with	51
the department.	52

(G) "Participation agreement" means the agreement between a	53
financial institution and the department under which a financial	54
institution may participate in the program.	55

(H) "Passive real estate ownership" means the ownership of	56
real estate for the sole purpose of deriving income from it by	57
speculation, trade, or rental.	58

(I) "Program" means the capital access loan program created	59
under section 122.602 of the Revised Code.	60

(J) "Program reserve account" means a dedicated account at	61
each participating financial institution that is the property of	62
the state and may be used by the participating financial	63
institution only for the purpose of recovering a claim under	64
section 122.604 of the Revised Code arising from a default on a	65
loan made by the participating financial institution under the	66
program.	67

Sec. 122.71.  As used in sections 122.71 to 122.83 of the	68
Revised Code:	69

(A) "Financial institution" means any banking corporation,	70
trust company, insurance company, savings and loan association,	71
building and loan association, credit union, farm credit system	72
institution organized under the federal "Farm Credit Act of 1971,"	73
85 Stat. 583, 12 U.S.C. 2001, as amended, or corporation,	74
partnership, federal lending agency, foundation, or other	75
institution engaged in lending or investing funds for industrial	76
or business purposes.	77

(B) "Project" means any real or personal property connected	78
with or being a part of an industrial, distribution, commercial,	79
or research facility to be acquired, constructed, reconstructed,	80
enlarged, improved, furnished, or equipped, or any combination	81
thereof, with the aid provided under sections 122.71 to 122.83 of	82
the Revised Code, for industrial, commercial, distribution, and	83
research development of the state.	84

(C) "Mortgage" means the lien imposed on a project by a	85
mortgage on real property, or by financing statements on personal	86
property, or a combination of a mortgage and financing statements	87
when a project consists of both real and personal property.	88

(D) "Mortgagor" means the principal user of a project or the	89
person, corporation, partnership, or association unconditionally	90
guaranteeing performance by the principal user of its obligations	91
under the mortgage.	92

(E)(1) "Minority business enterprise" means an individual who	93
is a United States citizen and owns and controls a business, or a	94
partnership, corporation, or joint venture of any kind that is	95
owned and controlled by United States citizens, which citizen or	96
citizens are residents of this state and are members of one of the	97
following economically disadvantaged groups: Blacks or African	98
Americans, American Indians, Hispanics or Latinos, and Asians.	99

(2) "Owned and controlled" means that at least fifty-one per	100
cent of the business, including corporate stock if a corporation,	101
is owned by persons who belong to one or more of the groups set	102
forth in division (E)(1) of this section, and that those owners	103
have control over the management and day-to-day operations of the	104
business and an interest in the capital, assets, and profits and	105
losses of the business proportionate to their percentage of	106
ownership. In order to qualify as a minority business enterprise,	107
a business shall have been owned and controlled by those persons	108
at least one year prior to being awarded a contract pursuant to	109
this section.	110

(F) "Community improvement corporation" means a corporation	111
organized under Chapter 1724. of the Revised Code.	112

(G) "Ohio development corporation" means a corporation	113
organized under Chapter 1726. of the Revised Code.	114

(H) "Minority contractors business assistance organization"	115
means an entity engaged in the provision of management and	116
technical business assistance to minority business enterprise	117
entrepreneurs.	118

(I) "Minority business supplier development council" means a	119
nonprofit organization established as an affiliate of the national	120
minority supplier development council.	121

(J) "Regional economic development entity" means an entity	122
that is under contract with the director of development to	123
administer a loan program under this chapter in a particular area	124
of the state.	125

(K) "Community development corporation" means a corporation	126
organized under Chapter 1702. of the Revised Code that consists of	127
residents of the community and business and civic leaders and that	128
has as a principal purpose one or more of the following: the	129
revitalization and development of a low- to moderate-income	130
neighborhood or community; the creation of jobs for low- to	131
moderate-income residents; the development of commercial	132
facilities and services; providing training, technical assistance,	133
and financial assistance to small businesses; and planning,	134
developing, or managing low-income housing or other community	135
development activities.	136

Sec. 135.011.  As used in this chapter:

137

(A) "Certificate of deposit" includes a share certificate of	138
a credit union or farm credit system institution.	139

(B) "Farm credit system institution" means a farm credit	140
system institution organized under the federal "Farm Credit Act of	141
1971," 85 Stat. 583, 12 U.S.C. 2001, as amended.	142

Sec. 135.03. (A) Any national bank, any bank doing business	143
under authority granted by the superintendent of financial	144
institutions, or any bank doing business under authority granted	145
by the regulatory authority of another state of the United States,	146
located in this state, is eligible to become a public depository,	147
subject to sections 135.01 to 135.21 of the Revised Code. No bank	148
shall receive or have on deposit at any one time public moneys,	149
including public moneys as defined in section 135.31 of the	150
Revised Code, in an aggregate amount in excess of thirty per cent	151
of its total assets, as shown in its latest report to the	152
comptroller of the currency, the superintendent of financial	153
institutions, the federal deposit insurance corporation, or the	154
board of governors of the federal reserve system.	155

(B) Any federal savings association, any savings and loan	156
association or savings bank doing business under authority granted	157
by the superintendent of financial institutions, or any savings	158
and loan association or savings bank doing business under	159
authority granted by the regulatory authority of another state of	160
the United States, located in this state, and authorized to accept	161
deposits is eligible to become a public depository, subject to	162
sections 135.01 to 135.21 of the Revised Code. No savings	163
association, savings and loan association, or savings bank shall	164
receive or have on deposit at any one time public moneys,	165
including public moneys as defined in section 135.31 of the	166
Revised Code, in an aggregate amount in excess of thirty per cent	167
of its total assets, as shown in its latest report to the office	168
of thrift supervision, the superintendent of financial	169
institutions, the federal deposit insurance corporation, or the	170
board of governors of the federal reserve system.	171

(C) Any federal credit union, any foreign credit union	172
licensed pursuant to section 1733.39 of the Revised Code, or any	173
credit union as defined in section 1733.01 of the Revised Code,	174
located in this state, is eligible to become a public depository,	175
subject to sections 135.01 to 135.21 of the Revised Code. No	176
credit union shall receive or have on deposit at any one time	177
public moneys, including public moneys as defined in section	178
135.31 of the Revised Code, in an aggregate amount in excess of	179
thirty per cent of its total assets, as shown in its latest report	180
to the superintendent of financial institutions or the national	181
credit union administration.	182

(D) Any farm credit system institution that has a significant	183
presence in the state is eligible to become a public depository,	184
subject to sections 135.01 to 135.21 of the Revised Code. No farm	185
credit system institution shall receive or have on deposit at any	186
one time public moneys, including public moneys as defined in	187
section 135.31 of the Revised Code, in an aggregate amount in	188
excess of thirty per cent of its total assets, as shown in its	189
latest report to the federal farm credit administration.	190

Sec. 135.031.  (A) Except as otherwise provided in division	191
(B) of this section, an officer, employee, or agent of the state	192
or of a subdivision shall not deposit public moneys in a credit	193
union referred to in division (C) of section 135.03 of the Revised	194
Code, or a farm credit system institution referred to in division	195
(D) of that section, unless the funds are being placed with the	196
credit union or institution for purposes of a linked deposit	197
program established pursuant to this chapter and both of the	198
following conditions are met:	199

(1) The credit union or institution obtains insurance for the	200
protection of the deposit from the national credit union	201
association, a share guaranty corporation as defined in section	202
1761.01 of the Revised Code, or the farm credit system insurance	203
corporation, as applicable.	204

(2) The credit union or institution pledges securities for	205
the repayment of the deposit in accordance with section 135.18 of	206
the Revised Code.	207

(B) An officer, employee, or agent of a subdivision may	208
deposit public moneys in such a credit union or farm credit system	209
institution other than for purposes of a linked deposit program	210
established under this chapter if both of the following conditions	211
are met:	212

(1) The credit union or institution obtains insurance for the	213
protection of the deposit from the national credit union	214
association, a share guaranty corporation as defined in section	215
1761.01 of the Revised Code, or the farm credit system insurance	216
corporation, as applicable.	217

(2) The total amount the subdivision will have on deposit	218
with the credit union or institution does not exceed the amount	219
insured.	220

(C) Nothing in this section shall be construed as restricting	221
the participation of such a credit union or farm credit system	222
institution in the capital access loan program under sections	223
122.60 to 122.605 of the Revised Code.	224

Sec. 135.032.  No bank or, savings and loan association,	225
credit union, or farm credit system institution is eligible to	226
become a public depository or to receive any new public deposits	227
pursuant to sections 135.01 to 135.21 of the Revised Code, if:	228

(A) In the case of a bank, the bank or any of its directors,	229
officers, employees, or controlling shareholders is currently a	230
party to an active final or temporary cease-and-desist order	231
issued under section 1121.32 of the Revised Code;	232

(B) In the case of an association, the association or any of	233
its directors, officers, employees, or controlling persons is	234
currently a party to an active final or summary cease-and-desist	235
order issued under section 1155.02 of the Revised Code;	236

(C) In the case of a credit union, the credit union or any of	237
its regulated individuals as defined in section 1733.01 of the	238
Revised Code is currently a party to an active final or summary	239
cease-and-desist order issued under section 1733.324 of the	240
Revised Code;	241

(D) In the case of a farm credit system institution, the farm	242
credit institution or any of its directors, officers, employees,	243
agents, or other persons participating in the institution's	244
affairs is currently a party to an active final or temporary	245
cease-and-desist order issued by the federal farm credit	246
administration.	247

Sec. 135.04.  (A) Any institution mentioned in section 135.03	248
of the Revised Code is eligible to become a public depository of	249
the active deposits, inactive deposits, and interim deposits of	250
public moneys of the state subject to the requirements of sections	251
135.01 to 135.21 of the Revised Code.	252

(B) To facilitate the clearance of state warrants to the	253
state treasury, the state board of deposit may delegate the	254
authority to the treasurer of state to establish warrant clearance	255
accounts in any institution mentioned in section 135.03 of the	256
Revised Code located in areas where the volume of warrant	257
clearances justifies the establishment of an account as determined	258
by the treasurer of state. The balances maintained in such warrant	259
clearance accounts shall be at sufficient levels to cover the	260
activity generated by such accounts on an individual basis. Any	261
financial institution in the state that has a warrant clearance	262
account established by the treasurer of state shall, not more than	263
ten days after the close of each quarter, prepare and transmit to	264
the treasurer of state an analysis statement of such account for	265
the quarter then ended. Such statement shall contain such	266
information as determined by the state board of deposit, and this	267
information shall be used in whole or in part by the treasurer of	268
state in determining the level of balances to be maintained in	269
such accounts.	270

(C) Each governing board shall award the active deposits of	271
public moneys subject to its control to the eligible institutions	272
in accordance with this section, except that no such public	273
depository shall thereby be required to take or permitted to	274
receive and have at any one time a greater amount of active	275
deposits of such public moneys than that specified in the	276
application of such depository. When, by reason of such limitation	277
or otherwise, the amount of active public moneys deposited or to	278
be deposited in a public depository, pursuant to an award made	279
under this section, is reduced or withdrawn, as the case requires,	280
the amount of such reduction or the sum so withdrawn shall be	281
deposited in another eligible institution applying therefor, or if	282
there is no such eligible institution, then the amount so withheld	283
or withdrawn shall be awarded or deposited for the remainder of	284
the period of designation in accordance with sections 135.01 to	285
135.21 of the Revised Code.	286

(D) Any institution mentioned in section 135.03 of the	287
Revised Code is eligible to become a public depository of the	288
inactive and interim deposits of public moneys of a subdivision.	289
In case the aggregate amount of inactive or interim deposits	290
applied for by such eligible institutions is less than the	291
aggregate maximum amount of such inactive or interim deposits as	292
estimated to be deposited pursuant to sections 135.01 to 135.21 of	293
the Revised Code, the governing board of the subdivision may	294
designate as a public depository of the inactive or interim	295
deposits of the public moneys thereof, one or more institutions of	296
a kind mentioned in section 135.03 of the Revised Code, subject to	297
the requirements of sections 135.01 to 135.21 of the Revised Code.	298

(E) Any institution mentioned in section 135.03 of the	299
Revised Code is eligible to become a public depository of the	300
active deposits of public moneys of a subdivision. In case the	301
aggregate amount of active deposits of the public moneys of the	302
subdivision applied for by such eligible institutions is less than	303
the aggregate maximum amount to be deposited as such, as estimated	304
by the governing board, said board may designate as a public	305
depository of the active deposits of the public moneys of the	306
subdivision, one or more institutions of the kind mentioned in	307
section 135.03 of the Revised Code, subject to the requirements of	308
sections 135.01 to 135.21 of the Revised Code.	309

(F)(1) The governing board of the state or of a subdivision	310
may designate one or more minority banks or minority credit unions	311
as public depositories of its inactive, interim, or active	312
deposits of public moneys designated as federal funds. Except for	313
section 135.18 or 135.181 of the Revised Code, Chapter 135. of the	314
Revised Codethis chapter does not apply to the application for,	315
or the award of, such deposits. As used in this division,	316
"minority bank" or "minority credit union" means, as applicable, a	317
bank or credit union operating in this state that is owned or	318
controlled by one or more socially or economically disadvantaged	319
persons. Such disadvantage may arise from cultural, ethnic, or	320
racial background, chronic economic circumstances, or other	321
similar cause. Such persons include, but are not limited to,	322
Afro-Americans, Puerto Ricans, Spanish-speaking Americans, and	323
American Indians.	324

(2) In enacting this division, the general assembly finds	325
that:	326

(a) Certain commercial banks and credit unions are owned or	327
controlled by minority Americans;	328

(b) Minority banks and minority credit unions are an	329
important source of banking services in their communities;	330

(c) Minority banks and minority credit unions have been	331
unsuccessful in competing under Chapter 135. of the Revised Code	332
this chapter for the award of federal funds;	333

(d) This division contains safeguards for the protection of	334
the general public and the banking industry, since it provides the	335
governing board of the state or political subdivision with	336
permissive authority in the award of deposits; limits the	337
authority of the governing board to the award of federal funds;	338
and subjects minority banks and minority credit unions to certain	339
limitations of Chapter 135. of the Revised Codethis chapter,	340
including the requirement that, as in the case of every financial	341
institution subject to Chapter 135. of the Revised Codethis	342
chapter, a minority bank or minority credit union pledge certain	343
securities for repayment of the deposits.	344

(3) The purpose of this division is to recognize that the	345
state has a substantial and compelling interest in encouraging the	346
establishment, development, and stability of minority banks and	347
minority credit unions by facilitating their access to the award	348
of federal funds, while ensuring the protection of the general	349
public and the banking industry.	350

(G) The governing board of a subdivision shall award the	351
first twenty-five thousand dollars of the active deposits of	352
public moneys subject to its control to the eligible institution	353
or institutions applying or qualifying therefor on the basis of	354
the operating needs of the subdivision and shall award the active	355
deposits of public moneys subject to its control in excess of	356
twenty-five thousand dollars to the eligible institution or	357
institutions applying or qualifying therefor.	358

Sec. 135.06.  Each eligible institution desiring to be a	359
public depository of the inactive deposits of the public moneys of	360
the state or of the inactive deposits of the public moneys of the	361
subdivision shall, not more than thirty days prior to the date	362
fixed by section 135.12 of the Revised Code for the designation of	363
such public depositories, make application therefor in writing to	364
the proper governing board. Such application shall specify the	365
maximum amount of such public moneys which the applicant desires	366
to receive and have on deposit as an inactive deposit at any one	367
time during the period covered by the designation, provided that	368
it shall not apply for more than thirty per cent of its total	369
assets as revealed by its latest report to the superintendent of	370
financial institutions, the comptroller of the currency, the	371
office of thrift supervision, the federal deposit insurance	372
corporation, or the board of governors of the federal reserve	373
system, the national credit union administration, or the federal	374
farm credit administration, and the rate of interest which the	375
applicant will pay thereon, subject to the limitations of sections	376
135.01 to 135.21 of the Revised Code. Each application shall be	377
accompanied by a financial statement of the applicant, under oath	378
of its cashier, treasurer, or other officer, in such detail as to	379
show the capital funds of the applicant, as of the date of its	380
latest report to the superintendent of financial institutions, the	381
comptroller of the currency, the office of thrift supervision, the	382
federal deposit insurance corporation, or the board of governors	383
of the federal reserve system, the national credit union	384
administration, or the federal farm credit administration, and	385
adjusted to show any changes therein made prior to the date of the	386
application. Such application may be combined with an application	387
for designation as a public depository of active deposits, interim	388
deposits, or both.	389

Sec. 135.08.  Each eligible institution desiring to be a	390
public depository of interim deposits of the public moneys of the	391
state or of the interim deposits of the public moneys of the	392
subdivision shall, not more than thirty days prior to the date	393
fixed by section 135.12 of the Revised Code for the designation of	394
public depositories, make application therefor in writing to the	395
proper governing board. Such application shall specify the maximum	396
amount of such public moneys which the applicant desires to	397
receive and have on deposit as interim deposits at any one time	398
during the period covered by the designation, provided that it	399
shall not apply for more than thirty per cent of its total assets	400
as revealed by its latest report to the superintendent of	401
financial institutions, the comptroller of the currency, the	402
office of thrift supervision, the federal deposit insurance	403
corporation, or the board of governors of the federal reserve	404
system, the national credit union administration, or the federal	405
farm credit administration, and the rate of interest which the	406
applicant will pay thereon, subject to the limitations of sections	407
135.01 to 135.21 of the Revised Code.	408

Each application shall be accompanied by a financial	409
statement of the applicant, under oath of its cashier, treasurer,	410
or other officer, in such detail as to show the capital funds of	411
the applicant, as of the date of its latest report to the	412
superintendent of financial institutions, the comptroller of the	413
currency, the office of thrift supervision, the federal deposit	414
insurance corporation, or the board of governors of the federal	415
reserve system, the national credit union administration, or the	416
federal farm credit administration, and adjusted to show any	417
changes therein made prior to the date of the application. Such	418
application may be combined with an application for designation as	419
a public depository of inactive deposits, active deposits, or	420
both.	421

Sec. 135.10.  Each eligible institution desiring to be a	422
public depository of the active deposits of the public moneys of	423
the state or of a subdivision shall, not more than thirty days	424
prior to the date fixed by section 135.12 of the Revised Code for	425
the designation of such public depositories, make application	426
therefortherefore in writing to the proper governing board. If	427
desired, such application may specify the maximum amount of such	428
public moneys which the applicant desires to receive and have on	429
deposit at any one time during the period covered by the	430
designation. Each application shall be accompanied by a financial	431
statement of the applicant, under oath of its cashier, treasurer,	432
or other officer, in such detail as to show the capital funds of	433
the applicant, as of the date of its latest report to the	434
superintendent of banks orfinancial institutions, the	435
comptroller of the currency, the office of thrift supervision, the	436
national credit union administration, or the federal farm credit	437
administration, and adjusted to show any changes therein prior to	438
the date of the application. Such application may be combined with	439
an application for designation as a public depository of inactive	440
deposits, interim deposits, or both.	441

Sec. 135.14.  (A) As used in this section:

442

(1) "Treasurer" does not include the treasurer of state, and	443
"governing board" does not include the state board of deposit.	444

(2) "Other obligations" includes notes whether or not issued	445
in anticipation of the issuance of bonds.	446

(B) The treasurer or governing board may invest or deposit	447
any part or all of the interim moneys. The following	448
classifications of obligations shall be eligible for such	449
investment or deposit:	450

(1) United States treasury bills, notes, bonds, or any other	451
obligation or security issued by the United States treasury or any	452
other obligation guaranteed as to principal and interest by the	453
United States.	454

Nothing in the classification of eligible obligations set	455
forth in division (B)(1) of this section or in the classifications	456
of eligible obligations set forth in divisions (B)(2) to (7) of	457
this section shall be construed to authorize any investment in	458
stripped principal or interest obligations of such eligible	459
obligations.	460

(2) Bonds, notes, debentures, or any other obligations or	461
securities issued by any federal government agency or	462
instrumentality, including but not limited to, the federal	463
national mortgage association, federal home loan bank, federal	464
farm credit bank, federal home loan mortgage corporation,	465
government national mortgage association, and student loan	466
marketing association. All federal agency securities shall be	467
direct issuances of federal government agencies or	468
instrumentalities.	469

(3) Interim deposits in the eligible institutions applying	470
for interim moneys as provided in section 135.08 of the Revised	471
Code. The award of interim deposits shall be made in accordance	472
with section 135.09 of the Revised Code and the treasurer or the	473
governing board shall determine the periods for which such interim	474
deposits are to be made and shall award such interim deposits for	475
such periods, provided that any eligible institution receiving an	476
interim deposit award may, upon notification that the award has	477
been made, decline to accept the interim deposit in which event	478
the award shall be made as though the institution had not applied	479
for such interim deposit.	480

(4) Bonds and other obligations of this state;

481

(5) No-load money market mutual funds consisting exclusively	482
of obligations described in division (B)(1) or (2) of this section	483
and repurchase agreements secured by such obligations, provided	484
that investments in securities described in this division are made	485
only through eligible institutions mentioned in section 135.03 of	486
the Revised Code;	487

(6) The Ohio subdivision's fund as provided in section 135.45	488
of the Revised Code;	489

(7) Up to twenty-five per cent of interim moneys available	490
for investment in either of the following:	491

(a) Commercial paper notes issued by an entity that is	492
defined in division (D) of section 1705.01 of the Revised Code and	493
that has assets exceeding five hundred million dollars, to which	494
notes all of the following apply:	495

(i) The notes are rated at the time of purchase in the	496
highest classification established by at least two nationally	497
recognized standard rating services.	498

(ii) The aggregate value of the notes does not exceed ten per	499
cent of the aggregate value of the outstanding commercial paper of	500
the issuing corporation.	501

(iii) The notes mature not later than one hundred eighty days	502
after purchase.	503

(b) Bankers acceptances of banks that are insured by the	504
federal deposit insurance corporation and to which both of the	505
following apply:	506

(i) The obligations are eligible for purchase by the federal	507
reserve system.	508

(ii) The obligations mature not later than one hundred eighty	509
days after purchase.	510

No investment shall be made pursuant to division (B)(7) of	511
this section unless the treasurer or governing board has completed	512
additional training for making the investments authorized by	513
division (B)(7) of this section. The type and amount of additional	514
training shall be approved by the auditor of state and may be	515
conducted by or provided under the supervision of the auditor of	516
state.	517

(C) Nothing in the classifications of eligible obligations	518
set forth in divisions (B)(1) to (7) of this section shall be	519
construed to authorize any investment in a derivative, and no	520
treasurer or governing board shall invest in a derivative. For	521
purposes of this division, "derivative" means a financial	522
instrument or contract or obligation whose value or return is	523
based upon or linked to another asset or index, or both, separate	524
from the financial instrument, contract, or obligation itself. Any	525
security, obligation, trust account, or other instrument that is	526
created from an issue of the United States treasury or is created	527
from an obligation of a federal agency or instrumentality or is	528
created from both is considered a derivative instrument. An	529
eligible investment described in this section with a variable	530
interest rate payment, based upon a single interest payment or	531
single index comprised of other eligible investments provided for	532
in division (B)(1) or (2) of this section, is not a derivative,	533
provided that such variable rate investment has a maximum maturity	534
of two years.	535

(D) Except as provided in division (E) of this section, any	536
investment made pursuant to this section must mature within five	537
years from the date of settlement, unless the investment is	538
matched to a specific obligation or debt of the subdivision.	539

(E) The treasurer or governing board may also enter into a	540
written repurchase agreement with any eligible institution	541
mentioned in section 135.03 of the Revised Code or any eligible	542
dealer pursuant to division (M) of this section, under the terms	543
of which agreement the treasurer or governing board purchases, and	544
such institution or dealer agrees unconditionally to repurchase	545
any of the securities listed in divisions (B)(1) to (5), except	546
letters of credit described in division (B)(2), of section 135.18	547
of the Revised Code. The market value of securities subject to an	548
overnight written repurchase agreement must exceed the principal	549
value of the overnight written repurchase agreement by at least	550
two per cent. A written repurchase agreement shall not exceed	551
thirty days and the market value of securities subject to a	552
written repurchase agreement must exceed the principal value of	553
the written repurchase agreement by at least two per cent and be	554
marked to market daily. All securities purchased pursuant to this	555
division shall be delivered into the custody of the treasurer or	556
governing board or an agent designated by the treasurer or	557
governing board. A written repurchase agreement with an eligible	558
securities dealer shall be transacted on a delivery versus payment	559
basis. The agreement shall contain the requirement that for each	560
transaction pursuant to the agreement the participating	561
institution or dealer shall provide all of the following	562
information:	563

(1) The par value of the securities;

564

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

565

(3) A numerical identifier generally accepted in the	566
securities industry that designates the securities.	567

No treasurer or governing board shall enter into a written	568
repurchase agreement under the terms of which the treasurer or	569
governing board agrees to sell securities owned by the subdivision	570
to a purchaser and agrees with that purchaser to unconditionally	571
repurchase those securities.	572

(F) No treasurer or governing board shall make an investment	573
under this section, unless the treasurer or governing board, at	574
the time of making the investment, reasonably expects that the	575
investment can be held until its maturity.	576

(G) No treasurer or governing board shall pay interim moneys	577
into a fund established by another subdivision, treasurer,	578
governing board, or investing authority, if that fund was	579
established for the purpose of investing the public moneys of	580
other subdivisions. This division does not apply to the payment of	581
public moneys into either of the following:	582

(1) The Ohio subdivision's fund pursuant to division (B)(6)	583
of this section;	584

(2) A fund created solely for the purpose of acquiring,	585
constructing, owning, leasing, or operating municipal utilities	586
pursuant to the authority provided under section 715.02 of the	587
Revised Code or Section 4 of Article XVIII, Ohio Constitution.	588

For purposes of division (G) of this section, "subdivision"	589
includes a county.	590

(H) The use of leverage, in which the treasurer or governing	591
board uses its current investment assets as collateral for the	592
purpose of purchasing other assets, is prohibited. The issuance of	593
taxable notes for the purpose of arbitrage is prohibited.	594
Contracting to sell securities that have not yet been acquired by	595
the treasurer or governing board, for the purpose of purchasing	596
such securities on the speculation that bond prices will decline,	597
is prohibited.	598

(I) Whenever, during a period of designation, the treasurer	599
classifies public moneys as interim moneys, the treasurer shall	600
notify the governing board of such action. The notification shall	601
be given within thirty days after such classification and in the	602
event the governing board does not concur in such classification	603
or in the investments or deposits made under this section, the	604
governing board may order the treasurer to sell or liquidate any	605
of such investments or deposits, and any such order shall	606
specifically describe the investments or deposits and fix the date	607
upon which they are to be sold or liquidated. Investments or	608
deposits so ordered to be sold or liquidated shall be sold or	609
liquidated for cash by the treasurer on the date fixed in such	610
order at the then current market price. Neither the treasurer nor	611
the members of the board shall be held accountable for any loss	612
occasioned by sales or liquidations of investments or deposits at	613
prices lower than their cost. Any loss or expense incurred in	614
making such sales or liquidations is payable as other expenses of	615
the treasurer's office.	616

(J) If any investments or deposits purchased under the	617
authority of this section are issuable to a designated payee or to	618
the order of a designated payee, the name of the treasurer and the	619
title of the treasurer's office shall be so designated. If any	620
such securities are registrable either as to principal or	621
interest, or both, then such securities shall be registered in the	622
name of the treasurer as such.	623

(K) The treasurer is responsible for the safekeeping of all	624
documents evidencing a deposit or investment acquired by the	625
treasurer under this section. Any securities may be deposited for	626
safekeeping with a qualified trustee as provided in section 135.18	627
of the Revised Code, except the delivery of securities acquired	628
under any repurchase agreement under this section shall be made to	629
a qualified trustee, provided, however, that the qualified trustee	630
shall be required to report to the treasurer, governing board,	631
auditor of state, or an authorized outside auditor at any time	632
upon request as to the identity, market value, and location of the	633
document evidencing each security, and that if the participating	634
institution is a designated depository of the subdivision for the	635
current period of designation, the securities that are the subject	636
of the repurchase agreement may be delivered to the treasurer or	637
held in trust by the participating institution on behalf of the	638
subdivision. Interest earned on any investments or deposits	639
authorized by this section shall be collected by the treasurer and	640
credited by the treasurer to the proper fund of the subdivision.	641

Upon the expiration of the term of office of a treasurer or	642
in the event of a vacancy in the office of treasurer by reason of	643
death, resignation, removal from office, or otherwise, the	644
treasurer or the treasurer's legal representative shall transfer	645
and deliver to the treasurer's successor all documents evidencing	646
a deposit or investment held by the treasurer. For the investments	647
and deposits so transferred and delivered, such treasurer shall be	648
credited with and the treasurer's successor shall be charged with	649
the amount of money held in such investments and deposits.	650

(L) Whenever investments or deposits acquired under this	651
section mature and become due and payable, the treasurer shall	652
present them for payment according to their tenor, and shall	653
collect the moneys payable thereon. The moneys so collected shall	654
be treated as public moneys subject to sections 135.01 to 135.21	655
of the Revised Code.	656

(M)(1) All investments, except for investments in securities	657
described in divisions (B)(5) and (6) of this section and for	658
investments by a municipal corporation in the issues of such	659
municipal corporation, shall be made only through a member of the	660
national association of securities dealers, through a bank,	661
savings bank, or savings and loan association, or credit union	662
regulated by the superintendent of financial institutions, or	663
through an institution regulated by the comptroller of the	664
currency, the federal deposit insurance corporation, orthe board	665
of governors of the federal reserve system, the national credit	666
union administration, or the federal farm credit administration.	667

(2) Payment for investments shall be made only upon the	668
delivery of securities representing such investments to the	669
treasurer, governing board, or qualified trustee. If the	670
securities transferred are not represented by a certificate,	671
payment shall be made only upon receipt of confirmation of	672
transfer from the custodian by the treasurer, governing board, or	673
qualified trustee.	674

(N) In making investments authorized by this section, a	675
treasurer or governing board may retain the services of an	676
investment advisor, provided the advisor is licensed by the	677
division of securities under section 1707.141 of the Revised Code	678
or is registered with the securities and exchange commission, and	679
possesses experience in public funds investment management,	680
specifically in the area of state and local government investment	681
portfolios, or the advisor is an eligible institution mentioned in	682
section 135.03 of the Revised Code.	683

(O)(1) Except as otherwise provided in divisions (O)(2) and	684
(3) of this section, no treasurer or governing board shall make an	685
investment or deposit under this section, unless there is on file	686
with the auditor of state a written investment policy approved by	687
the treasurer or governing board. The policy shall require that	688
all entities conducting investment business with the treasurer or	689
governing board shall sign the investment policy of that	690
subdivision. All brokers, dealers, and financial institutions,	691
described in division (M)(1) of this section, initiating	692
transactions with the treasurer or governing board by giving	693
advice or making investment recommendations shall sign the	694
treasurer's or governing board's investment policy thereby	695
acknowledging their agreement to abide by the policy's contents.	696
All brokers, dealers, and financial institutions, described in	697
division (M)(1) of this section, executing transactions initiated	698
by the treasurer or governing board, having read the policy's	699
contents, shall sign the investment policy thereby acknowledging	700
their comprehension and receipt.	701

(2) If a written investment policy described in division	702
(O)(1) of this section is not filed on behalf of the subdivision	703
with the auditor of state, the treasurer or governing board of	704
that subdivision shall invest the subdivision's interim moneys	705
only in interim deposits pursuant to division (B)(3) of this	706
section, no-load money market mutual funds pursuant to division	707
(B)(5) of this section, or the Ohio subdivision's fund pursuant to	708
division (B)(6) of this section.	709

(3) Divisions (O)(1) and (2) of this section do not apply to	710
a treasurer or governing board of a subdivision whose average	711
annual portfolio of investments held pursuant to this section is	712
one hundred thousand dollars or less, provided that the treasurer	713
or governing board certifies, on a form prescribed by the auditor	714
of state, that the treasurer or governing board will comply and is	715
in compliance with the provisions of sections 135.01 to 135.21 of	716
the Revised Code.	717

(P) A treasurer or governing board may enter into a written	718
investment or deposit agreement that includes a provision under	719
which the parties agree to submit to nonbinding arbitration to	720
settle any controversy that may arise out of the agreement,	721
including any controversy pertaining to losses of public moneys	722
resulting from investment or deposit. The arbitration provision	723
shall be set forth entirely in the agreement, and the agreement	724
shall include a conspicuous notice to the parties that any party	725
to the arbitration may apply to the court of common pleas of the	726
county in which the arbitration was held for an order to vacate,	727
modify, or correct the award. Any such party may also apply to the	728
court for an order to change venue to a court of common pleas	729
located more than one hundred miles from the county in which the	730
treasurer or governing board is located.	731

For purposes of this division, "investment or deposit	732
agreement" means any agreement between a treasurer or governing	733
board and a person, under which agreement the person agrees to	734
invest, deposit, or otherwise manage a subdivision's interim	735
moneys on behalf of the treasurer or governing board, or agrees to	736
provide investment advice to the treasurer or governing board.	737

(Q) An investment made by the treasurer or governing board	738
pursuant to this section prior to September 27, 1996, that was a	739
legal investment under the law as it existed before September 27,	740
1996, may be held until maturity, or if the investment does not	741
have a maturity date, it may be held until five years from	742
September 27, 1996, regardless of whether the investment would	743
qualify as a legal investment under the terms of this section as	744
amended.	745

Sec. 135.144.  (A) In addition to the authority provided in	746
section 135.14 or 135.143 of the Revised Code, the treasurer of	747
state or the treasurer or governing board of a political	748
subdivision may invest interim moneys in certificates of deposit	749
in accordance with all of the following:	750

(1) The interim moneys initially are deposited with an	751
eligible public depository described in section 135.03 of the	752
Revised Code and selected, pursuant to section 135.12 of the	753
Revised Code, by the treasurer of state or the treasurer or	754
governing board of a political subdivision, for interim moneys of	755
the state or of the political subdivision.	756

(2) For the treasurer of state or the treasurer or governing	757
board of the political subdivision depositing the interim moneys	758
pursuant to division (A)(1) of this section, the eligible public	759
depository selected pursuant to that division invests the interim	760
moneys in certificates of deposit of one or more federally insured	761
banks, savings banks, or savings and loan associations, credit	762
unions insured pursuant to section 1733.041 of the Revised Code,	763
or farm credit system institutions, wherever located. The full	764
amount of principal and any accrued interest of each certificate	765
of deposit invested in pursuant to division (A)(2) of this section	766
shall be insured by federal deposit insurance, by the national	767
credit union administration or a share guaranty corporation as	768
defined in section 1761.01 of the Revised Code, or by the farm	769
credit system insurance corporation, as applicable.	770

(3) For the treasurer of state or the treasurer or governing	771
board of the political subdivision depositing the interim moneys	772
pursuant to division (A)(1) of this section, the eligible public	773
depository selected pursuant to that division acts as custodian of	774
the certificates of deposit described in division (A)(2) of this	775
section.	776

(4) On the same date the public moneys are redeposited by the	777
public depository, the public depository may, in its sole	778
discretion, choose whether to receive deposits, in any amount,	779
from other banks, savings banks, or savings and loan associations.	780

(5) The public depository provides to the treasurer of state	781
or the treasurer or governing board of a political subdivision a	782
monthly account statement that includes the amount of its funds	783
deposited and held at each bank, savings bank, or savings and loan	784
association, credit union, or farm credit system institution for	785
which the public depository acts as a custodian pursuant to this	786
section.	787

(B) Interim moneys deposited or invested in accordance with	788
division (A) of this section are not subject to any pledging	789
requirements described in section 135.18 or 135.181 of the Revised	790
Code.	791

Sec. 135.18.  (A) The treasurer, before making the initial	792
deposit in a public depository pursuant to an award made under	793
sections 135.01 to 135.21 of the Revised Code, except as provided	794
in section 135.144 or 135.145 of the Revised Code, shall require	795
the institution designated as a public depository to pledge to and	796
deposit with the treasurer, as security for the repayment of all	797
public moneys to be deposited in the public depository during the	798
period of designation pursuant to the award, eligible securities	799
of aggregate market value equal to the excess of the amount of	800
public moneys to be at the time so deposited, over and above the	801
portion or amount of such moneys as is at that time insured by the	802
federal deposit insurance corporation or by, any other agency or	803
instrumentality of the federal government, a credit union share	804
guaranty corporation as defined in section 1761.01 of the Revised	805
Code, or the farm credit system insurance corporation. In the case	806
of any deposit other than the initial deposit made during the	807
period of designation, the amount of the aggregate market value of	808
securities required to be pledged and deposited shall be equal to	809
the difference between the amount of public moneys on deposit in	810
such public depository plus the amount to be so deposited, minus	811
the portion or amount of the aggregate as is at the time insured	812
as provided in this section. The treasurer may require additional	813
eligible securities to be deposited to provide for any	814
depreciation which may occur in the market value of any of the	815
securities so deposited.	816

(B) The following securities shall be eligible for the	817
purposes of this section:	818

(1) Bonds, notes, or other obligations of the United States;	819
or bonds, notes, or other obligations guaranteed as to principal	820
and interest by the United States or those for which the faith of	821
the United States is pledged for the payment of principal and	822
interest thereon, by language appearing in the instrument	823
specifically providing such guarantee or pledge and not merely by	824
interpretation or otherwise;	825

(2) Bonds, notes, debentures, letters of credit, or other	826
obligations or securities issued by any federal government agency	827
or instrumentality, or the export-import bank of Washington;	828
bonds, notes, or other obligations guaranteed as to principal and	829
interest by the United States or those for which the faith of the	830
United States is pledged for the payment of principal and interest	831
thereon, by interpretation or otherwise and not by language	832
appearing in the instrument specifically providing such guarantee	833
or pledge;	834

(3) Obligations of or fully insured or fully guaranteed by	835
the United States or any federal government agency or	836
instrumentality;	837

(4) Obligations partially insured or partially guaranteed by	838
any federal agency or instrumentality;	839

(5) Obligations of or fully guaranteed by the federal	840
national mortgage association, federal home loan mortgage	841
corporation, federal farm credit bank, or student loan marketing	842
association;	843

(6) Bonds and other obligations of this state;

844

(7) Bonds and other obligations of any county, township,	845
school district, municipal corporation, or other legally	846
constituted taxing subdivision of this state, which is not at the	847
time of such deposit, in default in the payment of principal or	848
interest on any of its bonds or other obligations, for which the	849
full faith and credit of the issuing subdivision is pledged;	850

(8) Bonds of other states of the United States which have not	851
during the ten years immediately preceding the time of such	852
deposit defaulted in payments of either interest or principal on	853
any of their bonds;	854

(9) Shares of no-load money market mutual funds consisting	855
exclusively of obligations described in division (B)(1) or (2) of	856
this section and repurchase agreements secured by such	857
obligations;	858

(10) A surety bond issued by a corporate surety licensed by	859
the state and authorized to issue surety bonds in this state	860
pursuant to Chapter 3929. of the Revised Code, and qualified to	861
provide surety bonds to the federal government pursuant to 96	862
Stat. 1047 (1982), 31 U.S.C.A. 9304;	863

(11) Bonds or other obligations of any county, municipal	864
corporation, or other legally constituted taxing subdivision of	865
another state of the United States, or of any instrumentality of	866
such county, municipal corporation, or other taxing subdivision,	867
for which the full faith and credit of the issuer is pledged and,	868
at the time of purchase of the bonds or other obligations, rated	869
in one of the two highest categories by at least one nationally	870
recognized standard rating service.	871

(C) If the public depository fails to pay over any part of	872
the public deposit made therein as provided by law, the treasurer	873
shall sell at public sale any of the bonds or other securities	874
deposited with the treasurer pursuant to this section or section	875
131.09 of the Revised Code, or shall draw on any letter of credit	876
to the extent of the failure to pay. Thirty days' notice of the	877
sale shall be given in a newspaper of general circulation at	878
Columbus, in the case of the treasurer of state, and at the county	879
seat of the county in which the office of the treasurer is	880
located, in the case of any other treasurer. When a sale of bonds	881
or other securities has been so made and upon payment to the	882
treasurer of the purchase money, the treasurer shall transfer such	883
bonds or securities whereupon the absolute ownership of such bonds	884
or securities shall pass to the purchasers. Any surplus remaining	885
after deducting the amount due the state or subdivision and	886
expenses of sale shall be paid to the public depository.	887

(D) An institution designated as a public depository may, by	888
written notice to the treasurer, designate a qualified trustee and	889
deposit the eligible securities required by this section with the	890
trustee for safekeeping for the account of the treasurer and the	891
institution as a public depository, as their respective rights to	892
and interests in such securities under this section may appear and	893
be asserted by written notice to or demand upon the trustee. In	894
which case, the treasurer shall accept the written receipt of the	895
trustee describing the securities that have been deposited with	896
the trustee by the public depository, a copy of which shall also	897
be delivered to the public depository. Thereupon all securities so	898
deposited with the trustee are deemed to be pledged with the	899
treasurer and to be deposited with the treasurer, for all the	900
purposes of this section.	901

(E) The governing board may make provisions for the exchange	902
and release of securities and the substitution of other eligible	903
securities therefor except where the public depository has	904
deposited eligible securities with a trustee for safekeeping as	905
provided in this section.	906

(F) When the public depository has deposited eligible	907
securities described in division (B)(1) of this section with a	908
trustee for safekeeping, the public depository may at any time	909
substitute or exchange eligible securities described in division	910
(B)(1) of this section having a current market value equal to or	911
greater than the current market value of the securities then on	912
deposit and for which they are to be substituted or exchanged,	913
without specific authorization from any governing board, boards,	914
or treasurer of any such substitution or exchange.	915

(G) When the public depository has deposited eligible	916
securities described in divisions (B)(2) to (9) of this section	917
with a trustee for safekeeping, the public depository may at any	918
time substitute or exchange eligible securities having a current	919
market value equal to or greater than the current market value of	920
the securities then on deposit and for which they are to be	921
substituted or exchanged without specific authorization of any	922
governing board, boards, or treasurer of any such substitution or	923
exchange only if:	924

(1) The treasurer has authorized the public depository to	925
make such substitution or exchange on a continuing basis during a	926
specified period without prior approval of each substitution or	927
exchange. The authorization may be effected by the treasurer	928
sending to the trustee a written notice stating that substitution	929
may be effected on a continuing basis during a specified period	930
which shall not extend beyond the end of the period of designation	931
during which the notice is given. The trustee may rely upon this	932
notice and upon the period of authorization stated therein and	933
upon the period of designation stated therein.	934

(2) No continuing authorization for substitution has been	935
given by the treasurer, the public depository notifies the	936
treasurer and the trustee of an intended substitution or exchange,	937
and the treasurer fails to object to the trustee as to the	938
eligibility or market value of the securities being substituted	939
within ten calendar days after the date appearing on the notice of	940
proposed substitution. The notice to the treasurer and to the	941
trustee shall be given in writing and delivered personally or by	942
certified or registered mail with a return receipt requested. The	943
trustee may assume in any case that the notice has been delivered	944
to the treasurer. In order for objections of the treasurer to be	945
effective, receipt of the objections must be acknowledged in	946
writing by the trustee.	947

(3) The treasurer gives written authorization for a	948
substitution or exchange of specific securities.	949

(H) The public depository shall notify any governing board,	950
boards, or treasurer of any substitution or exchange under	951
division (G)(1) or (2) of this section. Upon request from the	952
treasurer, the trustee shall furnish a statement of the securities	953
pledged against such public deposits.	954

(I) Any federal reserve bank or branch thereof located in	955
this state or federal home loan bank, without compliance with	956
Chapter 1111. of the Revised Code and without becoming subject to	957
any other law of this state relative to the exercise by	958
corporations of trust powers generally, is qualified to act as	959
trustee for the safekeeping of securities, under this section. Any	960
institution mentioned in section 135.03 of the Revised Code that	961
holds a certificate of qualification issued by the superintendent	962
of financial institutions or any institution complying with	963
sections 1111.04, 1111.05, and 1111.06 of the Revised Code, is	964
qualified to act as trustee for the safekeeping of securities,	965
other than those belonging to itself, under this section. Upon	966
application to the superintendent in writing by an institution,	967
the superintendent shall investigate the applicant and ascertain	968
whether or not it has been authorized to execute and accept trusts	969
in this state and has safe and adequate vaults and efficient	970
supervision thereof for the storage and safekeeping within this	971
state of securities. If the superintendent finds that the	972
applicant has been so authorized and has such vaults and	973
supervision thereof, the superintendent shall approve the	974
application and issue a certificate to that effect, the original	975
or any certified copy of which shall be conclusive evidence that	976
the institution therein named is qualified to act as trustee for	977
the purposes of this section with respect to securities other than	978
those belonging to itself.	979

Notwithstanding the fact that a public depository is required	980
to pledge eligible securities in certain amounts to secure	981
deposits of public moneys, a trustee has no duty or obligation to	982
determine the eligibility, market value, or face value of any	983
securities deposited with the trustee by a public depository. This	984
applies in all situations including, without limitation, a	985
substitution or exchange of securities.	986

Any charges or compensation of a designated trustee for	987
acting as such under this section shall be paid by the public	988
depository and in no event shall be chargeable to the state or the	989
subdivision or to the treasurer or to any officer of the state or	990
subdivision. The charges or compensation shall not be a lien or	991
charge upon the securities deposited for safekeeping prior or	992
superior to the rights to and interests in the securities of the	993
state or the subdivision or of the treasurer. The treasurer and	994
the treasurer's bonders or surety shall be relieved from any	995
liability to the state or the subdivision or to the public	996
depository for the loss or destruction of any securities deposited	997
with a qualified trustee pursuant to this section.	998

Sec. 135.32.  (A) Any national bank, any bank doing business	999
under authority granted by the superintendent of financial	1000
institutions, or any bank doing business under authority granted	1001
by the regulatory authority of another state of the United States,	1002
located in this state, is eligible to become a public depository,	1003
subject to sections 135.31 to 135.40 of the Revised Code. No bank	1004
shall receive or have on deposit at any one time public moneys,	1005
including public moneys as defined in section 135.01 of the	1006
Revised Code, in an aggregate amount in excess of thirty per cent	1007
of its total assets, as shown in its latest report to the	1008
comptroller of the currency, the superintendent of financial	1009
institutions, the federal deposit insurance corporation, or the	1010
board of governors of the federal reserve system.	1011

(B) Any federal savings association, any savings and loan	1012
association or savings bank doing business under authority granted	1013
by the superintendent of financial institutions, or any savings	1014
and loan association or savings bank doing business under	1015
authority granted by the regulatory authority of another state of	1016
the United States, located in this state, and authorized to accept	1017
deposits is eligible to become a public depository, subject to	1018
sections 135.31 to 135.40 of the Revised Code. No savings	1019
association, savings and loan association, or savings bank shall	1020
receive or have on deposit at any one time public moneys,	1021
including public moneys as defined in section 135.01 of the	1022
Revised Code, in an aggregate amount in excess of thirty per cent	1023
of its total assets, as shown in its latest report to the office	1024
of thrift supervision, the superintendent of financial	1025
institutions, the federal deposit insurance corporation, or the	1026
board of governors of the federal reserve system.	1027

(C) Any federal credit union, any foreign credit union	1028
licensed pursuant to section 1733.39 of the Revised Code, or any	1029
credit union as defined in section 1733.01 of the Revised Code,	1030
located in this state, is eligible to become a public depository,	1031
subject to sections 135.31 to 135.40 of the Revised Code. No	1032
credit union shall receive or have on deposit at any one time	1033
public moneys, including public moneys as defined in section	1034
135.01 of the Revised Code, in an aggregate amount in excess of	1035
thirty per cent of its total assets, as shown in its latest report	1036
to the superintendent of financial institutions or the national	1037
credit union administration.	1038

(D) Any farm credit system institution that has a significant	1039
presence in the state is eligible to become a public depository,	1040
subject to sections 135.31 to 135.40 of the Revised Code. No farm	1041
credit system institution shall receive or have on deposit at any	1042
one time public moneys, including public moneys as defined in	1043
section 135.01 of the Revised Code, in an aggregate amount in	1044
excess of thirty per cent of its total assets, as shown in its	1045
latest report to the federal farm credit administration.	1046

Sec. 135.321.  No bank or, savings and loan association,	1047
credit union, or farm credit system institution is eligible to	1048
become a public depository or to receive any new public deposits	1049
pursuant to sections 135.31 to 135.40 of the Revised Code, if:	1050

(A) In the case of a bank, the bank or any of its directors,	1051
officers, employees, or controlling shareholders is currently a	1052
party to an active final or temporary cease-and-desist order	1053
issued under section 1121.32 of the Revised Code;	1054

(B) In the case of an association, the association or any of	1055
its directors, officers, employees, or controlling persons is	1056
currently a party to an active final or summary cease-and-desist	1057
order issued under section 1155.02 of the Revised Code;	1058

(C) In the case of a credit union, the credit union or any of	1059
its regulated individuals as defined in section 1733.01 of the	1060
Revised Code is currently a party to an active final or summary	1061
cease-and-desist order issued under section 1733.324 of the	1062
Revised Code;	1063

(D) In the case of a farm credit system institution, the farm	1064
credit institution or any of its directors, officers, employees,	1065
agents, or other persons participating in the institution's	1066
affairs is currently a party to an active final or temporary	1067
cease-and-desist order issued by the federal farm credit	1068
administration.	1069

Sec. 135.322.  (A) Except as otherwise provided in division	1070
(B) of this section, an officer, employee, or agent of a county	1071
shall not deposit public moneys in a credit union, as referred to	1072
in division (C) of section 135.32 of the Revised Code, or a farm	1073
credit system institution, as referred to in division (D) of that	1074
section, unless the funds are being placed with the credit union	1075
or institution for purposes of a linked deposit program	1076
established pursuant to this chapter and both of the following	1077
conditions are met:	1078

(1) The credit union or institution obtains insurance for the	1079
protection of the deposit from the national credit union	1080
association, a share guaranty corporation as defined in section	1081
1761.01 of the Revised Code, or the farm credit system insurance	1082
corporation, as applicable.	1083

(2) The credit union or institution pledges securities for	1084
the repayment of the deposit in accordance with section 135.37 of	1085
the Revised Code.	1086

(B) An officer, employee, or agent of a county may deposit	1087
public moneys in such a credit union or farm credit system	1088
institution other than for purposes of a linked deposit program	1089
established under this chapter if both of the following conditions	1090
are met:	1091

(1) The credit union or institution obtains insurance for the	1092
protection of the deposit from the national credit union	1093
association, a share guaranty corporation as defined in section	1094
1761.01 of the Revised Code, or the farm credit system insurance	1095
corporation, as applicable.	1096

(2) The total amount the county will have on deposit with the	1097
credit union or institution does not exceed the amount insured.	1098

Sec. 135.33.  (A) The board of county commissioners shall	1099
meet every four years in the month next preceding the date of the	1100
expiration of its current period of designation for the purpose of	1101
designating its public depositories of active moneys for the next	1102
succeeding four-year period commencing on the date of expiration	1103
of the preceding period.	1104

At least sixty days before the meeting, the county treasurer	1105
shall submit to the board an estimate of the aggregate amount of	1106
public moneys that might be available for deposit as active moneys	1107
at any one time during the next four-year period. Upon receipt of	1108
such estimate, the board shall immediately notify all eligible	1109
institutions that might desire to be designated as such public	1110
depositories of the date on which the designation is to be made;	1111
the amount that has been estimated to be available for deposit;	1112
and the date fixed as the last date on which applications may be	1113
submitted, that shall not be more than thirty days or less than	1114
ten days prior to the date set for the meeting designating public	1115
depositories.	1116

(B) Any eligible institution described in division (A), (C),	1117
or (D) of section 135.32 of the Revised Code that has an office	1118
located within the territorial limits of the county is eligible to	1119
become a public depository of the active moneys of the county.	1120
Each eligible institution desiring to be a public depository of	1121
such active moneys shall, not more than thirty days or less than	1122
ten days prior to the date fixed by this section, make application	1123
therefortherefore in writing to the board of county	1124
commissioners. The application may specify the maximum amount of	1125
such public moneys that the applicant desires to receive and have	1126
on deposit at any time during the period covered by the	1127
designation. Each application shall be accompanied by a financial	1128
statement of the applicant, under oath of its cashier, treasurer,	1129
or other officer as of the date of its latest report to the	1130
superintendent of banks orfinancial institutions, the comptroller	1131
of the currency, the national credit union administration, or the	1132
federal farm credit administration, and adjusted to show any	1133
changes therein prior to the date of the application, that shall	1134
include a statement of its public and nonpublic deposits.	1135

(C) The board of county commissioners, upon recommendation of	1136
the treasurer, shall designate, by resolution, one or more	1137
eligible institutions as public depositories for active moneys. In	1138
case the aggregate amount of active moneys applied for by	1139
institutions within the county is less than the amount estimated	1140
to be available for deposit, the board may designate as a public	1141
depository one or more eligible institutions that are conveniently	1142
located. The original resolution of designation shall be certified	1143
to the treasurer and any institution designated as a public	1144
depository.	1145

(D) No service charge shall be made against any deposit of	1146
active moneys, or collected or paid, unless such service charge is	1147
the same as is customarily imposed by institutions receiving money	1148
on deposit subject to check, in which event the charge may be	1149
paid.	1150

(E) Notwithstanding division (C) of this section, the board	1151
of county commissioners may authorize, by resolution, the	1152
treasurer to deposit money necessary to pay the principal and	1153
interest on bonds and notes, and any fees incident thereto, in any	1154
bank, credit union, or farm credit system institution within this	1155
state.	1156

Moneys so deposited shall be transferred by the treasurer	1157
according to the terms of the agreement with the bank, credit	1158
union, or farm credit system institution but shall remain as	1159
public moneys until such time as they are actually paid out by the	1160
bank, credit union, or farm credit system institution. Until such	1161
time as payments become due and payable on such principal or	1162
interest, the bank, credit union, or farm credit system	1163
institution shall invest any moneys in the account in	1164
interest-bearing obligations at the highest, reasonable rate of	1165
interest obtainable.	1166

So long as moneys remain in the account, the bank, credit	1167
union, or farm credit system institution shall deliver to the	1168
treasurer, at the end of each month, a statement showing an	1169
accounting of all activities in the account during the preceding	1170
month including, but not limited to, all payments made, all	1171
interest earned, and the beginning and ending balances, together	1172
with any coupons redeemed since the preceding statement was	1173
issued.	1174

Sec. 135.35.  (A) The investing authority shall deposit or	1175
invest any part or all of the county's inactive moneys and shall	1176
invest all of the money in the county public library fund when	1177
required by section 135.352 of the Revised Code. The following	1178
classifications of securities and obligations are eligible for	1179
such deposit or investment:	1180

(1) United States treasury bills, notes, bonds, or any other	1181
obligation or security issued by the United States treasury, any	1182
other obligation guaranteed as to principal or interest by the	1183
United States, or any book entry, zero-coupon United States	1184
treasury security that is a direct obligation of the United	1185
States.	1186

Nothing in the classification of eligible securities and	1187
obligations set forth in divisions (A)(2) to (11) of this section	1188
shall be construed to authorize any investment in stripped	1189
principal or interest obligations of such eligible securities and	1190
obligations.	1191

(2) Bonds, notes, debentures, or any other obligations or	1192
securities issued by any federal government agency or	1193
instrumentality, including, but not limited to, the federal	1194
national mortgage association, federal home loan bank, federal	1195
farm credit bank, federal home loan mortgage corporation,	1196
government national mortgage association, and student loan	1197
marketing association. All federal agency securities shall be	1198
direct issuances of federal government agencies or	1199
instrumentalities.	1200

(3) Time certificates of deposit or savings or deposit	1201
accounts, including, but not limited to, passbook accounts, in any	1202
eligible institution mentioned in section 135.32 of the Revised	1203
Code;	1204

(4) Bonds and other obligations of this state or the	1205
political subdivisions of this state;	1206

(5) No-load money market mutual funds consisting exclusively	1207
of obligations described in division (A)(1) or (2) of this section	1208
and repurchase agreements secured by such obligations, provided	1209
that investments in securities described in this division are made	1210
only through eligible institutions mentioned in section 135.32 of	1211
the Revised Code;	1212

(6) The Ohio subdivision's fund as provided in section 135.45	1213
of the Revised Code;	1214

(7) Securities lending agreements with any eligible	1215
institution mentioned in section 135.32 of the Revised Code that	1216
is a member of the federal reserve system or federal home loan	1217
bank or with any recognized United States government securities	1218
dealer meeting the description in division (J)(1) of this section,	1219
under the terms of which agreements the investing authority lends	1220
securities and the eligible institution or dealer agrees to	1221
simultaneously exchange similar securities or cash, equal value	1222
for equal value.	1223

Securities and cash received as collateral for a securities	1224
lending agreement are not inactive moneys of the county or moneys	1225
of a county public library fund. The investment of cash collateral	1226
received pursuant to a securities lending agreement may be	1227
invested only in instruments specified by the investing authority	1228
in the written investment policy described in division (K) of this	1229
section.	1230

(8) Up to twenty-five per cent of the county's total average	1231
portfolio in either of the following investments:	1232

(a) Commercial paper notes issued by an entity that is	1233
defined in division (D) of section 1705.01 of the Revised Code and	1234
that has assets exceeding five hundred million dollars, to which	1235
notes all of the following apply:	1236

(i) The notes are rated at the time of purchase in the	1237
highest classification established by at least two nationally	1238
recognized standard rating services.	1239

(ii) The aggregate value of the notes does not exceed ten per	1240
cent of the aggregate value of the outstanding commercial paper of	1241
the issuing corporation.	1242

(iii) The notes mature not later than two hundred seventy	1243
days after purchase.	1244

(b) Bankers acceptances of banks that are insured by the	1245
federal deposit insurance corporation and to which both of the	1246
following apply:	1247

(i) The obligations are eligible for purchase by the federal	1248
reserve system.	1249

(ii) The obligations mature not later than one hundred eighty	1250
days after purchase.	1251

No investment shall be made pursuant to division (A)(8) of	1252
this section unless the investing authority has completed	1253
additional training for making the investments authorized by	1254
division (A)(8) of this section. The type and amount of additional	1255
training shall be approved by the auditor of state and may be	1256
conducted by or provided under the supervision of the auditor of	1257
state.	1258

(9) Up to fifteen per cent of the county's total average	1259
portfolio in notes issued by corporations that are incorporated	1260
under the laws of the United States and that are operating within	1261
the United States, or by depository institutions that are doing	1262
business under authority granted by the United States or any state	1263
and that are operating within the United States, provided both of	1264
the following apply:	1265

(a) The notes are rated in the second highest or higher	1266
category by at least two nationally recognized standard rating	1267
services at the time of purchase.	1268

(b) The notes mature not later than two years after purchase.

1269

(10) No-load money market mutual funds rated in the highest	1270
category at the time of purchase by at least one nationally	1271
recognized standard rating service and consisting exclusively of	1272
obligations described in division (A)(1), (2), or (6) of section	1273
135.143 of the Revised Code;	1274

(11) Debt interests rated at the time of purchase in the	1275
three highest categories by two nationally recognized standard	1276
rating services and issued by foreign nations diplomatically	1277
recognized by the United States government. All interest and	1278
principal shall be denominated and payable in United States funds.	1279
The investments made under division (A)(11) of this section shall	1280
not exceed in the aggregate one per cent of a county's total	1281
average portfolio.	1282

The investing authority shall invest under division (A)(11)	1283
of this section in a debt interest issued by a foreign nation only	1284
if the debt interest is backed by the full faith and credit of	1285
that foreign nation, there is no prior history of default, and the	1286
debt interest matures not later than five years after purchase.	1287
For purposes of division (A)(11) of this section, a debt interest	1288
is rated in the three highest categories by two nationally	1289
recognized standard rating services if either the debt interest	1290
itself or the issuer of the debt interest is rated, or is	1291
implicitly rated, at the time of purchase in the three highest	1292
categories by two nationally recognized standard rating services.	1293

(12) A current unpaid or delinquent tax line of credit	1294
authorized under division (G) of section 135.341 of the Revised	1295
Code, provided that all of the conditions for entering into such a	1296
line of credit under that division are satisfied, or bonds and	1297
other obligations of a county land reutilization corporation	1298
organized under Chapter 1724. of the Revised Code, if the county	1299
land reutilization corporation is located wholly or partly within	1300
the same county as the investing authority.	1301

(B) Nothing in the classifications of eligible obligations	1302
and securities set forth in divisions (A)(1) to (11) of this	1303
section shall be construed to authorize investment in a	1304
derivative, and no investing authority shall invest any county	1305
inactive moneys or any moneys in a county public library fund in a	1306
derivative. For purposes of this division, "derivative" means a	1307
financial instrument or contract or obligation whose value or	1308
return is based upon or linked to another asset or index, or both,	1309
separate from the financial instrument, contract, or obligation	1310
itself. Any security, obligation, trust account, or other	1311
instrument that is created from an issue of the United States	1312
treasury or is created from an obligation of a federal agency or	1313
instrumentality or is created from both is considered a derivative	1314
instrument. An eligible investment described in this section with	1315
a variable interest rate payment, based upon a single interest	1316
payment or single index comprised of other eligible investments	1317
provided for in division (A)(1) or (2) of this section, is not a	1318
derivative, provided that such variable rate investment has a	1319
maximum maturity of two years. A treasury inflation-protected	1320
security shall not be considered a derivative, provided the	1321
security matures not later than five years after purchase.	1322

(C) Except as provided in divisions (D) and (O) of this	1323
section, any investment made pursuant to this section must mature	1324
within ten years from the date of settlement, unless the	1325
investment is matched to a specific obligation or debt of the	1326
county or to a specific obligation or debt of a political	1327
subdivision of this state, and the investment is specifically	1328
approved by the investment advisory committee.	1329

(D) The investing authority may also enter into a written	1330
repurchase agreement with any eligible institution mentioned in	1331
section 135.32 of the Revised Code or any eligible securities	1332
dealer pursuant to division (J) of this section, under the terms	1333
of which agreement the investing authority purchases and the	1334
eligible institution or dealer agrees unconditionally to	1335
repurchase any of the securities listed in divisions (B)(1) to	1336
(5), except letters of credit described in division (B)(2), of	1337
section 135.18 of the Revised Code. The market value of securities	1338
subject to an overnight written repurchase agreement must exceed	1339
the principal value of the overnight written repurchase agreement	1340
by at least two per cent. A written repurchase agreement must	1341
exceed the principal value of the overnight written repurchase	1342
agreement, by at least two per cent. A written repurchase	1343
agreement shall not exceed thirty days, and the market value of	1344
securities subject to a written repurchase agreement must exceed	1345
the principal value of the written repurchase agreement by at	1346
least two per cent and be marked to market daily. All securities	1347
purchased pursuant to this division shall be delivered into the	1348
custody of the investing authority or the qualified custodian of	1349
the investing authority or an agent designated by the investing	1350
authority. A written repurchase agreement with an eligible	1351
securities dealer shall be transacted on a delivery versus payment	1352
basis. The agreement shall contain the requirement that for each	1353
transaction pursuant to the agreement the participating	1354
institution shall provide all of the following information:	1355

(1) The par value of the securities;

1356

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

1357

(3) A numerical identifier generally accepted in the	1358
securities industry that designates the securities.	1359

No investing authority shall enter into a written repurchase	1360
agreement under the terms of which the investing authority agrees	1361
to sell securities owned by the county to a purchaser and agrees	1362
with that purchaser to unconditionally repurchase those	1363
securities.	1364

(E) No investing authority shall make an investment under	1365
this section, unless the investing authority, at the time of	1366
making the investment, reasonably expects that the investment can	1367
be held until its maturity. The investing authority's written	1368
investment policy shall specify the conditions under which an	1369
investment may be redeemed or sold prior to maturity.	1370

(F) No investing authority shall pay a county's inactive	1371
moneys or moneys of a county public library fund into a fund	1372
established by another subdivision, treasurer, governing board, or	1373
investing authority, if that fund was established by the	1374
subdivision, treasurer, governing board, or investing authority	1375
for the purpose of investing or depositing the public moneys of	1376
other subdivisions. This division does not apply to the payment of	1377
public moneys into either of the following:	1378

(1) The Ohio subdivision's fund pursuant to division (A)(6)	1379
of this section;	1380

(2) A fund created solely for the purpose of acquiring,	1381
constructing, owning, leasing, or operating municipal utilities	1382
pursuant to the authority provided under section 715.02 of the	1383
Revised Code or Section 4 of Article XVIII, Ohio Constitution.	1384

For purposes of division (F) of this section, "subdivision"	1385
includes a county.	1386

(G) The use of leverage, in which the county uses its current	1387
investment assets as collateral for the purpose of purchasing	1388
other assets, is prohibited. The issuance of taxable notes for the	1389
purpose of arbitrage is prohibited. Contracting to sell securities	1390
not owned by the county, for the purpose of purchasing such	1391
securities on the speculation that bond prices will decline, is	1392
prohibited.	1393

(H) Any securities, certificates of deposit, deposit	1394
accounts, or any other documents evidencing deposits or	1395
investments made under authority of this section shall be issued	1396
in the name of the county with the county treasurer or investing	1397
authority as the designated payee. If any such deposits or	1398
investments are registrable either as to principal or interest, or	1399
both, they shall be registered in the name of the treasurer.	1400

(I) The investing authority shall be responsible for the	1401
safekeeping of all documents evidencing a deposit or investment	1402
acquired under this section, including, but not limited to,	1403
safekeeping receipts evidencing securities deposited with a	1404
qualified trustee, as provided in section 135.37 of the Revised	1405
Code, and documents confirming the purchase of securities under	1406
any repurchase agreement under this section shall be deposited	1407
with a qualified trustee, provided, however, that the qualified	1408
trustee shall be required to report to the investing authority,	1409
auditor of state, or an authorized outside auditor at any time	1410
upon request as to the identity, market value, and location of the	1411
document evidencing each security, and that if the participating	1412
institution is a designated depository of the county for the	1413
current period of designation, the securities that are the subject	1414
of the repurchase agreement may be delivered to the treasurer or	1415
held in trust by the participating institution on behalf of the	1416
investing authority.	1417

Upon the expiration of the term of office of an investing	1418
authority or in the event of a vacancy in the office for any	1419
reason, the officer or the officer's legal representative shall	1420
transfer and deliver to the officer's successor all documents	1421
mentioned in this division for which the officer has been	1422
responsible for safekeeping. For all such documents transferred	1423
and delivered, the officer shall be credited with, and the	1424
officer's successor shall be charged with, the amount of moneys	1425
evidenced by such documents.	1426

(J)(1) All investments, except for investments in securities	1427
described in divisions (A)(5), (6), and (12) of this section,	1428
shall be made only through a member of the national association of	1429
securities dealers, through a bank, savings bank, or savings and	1430
loan association, or credit union regulated by the superintendent	1431
of financial institutions, or through an institution regulated by	1432
the comptroller of the currency, the federal deposit insurance	1433
corporation, or board of governors of the federal reserve system,	1434
the national credit union administration, or the federal farm	1435
credit administration.	1436

(2) Payment for investments shall be made only upon the	1437
delivery of securities representing such investments to the	1438
treasurer, investing authority, or qualified trustee. If the	1439
securities transferred are not represented by a certificate,	1440
payment shall be made only upon receipt of confirmation of	1441
transfer from the custodian by the treasurer, governing board, or	1442
qualified trustee.	1443

(K)(1) Except as otherwise provided in division (K)(2) of	1444
this section, no investing authority shall make an investment or	1445
deposit under this section, unless there is on file with the	1446
auditor of state a written investment policy approved by the	1447
investing authority. The policy shall require that all entities	1448
conducting investment business with the investing authority shall	1449
sign the investment policy of that investing authority. All	1450
brokers, dealers, and financial institutions, described in	1451
division (J)(1) of this section, initiating transactions with the	1452
investing authority by giving advice or making investment	1453
recommendations shall sign the investing authority's investment	1454
policy thereby acknowledging their agreement to abide by the	1455
policy's contents. All brokers, dealers, and financial	1456
institutions, described in division (J)(1) of this section,	1457
executing transactions initiated by the investing authority,	1458
having read the policy's contents, shall sign the investment	1459
policy thereby acknowledging their comprehension and receipt.	1460

(2) If a written investment policy described in division	1461
(K)(1) of this section is not filed on behalf of the county with	1462
the auditor of state, the investing authority of that county shall	1463
invest the county's inactive moneys and moneys of the county	1464
public library fund only in time certificates of deposits or	1465
savings or deposit accounts pursuant to division (A)(3) of this	1466
section, no-load money market mutual funds pursuant to division	1467
(A)(5) of this section, or the Ohio subdivision's fund pursuant to	1468
division (A)(6) of this section.	1469

(L)(1) The investing authority shall establish and maintain	1470
an inventory of all obligations and securities acquired by the	1471
investing authority pursuant to this section. The inventory shall	1472
include a description of each obligation or security, including	1473
type, cost, par value, maturity date, settlement date, and any	1474
coupon rate.	1475

(2) The investing authority shall also keep a complete record	1476
of all purchases and sales of the obligations and securities made	1477
pursuant to this section.	1478

(3) The investing authority shall maintain a monthly	1479
portfolio report and issue a copy of the monthly portfolio report	1480
describing such investments to the county investment advisory	1481
committee, detailing the current inventory of all obligations and	1482
securities, all transactions during the month that affected the	1483
inventory, any income received from the obligations and	1484
securities, and any investment expenses paid, and stating the	1485
names of any persons effecting transactions on behalf of the	1486
investing authority.	1487

(4) The monthly portfolio report shall be a public record and	1488
available for inspection under section 149.43 of the Revised Code.	1489

(5) The inventory and the monthly portfolio report shall be	1490
filed with the board of county commissioners. The monthly	1491
portfolio report also shall be filed with the treasurer of state.	1492

(M) An investing authority may enter into a written	1493
investment or deposit agreement that includes a provision under	1494
which the parties agree to submit to nonbinding arbitration to	1495
settle any controversy that may arise out of the agreement,	1496
including any controversy pertaining to losses of public moneys	1497
resulting from investment or deposit. The arbitration provision	1498
shall be set forth entirely in the agreement, and the agreement	1499
shall include a conspicuous notice to the parties that any party	1500
to the arbitration may apply to the court of common pleas of the	1501
county in which the arbitration was held for an order to vacate,	1502
modify, or correct the award. Any such party may also apply to the	1503
court for an order to change venue to a court of common pleas	1504
located more than one hundred miles from the county in which the	1505
investing authority is located.	1506

For purposes of this division, "investment or deposit	1507
agreement" means any agreement between an investing authority and	1508
a person, under which agreement the person agrees to invest,	1509
deposit, or otherwise manage, on behalf of the investing	1510
authority, a county's inactive moneys or moneys in a county public	1511
library fund, or agrees to provide investment advice to the	1512
investing authority.	1513

(N) An investment held in the county portfolio on September	1514
27, 1996, that was a legal investment under the law as it existed	1515
before September 27, 1996, may be held until maturity, or if the	1516
investment does not have a maturity date the investment may be	1517
held until five years from September 27, 1996, regardless of	1518
whether the investment would qualify as a legal investment under	1519
the terms of this section as amended.	1520

(O) Upon a majority affirmative vote of the county investment	1521
advisory committee in support of such action, an investment	1522
authority may invest up to twenty-five per cent of the county's	1523
total average portfolio of investments made under this section in	1524
securities and obligations that mature on a date that is more than	1525
ten years from the date of settlement.	1526

Sec. 135.353.  (A) In addition to the investments specified	1527
in section 135.35 of the Revised Code, the investing authority of	1528
a county may do all of the following:	1529

(1) Invest inactive or public moneys in linked deposits as	1530
authorized by resolution adopted pursuant to section 135.80 or	1531
135.801 of the Revised Code;	1532

(2) Invest inactive or public moneys in linked deposits as	1533
authorized by resolution adopted pursuant to section 135.805 of	1534
the Revised Code for a term considered appropriate by the	1535
investing authority, but not exceeding fifteen years, which	1536
investment may be renewed for up to two additional terms with each	1537
additional term not exceeding fifteen years.	1538

(3) Invest inactive moneys in certificates of deposit in	1539
accordance with all of the following:	1540

(a) The inactive moneys initially are deposited with an	1541
eligible public depository described in section 135.32 of the	1542
Revised Code and selected by the investing authority.	1543

(b) For the investing authority depositing the inactive	1544
moneys pursuant to division (A)(3)(a) of this section, the	1545
eligible public depository selected pursuant to that division	1546
invests the inactive moneys in certificates of deposit of one or	1547
more federally insured banks, savings banks, or savings and loan	1548
associations, farm credit system institutions, or credit unions	1549
insured pursuant to section 1733.041 of the Revised Code, wherever	1550
located. The full amount of principal and any accrued interest of	1551
each certificate of deposit invested in pursuant to division	1552
(A)(3)(b) of this section shall be insured by federal deposit	1553
insurance, by the national credit union administration or a share	1554
guaranty corporation as defined in section 1761.01 of the Revised	1555
Code, or by the farm credit system insurance corporation, as	1556
applicable.	1557

(c) For the investing authority depositing the inactive	1558
moneys pursuant to division (A)(3)(a) of this section, the	1559
eligible public depository selected pursuant to that division acts	1560
as custodian of the certificates of deposit described in division	1561
(A)(3)(b) of this section.	1562

(d) On the same date the public moneys are redeposited by the	1563
public depository, the public depository may, in its sole	1564
discretion, choose whether to receive deposits, in any amount,	1565
from other banks, savings banks, or savings and loan associations.	1566

(e) The public depository provides to the investing authority	1567
a monthly account statement that includes the amount of its funds	1568
deposited and held at each bank, savings bank, or savings and loan	1569
association, credit union, or farm credit system institution for	1570
which the public depository acts as a custodian pursuant to this	1571
section.	1572

(B) Inactive moneys deposited or invested in accordance with	1573
division (A)(3) of this section are not subject to any pledging	1574
requirements described in section 135.181 or 135.37 of the Revised	1575
Code.	1576

Sec. 135.37.  (A) Except as provided in section 135.353 or	1577
135.354 of the Revised Code, any institution described in section	1578
135.32 of the Revised Code shall, at the time it receives a	1579
deposit of public moneys under section 135.33 or 135.35 of the	1580
Revised Code, pledge to and deposit with the investing authority,	1581
as security for the repayment of all public moneys to be	1582
deposited, eligible securities of aggregate market value equal to	1583
or in excess of the amount of public moneys to be at the time so	1584
deposited. Any securities listed in division (B) of section 135.18	1585
of the Revised Code are eligible for such purpose. The collateral	1586
so pledged or deposited may be in an amount that when added to the	1587
portion of the deposit insured by the federal deposit insurance	1588
corporation or, any other agency or instrumentality of the federal	1589
government, a credit union share guaranty corporation as defined	1590
in section 1761.01 of the Revised Code, or the farm credit system	1591
insurance corporation will, in the aggregate, equal or exceed the	1592
amount of public moneys so deposited; provided that, when an	1593
investment of inactive moneys consists of the purchase of one or	1594
more of the type of securities listed in division (A)(1) or (2) of	1595
section 135.35 of the Revised Code, no additional collateral need	1596
be pledged or deposited.	1597

The investing authority also may require that additional	1598
eligible securities be pledged or deposited when depreciation	1599
occurs in the market value of any securities pledged or deposited.	1600

(B) The public depository may, at any time, provide for the	1601
exchange or substitution of securities for other eligible	1602
securities or the release of securities when the amount of public	1603
moneys on deposit does not require that they be pledged or	1604
deposited, by notifying the investing authority of its intent to	1605
take such action.	1606

Upon proper notification of the public depository's desire	1607
for release of securities, the investing authority may sign a	1608
release of such securities provided that the aggregate amount of	1609
collateral remaining pledged or deposited meets the requirements	1610
of divisions (A) to (E) of this section.	1611

When a public depository desires to exchange or substitute	1612
securities for other eligible securities, the investing authority	1613
may release the securities pledged or deposited after the deposit	1614
of other securities having a current market value equal to or	1615
greater than the current market value of securities then on	1616
deposit or after a safekeeping receipt has been received	1617
evidencing the deposit and pledge of such securities.	1618

(C) Upon request from the investing authority, the trustee or	1619
the public depository shall furnish a statement of the securities	1620
pledged against the public moneys deposited in the public	1621
depository.	1622

(D) If a public depository fails to pay over any part of any	1623
public deposit made as provided by law, the investing authority	1624
shall sell any pledged or deposited securities, as prescribed in	1625
division (C) of section 135.18 of the Revised Code.	1626

(E) A public depository may designate, in accordance with the	1627
provisions of division (D) of section 135.18 of the Revised Code,	1628
a trustee for the safekeeping of any pledged securities. Such	1629
trustee shall be any bank or other institution eligible as a	1630
trustee under division (I) of section 135.18 of the Revised Code,	1631
except that, for the purposes of this section, a bank to which a	1632
certificate of qualification is issued shall be an institution	1633
mentioned in division (A) of section 135.32 of the Revised Code.	1634

(F) In lieu of the pledging requirements prescribed in	1635
divisions (A) to (E) of this section, an institution designated as	1636
a public depository may pledge securities pursuant to section	1637
135.181 of the Revised Code.	1638

Sec. 135.51.  In case of any default on the part of a bank	1639
or, domestic building and loan association, savings bank, credit	1640
union, or farm credit system institution in its capacity as	1641
depository of the money of any county, municipal corporation,	1642
township, or school district, the board of county commissioners,	1643
the legislative authority of such municipal corporation, the board	1644
of township trustees, and the board of education of such school	1645
district, in lieu of immediately selling the securities received	1646
and held as security for the deposit of such money under authority	1647
of any section of the Revised Code, may retain the same, collect	1648
the interest and any installments of principal thereafter falling	1649
due on such securities, and refund, exchange, sell, or otherwise	1650
dispose of any of them, at such times and in such manner as such	1651
board of county commissioners, legislative authority, board of	1652
township trustees, or board of education determines to be	1653
advisable with a view to conserving the value of such securities	1654
for the benefit of such county, municipal corporation, township,	1655
or school district, and for the benefit of the depositors,	1656
creditors, and stockholders or other owners of such bank or	1657
building and loan, domestic association, savings bank, credit	1658
union, or farm credit system institution.	1659

Sec. 135.52.  In anticipation of the collection of the	1660
principal and interest of securities, or other disposition of	1661
them, as authorized by section 135.51 of the Revised Code, and of	1662
the payment of dividends in the liquidation of the depository bank	1663
or, domestic savings and loan association, savings bank, credit	1664
union, or farm credit system institution and for the purpose of	1665
providing public money immediately available for the needs of the	1666
county, municipal corporation, township, or school district, the	1667
taxing authority may issue bonds of the county, municipal	1668
corporation, township, or school district, in an amount not	1669
exceeding the moneys on deposit in the depository bank or savings	1670
and loan, domestic association, savings bank, credit union, or	1671
farm credit system institution, the payment of which is secured by	1672
such securities, after crediting to such moneys the amount	1673
realized from the sale or other disposition of any other	1674
securities pledged or deposited for such moneys, or in an amount	1675
not exceeding the value or amount ultimately to be realized from	1676
such securities to be determined by valuation made under oath by	1677
two persons who are conversant with the value of the assets	1678
represented by such securities, whichever amount is the lesser,	1679
plus an amount equal to the interest accruing on such securities	1680
during one year from and after the date of default of such bank or	1681
savings and loan, domestic association, savings bank, credit	1682
union, or farm credit system institution in its capacity as a	1683
depository. The maturity of such bonds shall not exceed ten years	1684
and they shall bear interest at a rate not exceeding the rate	1685
determined as provided in section 9.95 of the Revised Code. Such	1686
bonds shall be the general obligations of the county, municipal	1687
corporation, township, or school district issuing them. The	1688
legislation under which such bonds are issued shall comply with	1689
Section 11 of Article XII, Ohio Constitution. The amount of such	1690
bonds issued or outstanding shall not be considered in	1691
ascertaining any of the limitations on the net indebtedness of	1692
such county, municipal corporation, township, or school district	1693
prescribed by law. In all other respects, the issuance,	1694
maturities, and sale of such bonds shall be subject to Chapter	1695
133. of the Revised Code.	1696

A sufficient amount of the moneys received from principal on	1697
the sale of such bonds to cover the interest accruing on such	1698
securities for one year, to the extent determined by the authority	1699
issuing such bonds in the resolution or ordinance of issuance	1700
under this section, shall be paid into the bond retirement fund	1701
from which the bonds are to be redeemed, together with premiums	1702
and accrued interest. The balance of such principal shall be	1703
credited to the funds to which the moneys represented by such	1704
depository balance belong, and in the respective amounts of such	1705
funds.	1706

Sec. 135.53.  All principal and interest collected by the	1707
proper officer or agent of the county, municipal corporation,	1708
township, or school district, on account of the securities	1709
mentioned in section 135.51 of the Revised Code, the proceeds of	1710
any sale or other disposition of any of such securities, and any	1711
dividends received from the liquidation of the defaulting bank or,	1712
domestic building and loan association, savings bank, credit	1713
union, or farm credit system institution shall be paid into the	1714
bond retirement fund from which the bonds provided for in section	1715
135.52 of the Revised Code are to be redeemed, until the aggregate	1716
of such payments equals the requirements of such fund, whereupon	1717
such securities, and any remaining depository balance, not	1718
anticipated by such bonds, to the extent then retained by such	1719
county, municipal corporation, township, or school district, shall	1720
be assigned and delivered to the defaulting bank or building and	1721
loan, domestic association, savings bank, credit union, or farm	1722
credit system institution to its liquidating officer, or to its	1723
successor or assignee, together with a release or other instrument	1724
showing full satisfaction of the claim of such county, municipal	1725
corporation, township, or school district against such bank,	1726
building and loandomestic association, savings bank, credit	1727
union, farm credit system institution, or officer.	1728

Sec. 1733.04.  (A) In addition to the authority conferred by	1729
section 1701.13 of the Revised Code, but subject to any	1730
limitations contained in sections 1733.01 to 1733.45 of the	1731
Revised Code, and its articles and regulations, a credit union may	1732
do any of the following:	1733

(1) Make loans as provided in section 1733.25 of the Revised	1734
Code;	1735

(2) Invest its money as provided in section 1733.30 of the	1736
Revised Code;	1737

(3) If authorized by the code of regulations, rebate to the	1738
borrowing members a portion of the member's interest paid to the	1739
credit union;	1740

(4) If authorized by the regulations, charge a membership or	1741
entrance fee not to exceed one dollar per member;	1742

(5) Purchase group savings life insurance and group credit	1743
life insurance;	1744

(6) Make reasonable contributions to any nonprofit civic,	1745
charitable, or service organizations;	1746

(7) Act as trustee or custodian, for which reasonable	1747
compensation may be received, under any written trust instrument	1748
or custodial agreement created or organized in the United States	1749
and forming part of a tax-advantaged savings plan that qualifies	1750
for specific tax treatment under sections 223, 401(d), 408, 408A,	1751
and 530 of the Internal Revenue Code, 26 U.S.C. 223, 401(d), 408,	1752
408A, and 530, as amended, for its members or groups of its	1753
members, provided that the funds of such plans are invested in	1754
share accounts or share certificate accounts of the credit union.	1755
These services include, but are not limited to, acting as a	1756
trustee or custodian for member retirement, education, or health	1757
savings accounts.	1758

(8) Act as a public depository for purposes of, and in	1759
accordance with, Chapter 135. of the Revised Code.	1760

(B) The authority of a credit union shall be subject to the	1761
following:	1762

(1) A credit union may not borrow money in excess of	1763
twenty-five per cent of its shares and undivided earnings, without	1764
prior specific authorization by the superintendent of credit	1765
unions.	1766

(2) A credit union may not pay a commission or other	1767
compensation to any person for securing members or for the sale of	1768
its shares, except that reasonable incentives may be made	1769
available directly to members or potential members to promote	1770
thrift.	1771

(3) A credit union, subject to the approval of the	1772
superintendent, may have service facilities other than its home	1773
office.	1774

(4) Real estate may be acquired by lease, purchase, or	1775
otherwise as necessary and to the extent required for use of the	1776
credit union presently and in the future operation of its office	1777
or headquarters, and in case of a purchase of real estate, the	1778
superintendent must first be notified in writing prior to the	1779
purchase of the real estate. The superintendent shall notify the	1780
credit union not more than thirty days after receipt of the	1781
notification to purchase the real estate if the purchase is	1782
denied, approved, or modified. If the superintendent does not	1783
respond within thirty days after receipt of the notification to	1784
purchase the real estate, it shall be deemed approved. Nothing	1785
herein contained shall be deemed to prohibit a credit union from	1786
taking title to real estate in connection with a default in the	1787
payment of a loan, provided that title to such real estate shall	1788
not be held by the credit union for more than two years without	1789
the prior written approval of the superintendent. A credit union	1790
also may lease space in any real estate it acquires in accordance	1791
with rules adopted by the superintendent.	1792

(C)(1) As used in division (C) of this section:

1793

(a) "School" means an elementary or secondary school.

1794

(b) "Student" means a child enrolled in a school.

1795

(c) "Student branch" means the designation provided to the	1796
credit union for the in-school services and financial education	1797
offered to students.	1798

(2) A credit union, upon agreement with a school board, in	1799
the case of a public school, or the governing authority, in the	1800
case of a nonpublic school, and with the permission of the	1801
superintendent, may open and maintain a student branch.	1802

(3) Notwithstanding any other provision of this section, any	1803
student enrolled in the school maintaining a student branch who is	1804
not otherwise qualified for membership in the credit union	1805
maintaining the student branch is qualified to be a member of that	1806
student branch.	1807

(4) The student's membership in the student branch expires	1808
upon the student's graduation from secondary school.	1809

(5) The student branch is for the express use of students and	1810
may not be used by faculty, staff, or lineal ancestors or	1811
descendents of students.	1812

(6) Faculty, staff, or lineal ancestors or descendents of	1813
students are not eligible for membership in the credit union	1814
maintaining the student branch unless otherwise qualified by this	1815
section to be members.	1816

(7) The superintendent may adopt rules appropriate to the	1817
formation and operation of student branches.	1818

(D) A credit union may guarantee the signature of a member in	1819
connection with a transaction involving tangible or intangible	1820
property in which a member has or seeks to acquire an interest.	1821

Sec. 1733.041.  Each credit union operating under this	1822
chapter or otherwise authorized to do business in this state shall	1823
obtain insurance for the protection of their members' accounts.	1824
Such share guarantee insurance may be obtained from the national	1825
credit union administration operating under the "Federal Credit	1826
Union Act," 84 Stat. 994 (1970), 12 U.S.C. 1751, and any	1827
amendments thereto, or from the national deposita credit union	1828
share guaranty corporation, established under Chapter 1761. of the	1829
Revised Code, or from any insurer qualified under the laws of this	1830
state to write such insurance.	1831

Sec. 1733.24.  (A) A credit union is authorized to receive	1832
funds for deposit in share accounts, share draft accounts, and	1833
share certificates from its members, from other credit unions, and	1834
from an officer, employee, or agent of the federal, state, or	1835
local governments, or political subdivisions of the state, in	1836
accordance with such terms, rates, and conditions as may be	1837
established by its board of directors and, if acting as a public	1838
depository, for purposes of, and in accordance with, Chapter 135.	1839
of the Revised Code.	1840

(B) The shares and share accounts of the credit union may be	1841
of one or more classes, as designated by the board of directors,	1842
subject to approval of the superintendent of credit unions based	1843
on rules that shall assure equitable distribution of dividends	1844
among classes, considering costs and advantages of each class to	1845
the members of the credit union, including without limitation	1846
special services rendered, length of ownership, minimum	1847
investment, conditions of repurchase, and other appropriate	1848
standards or combinations thereof. In the event the articles of	1849
incorporation of the credit union indicate the authorized number	1850
of shares to be unlimited, the designation of classification of	1851
shares and share accounts of the credit union may be effected by	1852
the board of directors, subject to the approval of the	1853
superintendent, and does not require amendment of the articles of	1854
incorporation. All shares of the credit union shall have a par	1855
value per share as set by the board of directors. Redemptions and	1856
liquidating dividends shall be prorated to each member on the	1857
basis of the price paid the credit union for such share,	1858
irrespective of the class of such shares.	1859

(C)(1) Each credit union shall have one class of shares	1860
designated as "membership share." The membership shares, or if a	1861
credit union has but one class of shares, then all of the shares	1862
of the credit union, shall have a par value as set by the board of	1863
directors.	1864

(2) Two or more persons that are eligible for membership that	1865
have jointly subscribed for one or more shares under a joint	1866
account each may be admitted to membership.	1867

(D) A credit union need not issue certificates for any or all	1868
of its classes of shares but irrespective of whether certificates	1869
are issued, a registry of shares must be kept, including all of	1870
the transactions of the credit union pertaining to such shares.	1871

(E) A credit union is authorized to maintain share draft	1872
accounts in accordance with rules prescribed by the	1873
superintendent. The credit union may pay dividends on share draft	1874
accounts, may pay dividends at different rates on different types	1875
of share draft accounts, and may permit the owners of such share	1876
draft accounts to make withdrawals by negotiable or transferable	1877
instruments or other orders for the purpose of making transfers to	1878
third parties.	1879

(F) Unless otherwise provided by written agreement of the	1880
parties, the rights, responsibilities, and liabilities attaching	1881
to a share draft withdrawn from, transferred to, or otherwise	1882
handled by a credit union are defined in and governed by Chapters	1883
1303. and 1304. of the Revised Code, as if the credit union were a	1884
bank.	1885

(G) Unless otherwise provided in the articles or regulations,	1886
a member may designate any person or persons to own or hold	1887
shares, or share accounts with the member in joint tenancy with	1888
right of survivorship and not as tenants in common.	1889

(H) Shares or share accounts may be issued in the name of a	1890
custodian under the Ohio transfers to minors act, a member in	1891
trust for a beneficiary, a fiduciary or custodian in trust for a	1892
member beneficiary, or a fiduciary or custodian in trust upon the	1893
death of a member. Redemption of such shares or payment of such	1894
share accounts to a member, to the extent of the payment,	1895
discharges the liability of the credit union to the member and the	1896
beneficiary, and the credit union shall be under no obligation to	1897
see to the application of the payment. Unless prior to the death	1898
of a member, the member has notified the credit union in writing	1899
in a form approved by the credit union of a different beneficiary	1900
to receive the proceeds of such shares or share accounts, then the	1901
proceeds shall be paid to the beneficiary or to the beneficiary's	1902
parent or legal representative. Any payment made pursuant to	1903
written instructions of the member or pursuant to the provisions	1904
herein contained shall be a valid and sufficient release and	1905
discharge of the credit union in connection with any such share or	1906
share accounts.	1907

(I)(1) Except as otherwise provided in the articles or	1908
regulations, and subject to the provisions thereof, a minor may	1909
purchase shares, share accounts, or other depository instruments,	1910
and except for qualification as a voting member, the credit union	1911
may deal with the minor with respect to shares, share accounts, or	1912
other depository instruments owned by the minor as if the minor	1913
were a person of legal age.	1914

(2) If shares, share accounts, or other depository	1915
instruments are issued in the name of a minor, redemption of any	1916
part or all of the shares or withdrawal of funds by payment to the	1917
minor of the shares or funds and any declared dividends or	1918
interest releases the credit union from all obligation to the	1919
minor as to the shares reduced or funds withdrawn.	1920

(J) The regulations may require advance written notice of a	1921
member's intention to withdraw the member's shares. Such advance	1922
notice shall not exceed sixty days.	1923

Sec. 1733.30.  (A) A credit union may make any investment of	1924
any funds not required for the purpose of loans or not required to	1925
meet the pledging requirements of Chapter 135. of the Revised	1926
Code, in state or national banks or state or federally chartered	1927
savings and loan associations, savings banks, or credit unions,	1928
doing business in this state; in accounts, deposits, or shares of	1929
federally insured savings and loan associations or savings banks	1930
or insured credit unions, doing business outside this state; in	1931
deposits or accounts of federally insured banks, trust companies,	1932
and mutual savings banks doing business outside this state; in the	1933
shares of a corporate credit union subject to the regulations of	1934
that corporate credit union; in shares, stocks, or obligations of	1935
any other organization providing services that are associated with	1936
the routine operations of credit unions; or in United States	1937
government securities or municipal bonds issued by municipalities	1938
of this state; and, with the approval of the superintendent of	1939
credit unions, in securities other than those specified in this	1940
division. All investments under this division shall be made in	1941
United States dollars.	1942

(B) In accordance with rules adopted by, and subject to the	1943
approval of, the superintendent, notes or loans made by or to	1944
individual members of a credit union may be purchased by another	1945
credit union at such prices as may be agreed upon between the	1946
credit unions.	1947

(C) A corporate credit union may make investments provided	1948
the investments are in accordance with rules adopted by the	1949
superintendent, are consistent with the safety and soundness of	1950
the credit union, and are made with due regard to the investment	1951
requirements established by the applicable insurer recognized	1952
under section 1733.041 of the Revised Code.	1953

Sec. 1733.31.  For purposes of this section, "gross income"	1954
means all income, before expenses, earned on risk assets. "Risk	1955
assets" shall be defined by rule adopted by the superintendent of	1956
credit unions.	1957

Each credit union shall establish and maintain reserves as	1958
required by Chapter 1733. of the Revised Code, by Chapter 135. of	1959
the Revised Code, if applicable, or by rules adopted by the	1960
superintendent, including the following:	1961

(A) Valuation allowances for delinquent loans, investments,	1962
other risk assets, and contingencies, which shall be established	1963
and maintained pursuant to rules adopted adopted by the	1964
superintendent.	1965

(B) A regular reserve as follows:

1966

(1) A credit union in operation for more than four years and	1967
having assets of five hundred thousand dollars or more shall	1968
reserve ten per cent of its gross income until its regular reserve	1969
equals four per cent of its total risk assets. Once the credit	1970
union has regular reserves equal to four per cent of its total	1971
risk assets, it shall reserve five per cent of its gross income	1972
until its regular reserve equals six per cent of its total risk	1973
assets.	1974

(2) A credit union in operation for less than four years or	1975
having assets of less than five hundred thousand dollars shall	1976
reserve ten per cent of its gross income until its regular reserve	1977
equals seven and one-half per cent of its total risk assets. Once	1978
the credit union has regular reserves equal to seven and one-half	1979
per cent of its total risk assets, it shall reserve five per cent	1980
of its gross income until its regular reserve equals ten per cent	1981
of its total risk assets.	1982

(3) The provision for loan losses, or other such provisions	1983
related to the valuation allowances described in division (A) of	1984
this section, recorded on the credit union's statement of income	1985
for the year shall be deducted from the appropriate regular	1986
reserve calculated under division (B)(1) or (2) of this section.	1987

(4) Once the credit union has closed out its net income or	1988
loss to undivided earnings, it may allocate any extraordinary loss	1989
for the year, as defined by AICPA APB Opinion No. 30 or by rules	1990
as promulgated by the superintendent, to the regular reserve.	1991

(5) If the regular reserve account becomes less than the	1992
percentage required by division (B)(1) or (2) of this section,	1993
then the schedule of allocation shall apply until the required	1994
percentages are achieved.	1995

(6) The superintendent may decrease the reserve requirements	1996
under division (B)(1) or (2) of this section when, in the	1997
superintendent's opinion, a decrease is necessary or desirable and	1998
is consistent with the purposes of this section.	1999

(7) Nothing herein shall prevent the superintendent from	2000
requiring a particular credit union or all credit unions to	2001
establish a regular reserve in excess of the percentages required	2002
by division (B)(1) or (2) of this section if, in the opinion of	2003
the superintendent, economic conditions or other appropriate	2004
circumstances so warrant.	2005

(C) Except as otherwise provided in this division, each	2006
credit union shall maintain a liquidity fund equal to five per	2007
cent of its shares. The assets included in the liquidity fund	2008
shall be defined by rule adopted by the superintendent. The	2009
superintendent may require a particular credit union or all credit	2010
unions to establish a liquidity fund greater than or less than	2011
five per cent of total shares, if, in the opinion of the	2012
superintendent, economic conditions or other appropriate	2013
circumstances so warrant.	2014

(D)(1) Reserves for corporate credit unions shall be	2015
established by the superintendent with due regard for the	2016
reserving requirements for corporate credit unions set by the	2017
applicable insurer recognized under section 1733.041 of the	2018
Revised Code. Specific reserving requirements shall be established	2019
by rule of the superintendent, but shall substantially parallel	2020
the reserving formula set by the applicable insurer recognized	2021
under section 1733.041 of the Revised Code.	2022

(2) Nothing in division (D)(1) of this section shall prevent	2023
the superintendent from requiring a particular corporate credit	2024
union or all corporate credit unions to establish a regular	2025
reserve in excess of those reserves established pursuant to	2026
division (D)(1) of this section if, in the opinion of the	2027
superintendent, economic conditions or other appropriate	2028
circumstances so warrant.	2029

Sec. 2909.32.  (A)(1) The director of public safety shall	2030
adopt rules in accordance with Chapter 119. of the Revised Code to	2031
identify licenses the state issues for which a holder with a	2032
connection to a terrorist organization would present a potential	2033
risk to the residents of this state. The rules shall not identify	2034
a renewable driver's license or permit as a license of this nature	2035
if the applicant is a resident of this state.	2036

(2)(a) The director shall prepare a document to serve as a	2037
declaration of material assistance/nonassistance for agencies to	2038
use to identify whether an applicant for a license or the renewal	2039
of a license has provided material assistance to an organization	2040
listed in the United States department of state terrorist	2041
exclusion list. The declaration shall be substantially in the form	2042
and of the same content as set forth in division (A)(2)(b) of this	2043
section. The director shall make the declaration available to each	2044
issuing agency of a license the director identifies pursuant to	2045
division (A)(1) of this section, along with a then-current copy of	2046
the United States department of state terrorist exclusion list.	2047
The director may adopt rules governing the preparation of the	2048
declaration and the distribution of the declaration and the list.	2049

(b) The declaration of material assistance/nonassistance this	2050
section requires shall be substantially as follows and shall	2051
include the following questions and the associated spaces for	2052
answering the questions:	2053

"DECLARATION REGARDING MATERIAL ASSISTANCE/NONASSISTANCE	2054

TO TERRORIST ORGANIZATION	2055

(1) Are you a member of an organization on the U.S.	2056
Department of State Terrorist Exclusion List? Yes .....; No ......	2057

(2) Have you used any position of prominence you have within	2058
any country to persuade others to support an organization on the	2059
U.S. Department of State Terrorist Exclusion List? Yes .....; No	2060
......	2061

(3) Have you knowingly solicited funds or other things of	2062
value for an organization on the U.S. Department of State	2063
Terrorist Exclusion List? Yes .....; No ......	2064

(4) Have you solicited any individual for membership in an	2065
organization on the U.S. Department of State Terrorist Exclusion	2066
List? Yes .....; No ......	2067

(5) Have you committed an act that you know, or reasonably	2068
should have known, affords "material support or resources" (see	2069
below) to an organization on the U.S. Department of State	2070
Terrorist Exclusion List? Yes .....; No ......	2071

(6) Have you hired or compensated a person you knew to be a	2072
member of an organization on the U.S. Department of State	2073
Terrorist Exclusion List or a person you knew to be engaged in	2074
planning, assisting, or carrying out an act of terrorism? Yes	2075
.....; No ......	2076

For purposes of this declaration of material	2077
assistance/nonassistance, "material support or resources" means	2078
currency, payment instruments, other financial securities, funds,	2079
transfer of funds, and financial services that are in excess of	2080
one hundred dollars, as well as communications, lodging, training,	2081
safe houses, false documentation or identification, communications	2082
equipment, facilities, weapons, lethal substances, explosives,	2083
personnel, transportation, and other physical assets, except	2084
medicine or religious materials."	2085

(B)(1) Any agency that issues a license the director	2086
identifies pursuant to division (A)(1) of this section shall	2087
include with the agency's application form a copy of the	2088
declaration of material assistance/nonassistance the director	2089
prepares pursuant to this section and a then-current copy of the	2090
terrorist exclusion list. The agency shall inform applicants that	2091
they must truthfully answer each question.	2092

(2) Any person provided a declaration of material	2093
assistance/nonassistance pursuant to this section shall answer	2094
each question and attach the completed declaration to the	2095
application for the license or the license renewal.	2096

(C)(1) Any answer of "yes" to any question, or the failure to	2097
answer "no" to any question, on a declaration of material	2098
assistance/nonassistance an agency provides pursuant to this	2099
section shall serve for purposes of this section as a disclosure	2100
that the applicant has provided material assistance to an	2101
organization listed on the terrorist exclusion list.	2102

(2) Any person who discloses the provision of material	2103
assistance to any organization on the terrorist exclusion list	2104
shall be denied the license or the renewal of the license unless	2105
the department of public safety reinstates the application	2106
pursuant to division (D) of this section.	2107

(3) Any licensing entity that denies a license or a renewal	2108
of a license pursuant to this division shall send written notice	2109
of that denial to the applicant within three business days of the	2110
decision to deny. The notice shall inform the applicant of the	2111
right to have the department of public safety review the denial if	2112
the applicant requests a review within sixty days after the	2113
mailing date of the notice. The licensing entity shall provide the	2114
department of public safety with a copy of any notice that it	2115
sends to an applicant pursuant to this division.	2116

(D) The department of public safety shall review any decision	2117
to deny an application within thirty days of receiving an	2118
applicant's request for a review. The department shall reinstate	2119
the license application for good cause if it determines all of the	2120
following pursuant to guidelines the director adopts by rule:	2121

(1) That the provision of material assistance to an	2122
organization on the terrorist exclusion list was made more than	2123
ten years prior to the time of the application, or the applicant	2124
provided material assistance during the ten years prior to the	2125
application and the date of the review, but at the time of the	2126
assistance, the organization was either not on the list or was not	2127
involved in any activity or conduct that would have merited	2128
inclusion on the list had it existed at the time, or at the time	2129
of the assistance it was not reasonable to know of the	2130
organization's activities that would have merited its inclusion on	2131
the list.	2132

(2) That the applicant is unlikely in the future to provide	2133
material assistance to any organization on the terrorist exclusion	2134
list;	2135

(3) That the applicant does not pose a risk to the residents	2136
of this state.	2137

(E) The failure of an applicant for a license to complete and	2138
attach a declaration of material assistance/nonassistance as this	2139
section requires, the failure to disclose material assistance to	2140
an organization on the terrorist exclusion list, or the making of	2141
false statements regarding material assistance to an organization	2142
the applicant knew or should have known was on the terrorist	2143
exclusion list, shall result in the denial of the application and	2144
in the revocation of the license.	2145

(F) The failure of an applicant for a license to disclose, as	2146
this section requires, the provision of material assistance to an	2147
organization on the terrorist exclusion list or knowingly making	2148
false statements regarding material assistance to an organization	2149
on that list is a felony of the fifth degree.	2150

(G) An issuing agency shall notify the department of public	2151
safety if it denies an application for a license or the renewal of	2152
a license because the applicant disclosed the provision of	2153
material assistance to an organization listed on the terrorist	2154
exclusion list.	2155

(H) An agency may revoke a license issued to any person who,	2156
after providing a declaration of material assistance/nonassistance	2157
pursuant to this section, takes an action that would result in	2158
"yes" being the correct answer to any question on the declaration,	2159
had the declaration been readministered after taking that action.	2160
The agency shall conduct a hearing pursuant to Chapter 119. of the	2161
Revised Code prior to revoking any license pursuant to this	2162
division.	2163

(I) This section does not apply to a license issued to either	2164
any of the following:	2165

(1) A federally insured depository institution that is	2166
subject to anti-money laundering and antiterrorism requirements	2167
under federal law, any subsidiary of such a depository	2168
institution, or an officer or employee of such a depository	2169
institution or subsidiary when that license is related to the	2170
person's duties as an officer or employee;	2171

(2) Any affiliate of a depository institution described in	2172
division (I)(1) of this section, other than an affiliate that is a	2173
subsidiary of a depository institution, when that affiliate is	2174
subject to anti-money laundering and antiterrorism requirements	2175
under federal law, or an officer or employee of such an affiliate	2176
when that license is related to the person's duties as an officer	2177
or employee;	2178

(3) A credit union insured by the national credit union	2179
administration or by a credit union share guaranty corporation as	2180
defined in section 1761.01 of the Revised Code, that is subject to	2181
anti-money laundering and antiterrorism requirements under federal	2182
law, or an officer or employee of such a credit union when that	2183
license is related to the person's duties as an officer or	2184
employee;	2185

(4) A farm credit system institution insured by the farm	2186
credit system insurance corporation that is subject to anti-money	2187
laundering and antiterrorism requirements under federal law, or an	2188
officer or employee of such an institution when that license is	2189
related to the person's duties as an officer or employee.	2190

Sec. 2909.33. (A)(1) The director of public safety shall	2191
prepare a document to serve as a declaration of material	2192
assistance/nonassistance by which any person, company, affiliated	2193
group, or organization, or person who holds, owns, or otherwise	2194
has a controlling interest in a company, affiliated group, or	2195
organization, when required by this section, shall certify any	2196
provision of material assistance to an organization listed on the	2197
United States department of state terrorist exclusion list. The	2198
declaration shall be substantially in the same format and of the	2199
same content as set forth in division (A)(2)(b) of section 2909.32	2200
of the Revised Code.	2201

(2) The director of public safety and the director of budget	2202
and management shall make available on their respective department	2203
web sites and by any other means the director of public safety	2204
deems appropriate, the declaration of material	2205
assistance/nonassistance and a then-current copy of the terrorist	2206
exclusion list. The director of public safety, in consultation	2207
with the director of budget and management, may adopt rules that	2208
govern the preparation of the declaration and the distribution of	2209
the declaration and terrorist exclusion list.	2210

(3)(a) Prior to entering into a contract to conduct business	2211
with or receive funding from any state agency, instrumentality, or	2212
political subdivision of the state any person, company, affiliated	2213
group, or organization, or person who holds, owns, or otherwise	2214
has a controlling interest in a company, affiliated group, or	2215
organization, may precertify that it has not provided material	2216
assistance to an organization on the terrorist exclusion list. The	2217
precertification this division describes shall be granted to any	2218
person, company, affiliated group, or organization that submits to	2219
the director of budget and management a completed copy of the	2220
declaration prepared pursuant to this section, with an answer of	2221
"no" to all questions. No person shall require any person,	2222
company, affiliated group, or organization that is precertified to	2223
complete any additional declarations prior to the expiration of a	2224
precertification. All precertifications expire the thirtieth day	2225
of June of the second year of each state biennium period. To be	2226
precertified during the two years subsequent to that expiration	2227
date, an entity shall submit a new declaration to the director of	2228
budget and management pursuant to rules the director adopts.	2229

(b) Any person, company, affiliated group, or organization	2230
that is precertified pursuant to this division and that takes any	2231
action or learns of anything that would result in an answer of	2232
"yes" to any question on the declaration of material	2233
assistance/nonassistance this division requires, shall cease to	2234
represent that it is precertified and, within thirty days of	2235
taking that action or learning the new information, shall notify	2236
the director of budget and management to request its	2237
precertification be rescinded.	2238

(c) When applying for a contract, falsely representing	2239
precertification, or representing precertification when that	2240
precertification has been rescinded or should have been rescinded	2241
pursuant to this division, is a felony of the fifth degree.	2242

(B) Any person who submits a declaration of material	2243
assistance/nonassistance pursuant to this section shall complete	2244
the entire declaration. Any answer of "yes" to any question, or	2245
the failure to answer "no" to any question, on the declaration	2246
shall serve for purposes of this section as a disclosure of the	2247
provision of material assistance to an organization that is listed	2248
on the terrorist exclusion list.	2249

(C)(1) Except as otherwise provided in divisions (C)(2) and	2250
(H) of this section, prior to entering into a contract with any	2251
state agency, instrumentality, or political subdivision to conduct	2252
business or receive funding, any person, company, affiliated	2253
group, or organization, and any person who holds, owns, or	2254
otherwise has a controlling interest in a company, affiliated	2255
group, or organization shall certify that it does not provide	2256
material assistance to any organization on the United States	2257
department of state terrorist exclusion list. The certification	2258
shall be made by completing and submitting the declaration of	2259
material assistance/nonassistance as described in division (A) of	2260
this section.	2261

(2) Certification pursuant to this division shall not be	2262
required unless the entity entering into a contract for business	2263
or funding has received, or will have received as a result of the	2264
pending contract, an aggregate amount greater than one hundred	2265
thousand dollars in business or funding, excluding the amount of	2266
any personal benefit, from the state, instrumentalities, and	2267
political subdivisions during the current fiscal year, measured	2268
from the first day of July until the thirtieth day of June.	2269

(D)(1) No state agency, instrumentality, or political	2270
subdivision shall conduct business with or provide any funding to	2271
any person, company, affiliated group or organization, or any	2272
person who has a controlling interest in a company, affiliated	2273
group, or organization unless that person, company, affiliated	2274
group, or organization is certified as this section requires.	2275

(2) No person, company, affiliated group or organization, or	2276
any person who holds, owns, or otherwise has a controlling	2277
interest in a company, affiliated group, or organization shall	2278
enter into a contract to conduct business with or receive funding	2279
from the state, an agency or instrumentality of the state, or a	2280
political subdivision of the state unless it is certified as this	2281
section requires.	2282

(E) For the purposes of this section, the office of budget	2283
and management shall be the repository for all declarations	2284
received pursuant to division (A)(3)(a) of this section and the	2285
director of budget and management shall maintain a centralized	2286
database of all such declarations received. If a person, company,	2287
affiliated group, or organization discloses the provision of	2288
material assistance to an organization listed on the terrorist	2289
exclusion list, within three business days of that disclosure, the	2290
director shall send the declarant a written notice of prohibition	2291
against doing business or receiving funding. The notice shall	2292
inform the declarant of the right to a review of the prohibition	2293
by the department of public safety if the declarant requests that	2294
review within sixty days after the notice of prohibition was	2295
mailed. The director shall send copy of any notice sent pursuant	2296
to this division to the department of public safety.	2297

The department of public safety shall review any prohibition	2298
within thirty days of the receipt of a request for a review and	2299
determine whether the prohibitions against doing business or	2300
receiving funding set forth in divisions (D)(1) and (D)(2) of this	2301
section should apply. The department of public safety shall order	2302
that the prohibitions do not apply if it determines all of the	2303
following pursuant to guidelines the director adopts by rule:	2304

(1) That the provision of material assistance to an	2305
organization on the terrorist exclusion list was made more than	2306
ten years prior to the time the declaration of material	2307
assistance/nonassistance was filled out, or the material	2308
assistance was provided during the ten years prior to the	2309
application and the date of the review, but at the time of the	2310
assistance, the organization was either not on the list or would	2311
not have merited inclusion had it existed at the time, or at the	2312
time of the assistance it was not reasonable to know of the	2313
organization's activities that would have merited its inclusion on	2314
the list.	2315

(2) That it is unlikely in the future that the person,	2316
company, affiliated group, or organization will provide material	2317
assistance to any organization on the terrorist exclusion list;	2318

(3) The person, company, affiliated group, or organization	2319
does not pose a risk to the residents of this state.	2320

(F) Any person, company, affiliated group, or organization	2321
that had not provided material assistance at the time a	2322
declaration of material assistance/nonassistance was answered, but	2323
starts providing material assistance to an organization on the	2324
terrorist exclusion list during the course of doing business with	2325
or receiving funding from the state, an agency or instrumentality	2326
of the state, or a subdivision of the state, is prohibited from	2327
entering into additional contracts to do business with or receive	2328
funding from the state, any agency or instrumentality, or any	2329
subdivision for a period of ten years after the provision of	2330
material assistance is discovered.	2331

(G)(1) Any person, company, affiliated group, or organization	2332
that knowingly provides a false certification pursuant to this	2333
section is permanently banned from conducting business with or	2334
receiving funding from the state, an agency or instrumentality of	2335
the state, or a political subdivision of the state is guilty of a	2336
felony of the fifth degree.	2337

(2) Any person, company, affiliated group, or organization	2338
that fails to certify as this section requires is subject to a	2339
fine of one thousand dollars for each day of doing business or	2340
receiving funding, except that any person, company, affiliated	2341
group, or organization that first reaches the threshold of one	2342
hundred thousand dollars in business or funding, due to the	2343
contract that it is entering into, shall not be subject to the	2344
fine for the first thirty days after entering into that contract,	2345
after which it shall be subject to the fine for each day that it	2346
is not certified.	2347

(H) This section does not apply to the following types of	2348
transactions:	2349

(1) An investment in a company that is publicly traded in any	2350
United States market;	2351

(2) An investment that is traded on a foreign market where	2352
United States investors regularly make investments;	2353

(3) An investment that is made through an agent or investment	2354
manager who has a fiduciary responsibility to the investor;	2355

(4) An investment in public agency debt;

2356

(5) An investment in derivatives that are regulated by a	2357
government agency;	2358

(6) Financial services provided by or through eitherany of	2359
the following:	2360

(a) A federally insured depository institution that is	2361
subject to anti-money laundering and antiterrorism requirements	2362
under federal law or any subsidiary of such a depository	2363
institution;	2364

(b) An affiliate of a depository institution described in	2365
division (H)(6)(a) of this section, other than an affiliate that	2366
is a subsidiary of the depository institution, when the affiliate	2367
is subject to anti-money laundering and antiterrorism requirements	2368
under federal law;	2369

(c) A credit union insured by the national credit union	2370
administration or by a credit union share guaranty corporation as	2371
defined in section 1761.01 of the Revised Code, that is subject to	2372
anti-money laundering and antiterrorism requirements under federal	2373
law;	2374

(d) A farm credit system institution insured by the farm	2375
credit system insurance corporation that is subject to anti-money	2376
laundering and antiterrorism requirements under federal law.	2377

"Financial services" include, but are not limited to,	2378
services related to currency, payment instruments, other financial	2379
securities, funds, and transfer of funds;	2380

(7) Any contract to conduct business or receive funding	2381
between state agencies, instrumentalities, or political	2382
subdivisions of the state;	2383

(8) Any person, company, affiliated group, or organization	2384
providing necessary, nonelective healthcare services.	2385

(I) As used in this section, "personal benefit" means all of	2386
the following:	2387

(1) Pensions and disability and survivor benefits;

2388

(2) Money, goods, services, or other things of value provided	2389
by the United States, the state, or a political subdivision of the	2390
state to which the recipient is entitled by reason of age, medical	2391
condition, or a financial need that is established pursuant to an	2392
act of congress or the general assembly;	2393

(3) Salary or compensation a person receives as an employee	2394
of the state or a political subdivision of the state.	2395

Section 2. That existing sections 122.60, 122.71, 135.03,	2396
135.032, 135.04, 135.06, 135.08, 135.10, 135.14, 135.144, 135.18,	2397
135.32, 135.321, 135.33, 135.35, 135.353, 135.37, 135.51, 135.52,	2398
135.53, 1733.04, 1733.041, 1733.24, 1733.30, 1733.31, 2909.32, and	2399
2909.33 of the Revised Code are hereby repealed.	2400

Section 3.  Section 135.14 of the Revised Code is presented	2401
in this act as a composite of the section as amended by both Sub.	2402
H.B. 473 and Am. Sub. H.B. 640 of the 123rd General Assembly. The	2403
General Assembly, applying the principle stated in division (B) of	2404
section 1.52 of the Revised Code that amendments are to be	2405
harmonized if reasonably capable of simultaneous operation, finds	2406
that the composite is the resulting version of the section in	2407
effect prior to the effective date of the section as presented in	2408
this act.	2409