(2) Bonds, notes, debentures, or any other obligations or | 28 |
securities issued by any federal government agency or | 29 |
instrumentality, including but not limited to, the federal | 30 |
national mortgage association, federal home loan bank, federal | 31 |
farm credit bank, federal home loan mortgage corporation, and | 32 |
government national mortgage association, and student loan | 33 |
marketing association. All federal agency securities shall be | 34 |
direct issuances of federal government agencies or | 35 |
instrumentalities. | 36 |
(3) Interim deposits in the eligible institutions applying | 37 |
for interim moneys as provided in section 135.08 of the Revised | 38 |
Code. The award of interim deposits shall be made in accordance | 39 |
with section 135.09 of the Revised Code and the treasurer or the | 40 |
governing board shall determine the periods for which such interim | 41 |
deposits are to be made and shall award such interim deposits for | 42 |
such periods, provided that any eligible institution receiving an | 43 |
interim deposit award may, upon notification that the award has | 44 |
been made, decline to accept the interim deposit in which event | 45 |
the award shall be made as though the institution had not applied | 46 |
for such interim deposit. | 47 |
(C) Nothing in the classifications of eligible obligations | 110 |
set forth in divisions (B)(1) to (7) of this section shall be | 111 |
construed to authorize any investment in a derivative, and no | 112 |
treasurer or governing board shall invest in a derivative. For | 113 |
purposes of this division, "derivative" means a financial | 114 |
instrument or contract or obligation whose value or return is | 115 |
based upon or linked to another asset or index, or both, separate | 116 |
from the financial instrument, contract, or obligation itself. Any | 117 |
security, obligation, trust account, or other instrument that is | 118 |
created from an issue of the United States treasury or is created | 119 |
from an obligation of a federal agency or instrumentality or is | 120 |
created from both is considered a derivative instrument. An | 121 |
eligible investment described in this section with a variable | 122 |
interest rate payment, based upon a single interest payment or | 123 |
single index comprised of other eligible investments provided for | 124 |
in division (B)(1) or (2) of this section, is not a derivative, | 125 |
provided that such variable rate investment has a maximum maturity | 126 |
of two years. | 127 |
(E) The treasurer or governing board may also enter into a | 132 |
written repurchase agreement with any eligible institution | 133 |
mentioned in section 135.03 of the Revised Code or any eligible | 134 |
dealer pursuant to division (M) of this section, under the terms | 135 |
of which agreement the treasurer or governing board purchases, and | 136 |
such institution or dealer agrees unconditionally to repurchase | 137 |
any of the securities listed in divisions (B)(1) to (5), except | 138 |
letters of credit described in division (B)(2), of section 135.18 | 139 |
of the Revised Code. The market value of securities subject to an | 140 |
overnight written repurchase agreement must exceed the principal | 141 |
value of the overnight written repurchase agreement by at least | 142 |
two per cent. A written repurchase agreement shall not exceed | 143 |
thirty days and the market value of securities subject to a | 144 |
written repurchase agreement must exceed the principal value of | 145 |
the written repurchase agreement by at least two per cent and be | 146 |
marked to market daily. All securities purchased pursuant to this | 147 |
division shall be delivered into the custody of the treasurer or | 148 |
governing board or an agent designated by the treasurer or | 149 |
governing board. A written repurchase agreement with an eligible | 150 |
securities dealer shall be transacted on a delivery versus payment | 151 |
basis. The agreement shall contain the requirement that for each | 152 |
transaction pursuant to the agreement the participating | 153 |
institution or dealer shall provide all of the following | 154 |
information: | 155 |
(H) The use of leverage, in which the treasurer or governing | 183 |
board uses its current investment assets as collateral for the | 184 |
purpose of purchasing other assets, is prohibited. The issuance of | 185 |
taxable notes for the purpose of arbitrage is prohibited. | 186 |
Contracting to sell securities that have not yet been acquired by | 187 |
the treasurer or governing board, for the purpose of purchasing | 188 |
such securities on the speculation that bond prices will decline, | 189 |
is prohibited. | 190 |
(I) Whenever, during a period of designation, the treasurer | 191 |
classifies public moneys as interim moneys, the treasurer shall | 192 |
notify the governing board of such action. The notification shall | 193 |
be given within thirty days after such classification and in the | 194 |
event the governing board does not concur in such classification | 195 |
or in the investments or deposits made under this section, the | 196 |
governing board may order the treasurer to sell or liquidate any | 197 |
of such investments or deposits, and any such order shall | 198 |
specifically describe the investments or deposits and fix the date | 199 |
upon which they are to be sold or liquidated. Investments or | 200 |
deposits so ordered to be sold or liquidated shall be sold or | 201 |
liquidated for cash by the treasurer on the date fixed in such | 202 |
order at the then current market price. Neither the treasurer nor | 203 |
the members of the board shall be held accountable for any loss | 204 |
occasioned by sales or liquidations of investments or deposits at | 205 |
prices lower than their cost. Any loss or expense incurred in | 206 |
making such sales or liquidations is payable as other expenses of | 207 |
the treasurer's office. | 208 |
(J) If any investments or deposits purchased under the | 209 |
authority of this section are issuable to a designated payee or to | 210 |
the order of a designated payee, the name of the treasurer and the | 211 |
title of the treasurer's office shall be so designated. If any | 212 |
such securities are registrable either as to principal or | 213 |
interest, or both, then such securities shall be registered in the | 214 |
name of the treasurer as such. | 215 |
(K) The treasurer is responsible for the safekeeping of all | 216 |
documents evidencing a deposit or investment acquired by the | 217 |
treasurer under this section. Any securities may be deposited for | 218 |
safekeeping with a qualified trustee as provided in section 135.18 | 219 |
of the Revised Code, except the delivery of securities acquired | 220 |
under any repurchase agreement under this section shall be made to | 221 |
a qualified trustee, provided, however, that the qualified trustee | 222 |
shall be required to report to the treasurer, governing board, | 223 |
auditor of state, or an authorized outside auditor at any time | 224 |
upon request as to the identity, market value, and location of the | 225 |
document evidencing each security, and that if the participating | 226 |
institution is a designated depository of the subdivision for the | 227 |
current period of designation, the securities that are the subject | 228 |
of the repurchase agreement may be delivered to the treasurer or | 229 |
held in trust by the participating institution on behalf of the | 230 |
subdivision. Interest earned on any investments or deposits | 231 |
authorized by this section shall be collected by the treasurer and | 232 |
credited by the treasurer to the proper fund of the subdivision. | 233 |
Upon the expiration of the term of office of a treasurer or | 234 |
in the event of a vacancy in the office of treasurer by reason of | 235 |
death, resignation, removal from office, or otherwise, the | 236 |
treasurer or the treasurer's legal representative shall transfer | 237 |
and deliver to the treasurer's successor all documents evidencing | 238 |
a deposit or investment held by the treasurer. For the investments | 239 |
and deposits so transferred and delivered, such treasurer shall be | 240 |
credited with and the treasurer's successor shall be charged with | 241 |
the amount of money held in such investments and deposits. | 242 |
(M)(1) All investments, except for investments in securities | 249 |
described in divisions (B)(5) and (6) of this section and for | 250 |
investments by a municipal corporation in the issues of such | 251 |
municipal corporation, shall be made only through a member of the | 252 |
national association of securities dealersfinancial industry | 253 |
regulatory authority (FINRA), through a bank, savings bank, or | 254 |
savings and loan association regulated by the superintendent of | 255 |
financial institutions, or through an institution regulated by the | 256 |
comptroller of the currency, federal deposit insurance | 257 |
corporation, or board of governors of the federal reserve system. | 258 |
(2) Payment for investments shall be made only upon the | 259 |
delivery of securities representing such investments to the | 260 |
treasurer, governing board, or qualified trustee. If the | 261 |
securities transferred are not represented by a certificate, | 262 |
payment shall be made only upon receipt of confirmation of | 263 |
transfer from the custodian by the treasurer, governing board, or | 264 |
qualified trustee. | 265 |
(N) In making investments authorized by this section, a | 266 |
treasurer or governing board may retain the services of an | 267 |
investment advisor, provided the advisor is licensed by the | 268 |
division of securities under section 1707.141 of the Revised Code | 269 |
or is registered with the securities and exchange commission, and | 270 |
possesses experience in public funds investment management, | 271 |
specifically in the area of state and local government investment | 272 |
portfolios, or the advisor is an eligible institution mentioned in | 273 |
section 135.03 of the Revised Code. | 274 |
(O)(1) Except as otherwise provided in divisions (O)(2) and | 275 |
(3) of this section, no treasurer or governing board shall make an | 276 |
investment or deposit under this section, unless there is on file | 277 |
with the auditor of state a written investment policy approved by | 278 |
the treasurer or governing board. The policy shall require that | 279 |
all entities conducting investment business with the treasurer or | 280 |
governing board shall sign the investment policy of that | 281 |
subdivision. All brokers, dealers, and financial institutions, | 282 |
described in division (M)(1) of this section, initiating | 283 |
transactions with the treasurer or governing board by giving | 284 |
advice or making investment recommendations shall sign the | 285 |
treasurer's or governing board's investment policy thereby | 286 |
acknowledging their agreement to abide by the policy's contents. | 287 |
All brokers, dealers, and financial institutions, described in | 288 |
division (M)(1) of this section, executing transactions initiated | 289 |
by the treasurer or governing board, having read the policy's | 290 |
contents, shall sign the investment policy thereby acknowledging | 291 |
their comprehension and receipt. | 292 |
(2) If a written investment policy described in division | 293 |
(O)(1) of this section is not filed on behalf of the subdivision | 294 |
with the auditor of state, the treasurer or governing board of | 295 |
that subdivision shall invest the subdivision's interim moneys | 296 |
only in interim deposits pursuant to division (B)(3) of this | 297 |
section or interim deposits pursuant to section 135.145 of the | 298 |
Revised Code and approved by the treasurer of state, no-load money | 299 |
market mutual funds pursuant to division (B)(5) of this section, | 300 |
or the Ohio subdivision's fund pursuant to division (B)(6) of this | 301 |
section. | 302 |
(3) Divisions (O)(1) and (2) of this section do not apply to | 303 |
a treasurer or governing board of a subdivision whose average | 304 |
annual portfolio of investments held pursuant to this section is | 305 |
one hundred thousand dollars or less, provided that the treasurer | 306 |
or governing board certifies, on a form prescribed by the auditor | 307 |
of state, that the treasurer or governing board will comply and is | 308 |
in compliance with the provisions of sections 135.01 to 135.21 of | 309 |
the Revised Code. | 310 |
(P) A treasurer or governing board may enter into a written | 311 |
investment or deposit agreement that includes a provision under | 312 |
which the parties agree to submit to nonbinding arbitration to | 313 |
settle any controversy that may arise out of the agreement, | 314 |
including any controversy pertaining to losses of public moneys | 315 |
resulting from investment or deposit. The arbitration provision | 316 |
shall be set forth entirely in the agreement, and the agreement | 317 |
shall include a conspicuous notice to the parties that any party | 318 |
to the arbitration may apply to the court of common pleas of the | 319 |
county in which the arbitration was held for an order to vacate, | 320 |
modify, or correct the award. Any such party may also apply to the | 321 |
court for an order to change venue to a court of common pleas | 322 |
located more than one hundred miles from the county in which the | 323 |
treasurer or governing board is located. | 324 |
For purposes of this division, "investment or deposit | 325 |
agreement" means any agreement between a treasurer or governing | 326 |
board and a person, under which agreement the person agrees to | 327 |
invest, deposit, or otherwise manage a subdivision's interim | 328 |
moneys on behalf of the treasurer or governing board, or agrees to | 329 |
provide investment advice to the treasurer or governing board. | 330 |
(Q) An investment made by the treasurer or governing board | 331 |
pursuant to this section prior to September 27, 1996, that was a | 332 |
legal investment under the law as it existed before September 27, | 333 |
1996, may be held until maturity, or if the investment does not | 334 |
have a maturity date, it may be held until five years from | 335 |
September 27, 1996, regardless of whether the investment would | 336 |
qualify as a legal investment under the terms of this section as | 337 |
amended. | 338 |
Sec. 135.142. (A) In addition to the investments authorized | 339 |
by section 135.14 of the Revised Code, any board of education, by | 340 |
a two-thirds vote of its members, may authorize the treasurer of | 341 |
the board of education to invest up to twenty-fiveforty per cent | 342 |
of the interim moneys of the board, available for investment at | 343 |
any one time, in either of the following: | 344 |
(B) No investment authorized pursuant to division (A) of this | 368 |
section shall be made, whether or not authorized by a board of | 369 |
education, unless the treasurer of the board of education has | 370 |
completed additional training for making the types of investments | 371 |
authorized pursuant to division (A) of this section. The type and | 372 |
amount of such training shall be approved and may be conducted by | 373 |
or provided under the supervision of the auditortreasurer of | 374 |
state. | 375 |
(C) The treasurer of the board of education shall prepare | 376 |
annually and submit to the board of education, the superintendent | 377 |
of public instruction, and the auditor of state, on or before the | 378 |
thirty-first day of August, a report listing each investment made | 379 |
pursuant to division (A) of this section during the preceding | 380 |
fiscal year, income earned from such investments, fees and | 381 |
commissions paid pursuant to division (D) of this section, and any | 382 |
other information required by the board, the superintendent, and | 383 |
the auditor of state. | 384 |
(E)(1) In addition to the investments authorized by section | 388 |
135.14 of the Revised Code and division (A) of this section, any | 389 |
board of education that is a party to an agreement with the | 390 |
treasurer of state pursuant to division (G) of section 135.143 of | 391 |
the Revised Code and that has outstanding obligations issued under | 392 |
authority of section 133.10 or 133.301 of the Revised Code may | 393 |
authorize the treasurer of the board of education to invest | 394 |
interim moneys of the board in debt interests rated in either of | 395 |
the two highest rating classifications by at least two nationally | 396 |
recognized standard rating agenciesservices and issued by | 397 |
entities that are defined in division (D) of section 1705.01 of | 398 |
the Revised Code. The debt interests purchased under authority of | 399 |
division (E) of this section shall mature not later than the | 400 |
latest maturity date of the outstanding obligations issued under | 401 |
authority of section 133.10 or 133.301 of the Revised Code. | 402 |
(2) If any of the debt interests acquired under division | 403 |
(E)(1) of this section ceases to be rated as there required, its | 404 |
issuer shall notify the treasurer of state of this fact within | 405 |
twenty-four hours. At any time thereafter the treasurer of state | 406 |
may require collateralization at the rate of one hundred two per | 407 |
cent of any remaining obligation of the entity, with securities | 408 |
authorized for investment under section 135.143 of the Revised | 409 |
Code. The collateral shall be delivered to and held by a custodian | 410 |
acceptable to the treasurer of state, marked to market daily, and | 411 |
any default to be cured within twelve hours. Unlimited | 412 |
substitution shall be allowed of comparable securities. | 413 |
(3)(a) Bonds, notes, and other direct obligations of the | 424 |
state of Ohio, including, but not limited to, any obligations | 425 |
issued by the treasurer of state and of, the Ohio public | 426 |
facilities commission, the Ohio building authority, and the Ohio | 427 |
housing finance agency, the Ohio water development authority, and | 428 |
the Ohio turnpike infrastructure commission; | 429 |
(b) Bonds, notes, and other obligations of any state or | 430 |
political subdivision thereof rated in the three highest | 431 |
categories by at least one nationally recognized standard rating | 432 |
service and purchased through a registered securities broker or | 433 |
dealer, provided the treasurer of state is not the sole purchaser | 434 |
of the bonds, notes, or other obligations at original issuance. | 435 |
(4)(a) Written repurchase agreements with any eligible Ohio | 436 |
financial institution that is a member of the federal reserve | 437 |
system or federal home loan bank, or any recognizedregistered | 438 |
United States government securities dealer, under the terms of | 439 |
which agreement the treasurer of state purchases and the eligible | 440 |
financial institution or dealer agrees unconditionally to | 441 |
repurchase any of the securities that are listed in division | 442 |
(A)(1), (2), or (6) of this section and that will mature or are | 443 |
redeemable within ten years from the date of purchase. The market | 444 |
value of securities subject to these transactions must exceed the | 445 |
principal value of the repurchase agreement by an amount specified | 446 |
by the treasurer of state, and the securities must be delivered | 447 |
into the custody of the treasurer of state or the qualified | 448 |
trustee or agent designated by the treasurer of state. The | 449 |
agreement shall contain the requirement that for each transaction | 450 |
pursuant to the agreement, the participating institution or dealer | 451 |
shall provide all of the following information: | 452 |
(b) The treasurer of state also may sell any securities, | 457 |
listed in division (A)(1), (2), or (6) of this section, regardless | 458 |
of maturity or time of redemption of the securities, under the | 459 |
same terms and conditions for repurchase, provided that the | 460 |
securities have been fully paid for and are owned by the treasurer | 461 |
of state at the time of the sale. | 462 |
(5) Securities lending agreements with any eligible financial | 463 |
institution that is a member of the federal reserve system or | 464 |
federal home loan bank or any recognized United States government | 465 |
securities dealer, under the terms of which agreements the | 466 |
treasurer of state lends securities and the eligible financial | 467 |
institution or dealer agrees to simultaneously exchange similar | 468 |
securities or cash, equal value for equal value. | 469 |
(6) Various forms of commercial paper issued by any | 476 |
corporationentity that is incorporatedorganized under the laws | 477 |
of the United States or a state, which notes are rated at the time | 478 |
of purchase in the two highest categories by two nationally | 479 |
recognized standard rating
agenciesservices, provided that the | 480 |
total amount invested under this section in any commercial paper | 481 |
at any time shall not exceed
twenty-fiveforty per cent of the | 482 |
state's total average portfolio, as determined and calculated by | 483 |
the treasurer of state; | 484 |
(10) Debt interests, other than commercial paper described in | 500 |
division (A)(6) of this section, rated at the time of purchase in | 501 |
the three highest categories by two nationally recognized standard | 502 |
rating
agenciesservices and issued by corporationsentities that | 503 |
are incorporatedorganized under the laws of the United States or | 504 |
a state, or issued by foreign nations diplomatically recognized by | 505 |
the United States government, or any instrument based on, derived | 506 |
from, or related to such interests, provided that: | 507 |
(B) Whenever, during a period of designation, the treasurer | 548 |
of state classifies public moneys as interim moneys, the treasurer | 549 |
of state shall notify the state board of deposit of such action. | 550 |
The notification shall be given within thirty days after such | 551 |
classification and, in the event the state board of deposit does | 552 |
not concur in such classification or in the investments or | 553 |
deposits made under this section, the board may order the | 554 |
treasurer of state to sell or liquidate any of the investments or | 555 |
deposits, and any such order shall specifically describe the | 556 |
investments or deposits and fix the date upon which they are to be | 557 |
sold or liquidated. Investments or deposits so ordered to be sold | 558 |
or liquidated shall be sold or liquidated for cash by the | 559 |
treasurer of state on the date fixed in such order at the then | 560 |
current market price. Neither the treasurer of state nor the | 561 |
members of the state board of deposit shall be held accountable | 562 |
for any loss occasioned by sales or liquidations of investments or | 563 |
deposits at prices lower than their cost. Any loss or expense | 564 |
incurred in making these sales or liquidations is payable as other | 565 |
expenses of the treasurer's office. | 566 |
(2) The payment by the political subdivision to the treasurer | 594 |
of state of a reasonable fee as consideration for the agreement of | 595 |
the treasurer of state to purchase those obligations; provided, | 596 |
however, that the treasurer of state shall not be authorized to | 597 |
enter into any such agreement with a board of education of a | 598 |
school district that has an outstanding obligation with respect to | 599 |
a loan received under authority of section 3313.483 of the Revised | 600 |
Code. | 601 |
(H) For purposes of division (G) of this section, a fee shall | 602 |
not be considered reasonable unless it is set to recover only the | 603 |
direct costs, a reasonable estimate of the indirect costs | 604 |
associated with the purchasing of obligations of a political | 605 |
subdivision under division (G) of this section and any reselling | 606 |
of the obligations or any interest in the obligations, including | 607 |
interests in a fund comprised of the obligations, and the | 608 |
administration thereof. No money from the general revenue fund | 609 |
shall be used to subsidize the purchase or resale of these | 610 |
obligations. | 611 |
(2) Bonds, notes, debentures, or any other obligations or | 640 |
securities issued by any federal government agency or | 641 |
instrumentality, including, but not limited to, the federal | 642 |
national mortgage association, federal home loan bank, federal | 643 |
farm credit bank, federal home loan mortgage corporation, and | 644 |
government national mortgage association, and student loan | 645 |
marketing association. All federal agency securities shall be | 646 |
direct issuances of federal government agencies or | 647 |
instrumentalities. | 648 |
(5) No-load money market mutual funds rated in the highest | 655 |
category at the time of purchase by at least one nationally | 656 |
recognized standard rating service or consisting exclusively of | 657 |
obligations described in division (A)(1) or, (2), or (6) of this | 658 |
section 135.143 of the Revised Code and repurchase agreements | 659 |
secured by such obligations, provided that investments in | 660 |
securities described in this division are made only through | 661 |
eligible institutions mentioned in section 135.32 of the Revised | 662 |
Code; | 663 |
(7) Securities lending agreements with any eligible | 666 |
institution mentioned in section 135.32 of the Revised Code that | 667 |
is a member of the federal reserve system or federal home loan | 668 |
bank or with any recognized United States government securities | 669 |
dealer meeting the description in division (J)(1) of this section, | 670 |
under the terms of which agreements the investing authority lends | 671 |
securities and the eligible institution or dealer agrees to | 672 |
simultaneously exchange similar securities or cash, equal value | 673 |
for equal value. | 674 |
The investing authority shall invest under division | 734 |
(A)(11)(10) of this section in a debt interest issued by a foreign | 735 |
nation only if the debt interest is backed by the full faith and | 736 |
credit of that foreign nation, there is no prior history of | 737 |
default, and the debt interest matures not later than five years | 738 |
after purchase. For purposes of division (A)(11)(10) of this | 739 |
section, a debt interest is rated in the three highest categories | 740 |
by two nationally recognized standard rating services if either | 741 |
the debt interest itself or the issuer of the debt interest is | 742 |
rated, or is implicitly rated, at the time of purchase in the | 743 |
three highest categories by two nationally recognized standard | 744 |
rating services. | 745 |
(12)(11) A current unpaid or delinquent tax line of credit | 746 |
authorized under division (G) of section 135.341 of the Revised | 747 |
Code, provided that all of the conditions for entering into such a | 748 |
line of credit under that division are satisfied, or bonds and | 749 |
other obligations of a county land reutilization corporation | 750 |
organized under Chapter 1724. of the Revised Code, if the county | 751 |
land reutilization corporation is located wholly or partly within | 752 |
the same county as the investing authority. | 753 |
(B) Nothing in the classifications of eligible obligations | 754 |
and securities set forth in divisions (A)(1) to (11)(10) of this | 755 |
section shall be construed to authorize investment in a | 756 |
derivative, and no investing authority shall invest any county | 757 |
inactive moneys or any moneys in a county public library fund in a | 758 |
derivative. For purposes of this division, "derivative" means a | 759 |
financial instrument or contract or obligation whose value or | 760 |
return is based upon or linked to another asset or index, or both, | 761 |
separate from the financial instrument, contract, or obligation | 762 |
itself. Any security, obligation, trust account, or other | 763 |
instrument that is created from an issue of the United States | 764 |
treasury or is created from an obligation of a federal agency or | 765 |
instrumentality or is created from both is considered a derivative | 766 |
instrument. An eligible investment described in this section with | 767 |
a variable interest rate payment, based upon a single interest | 768 |
payment or single index comprised of other eligible investments | 769 |
provided for in division (A)(1) or (2) of this section, is not a | 770 |
derivative, provided that such variable rate investment has a | 771 |
maximum maturity of two years. A treasury inflation-protected | 772 |
security shall not be considered a derivative, provided the | 773 |
security matures not later than five years after purchase. | 774 |
(C) Except as provided in division (D) of this section, any | 775 |
investment made pursuant to this section must mature within five | 776 |
years from the date of settlement, unless the investment is | 777 |
matched to a specific obligation or debt of the county or to a | 778 |
specific obligation or debt of a political subdivision of this | 779 |
state, and the investment is specifically approved by the | 780 |
investment advisory committee. | 781 |
(D) The investing authority may also enter into a written | 782 |
repurchase agreement with any eligible institution mentioned in | 783 |
section 135.32 of the Revised Code or any eligible securities | 784 |
dealer pursuant to division (J) of this section, under the terms | 785 |
of which agreement the investing authority purchases and the | 786 |
eligible institution or dealer agrees unconditionally to | 787 |
repurchase any of the securities listed in divisions (B)(1) to | 788 |
(5), except letters of credit described in division (B)(2), of | 789 |
section 135.18 of the Revised Code. The market value of securities | 790 |
subject to an overnight written repurchase agreement must exceed | 791 |
the principal value of the overnight written repurchase agreement | 792 |
by at least two per cent. A written repurchase agreement must | 793 |
exceed the principal value of the overnight written repurchase | 794 |
agreement, by at least two per cent. A written repurchase | 795 |
agreement shall not exceed thirty days, and the market value of | 796 |
securities subject to a written repurchase agreement must exceed | 797 |
the principal value of the written repurchase agreement by at | 798 |
least two per cent and be marked to market daily. All securities | 799 |
purchased pursuant to this division shall be delivered into the | 800 |
custody of the investing authority or the qualified custodian of | 801 |
the investing authority or an agent designated by the investing | 802 |
authority. A written repurchase agreement with an eligible | 803 |
securities dealer shall be transacted on a delivery versus payment | 804 |
basis. The agreement shall contain the requirement that for each | 805 |
transaction pursuant to the agreement the participating | 806 |
institution shall provide all of the following information: | 807 |
(F) No investing authority shall pay a county's inactive | 823 |
moneys or moneys of a county public library fund into a fund | 824 |
established by another subdivision, treasurer, governing board, or | 825 |
investing authority, if that fund was established by the | 826 |
subdivision, treasurer, governing board, or investing authority | 827 |
for the purpose of investing or depositing the public moneys of | 828 |
other subdivisions. This division does not apply to the payment of | 829 |
public moneys into either of the following: | 830 |
(H) Any securities, certificates of deposit, deposit | 846 |
accounts, or any other documents evidencing deposits or | 847 |
investments made under authority of this section shall be issued | 848 |
in the name of the county with the county treasurer or investing | 849 |
authority as the designated payee. If any such deposits or | 850 |
investments are registrable either as to principal or interest, or | 851 |
both, they shall be registered in the name of the treasurer. | 852 |
(I) The investing authority shall be responsible for the | 853 |
safekeeping of all documents evidencing a deposit or investment | 854 |
acquired under this section, including, but not limited to, | 855 |
safekeeping receipts evidencing securities deposited with a | 856 |
qualified trustee, as provided in section 135.37 of the Revised | 857 |
Code, and documents confirming the purchase of securities under | 858 |
any repurchase agreement under this section shall be deposited | 859 |
with a qualified trustee, provided, however, that the qualified | 860 |
trustee shall be required to report to the investing authority, | 861 |
auditor of state, or an authorized outside auditor at any time | 862 |
upon request as to the identity, market value, and location of the | 863 |
document evidencing each security, and that if the participating | 864 |
institution is a designated depository of the county for the | 865 |
current period of designation, the securities that are the subject | 866 |
of the repurchase agreement may be delivered to the treasurer or | 867 |
held in trust by the participating institution on behalf of the | 868 |
investing authority. | 869 |
Upon the expiration of the term of office of an investing | 870 |
authority or in the event of a vacancy in the office for any | 871 |
reason, the officer or the officer's legal representative shall | 872 |
transfer and deliver to the officer's successor all documents | 873 |
mentioned in this division for which the officer has been | 874 |
responsible for safekeeping. For all such documents transferred | 875 |
and delivered, the officer shall be credited with, and the | 876 |
officer's successor shall be charged with, the amount of moneys | 877 |
evidenced by such documents. | 878 |
(J)(1) All investments, except for investments in securities | 879 |
described in divisions (A)(5), (6), and (12)(11) of this section, | 880 |
shall be made only through a member of the national association of | 881 |
securities dealersfinancial industry regulatory authority | 882 |
(FINRA), through a bank, savings bank, or savings and loan | 883 |
association regulated by the superintendent of financial | 884 |
institutions, or through an institution regulated by the | 885 |
comptroller of the currency, federal deposit insurance | 886 |
corporation, or board of governors of the federal reserve system. | 887 |
(2) Payment for investments shall be made only upon the | 888 |
delivery of securities representing such investments to the | 889 |
treasurer, investing authority, or qualified trustee. If the | 890 |
securities transferred are not represented by a certificate, | 891 |
payment shall be made only upon receipt of confirmation of | 892 |
transfer from the custodian by the treasurer, governing board, or | 893 |
qualified trustee. | 894 |
(K)(1) Except as otherwise provided in division (K)(2) of | 895 |
this section, no investing authority shall make an investment or | 896 |
deposit under this section, unless there is on file with the | 897 |
auditor of state a written investment policy approved by the | 898 |
investing authority. The policy shall require that all entities | 899 |
conducting investment business with the investing authority shall | 900 |
sign the investment policy of that investing authority. All | 901 |
brokers, dealers, and financial institutions, described in | 902 |
division (J)(1) of this section, initiating transactions with the | 903 |
investing authority by giving advice or making investment | 904 |
recommendations shall sign the investing authority's investment | 905 |
policy thereby acknowledging their agreement to abide by the | 906 |
policy's contents. All brokers, dealers, and financial | 907 |
institutions, described in division (J)(1) of this section, | 908 |
executing transactions initiated by the investing authority, | 909 |
having read the policy's contents, shall sign the investment | 910 |
policy thereby acknowledging their comprehension and receipt. | 911 |
(2) If a written investment policy described in division | 912 |
(K)(1) of this section is not filed on behalf of the county with | 913 |
the auditor of state, the investing authority of that county shall | 914 |
invest the county's inactive moneys and moneys of the county | 915 |
public library fund only in time certificates of deposits or | 916 |
savings or deposit accounts pursuant to division (A)(3) of this | 917 |
section, no-load money market mutual funds pursuant to division | 918 |
(A)(5) of this section, or the Ohio subdivision's fund pursuant to | 919 |
division (A)(6) of this section. | 920 |
(3) The investing authority shall maintain a monthly | 930 |
portfolio report and issue a copy of the monthly portfolio report | 931 |
describing such investments to the county investment advisory | 932 |
committee, detailing the current inventory of all obligations and | 933 |
securities, all transactions during the month that affected the | 934 |
inventory, any income received from the obligations and | 935 |
securities, and any investment expenses paid, and stating the | 936 |
names of any persons effecting transactions on behalf of the | 937 |
investing authority. | 938 |
(M) An investing authority may enter into a written | 944 |
investment or deposit agreement that includes a provision under | 945 |
which the parties agree to submit to nonbinding arbitration to | 946 |
settle any controversy that may arise out of the agreement, | 947 |
including any controversy pertaining to losses of public moneys | 948 |
resulting from investment or deposit. The arbitration provision | 949 |
shall be set forth entirely in the agreement, and the agreement | 950 |
shall include a conspicuous notice to the parties that any party | 951 |
to the arbitration may apply to the court of common pleas of the | 952 |
county in which the arbitration was held for an order to vacate, | 953 |
modify, or correct the award. Any such party may also apply to the | 954 |
court for an order to change venue to a court of common pleas | 955 |
located more than one hundred miles from the county in which the | 956 |
investing authority is located. | 957 |
For purposes of this division, "investment or deposit | 958 |
agreement" means any agreement between an investing authority and | 959 |
a person, under which agreement the person agrees to invest, | 960 |
deposit, or otherwise manage, on behalf of the investing | 961 |
authority, a county's inactive moneys or moneys in a county public | 962 |
library fund, or agrees to provide investment advice to the | 963 |
investing authority. | 964 |
(N)(1) An investment held in the county portfolio on | 965 |
September 27, 1996, that was a legal investment under the law as | 966 |
it existed before September 27, 1996, may be held until maturity, | 967 |
or if the investment does not have a maturity date the investment | 968 |
may be held until five years from September 27, 1996, regardless | 969 |
of whether the investment would qualify as a legal investment | 970 |
under the terms of this section as amended. | 971 |
Sec. 3770.06. (A) There is hereby created the state lottery | 980 |
gross revenue fund, which shall be in the custody of the treasurer | 981 |
of state but shall not be part of the state treasury. All gross | 982 |
revenues received from sales of lottery tickets, fines, fees, and | 983 |
related proceeds in connection with the statewide lottery and all | 984 |
gross proceeds from statewide joint lottery games shall be | 985 |
deposited into the fund. The treasurer of state shall invest any | 986 |
portion of the fund not needed for immediate use in the same | 987 |
manner as, and subject to all provisions of law with respect to | 988 |
the investment of, state funds. The treasurer of state shall | 989 |
disburse money from the fund on order of the director of the state | 990 |
lottery commission or the director's designee. | 991 |
Except for gross proceeds from statewide joint lottery games, | 992 |
all revenues of the state lottery gross revenue fund that are not | 993 |
paid to holders of winning lottery tickets, that are not required | 994 |
to meet short-term prize liabilities, that are not credited to | 995 |
lottery sales agents in the form of bonuses, commissions, or | 996 |
reimbursements, that are not paid to financial institutions to | 997 |
reimburse those institutions for sales agent nonsufficient funds, | 998 |
and that are collected from sales agents for remittance to | 999 |
insurers under contract to provide sales agent bonding services | 1000 |
shall be transferred to the state lottery fund, which is hereby | 1001 |
created in the state treasury. In addition, all revenues of the | 1002 |
state lottery gross revenue fund that represent the gross proceeds | 1003 |
from the statewide joint lottery games and that are not paid to | 1004 |
holders of winning lottery tickets, that are not required to meet | 1005 |
short-term prize liabilities, that are not credited to lottery | 1006 |
sales agents in the form of bonuses, commissions, or | 1007 |
reimbursements, and that are not necessary to cover operating | 1008 |
expenses associated with those games or to otherwise comply with | 1009 |
the agreements signed by the governor that the director enters | 1010 |
into under division (J) of section 3770.02 of the Revised Code or | 1011 |
the rules the commission adopts under division (B)(5) of section | 1012 |
3770.03 of the Revised Code shall be transferred to the state | 1013 |
lottery fund. All investment earnings of the fund shall be | 1014 |
credited to the fund. Moneys shall be disbursed from the fund | 1015 |
pursuant to vouchers approved by the director. Total disbursements | 1016 |
for monetary prize awards to holders of winning lottery tickets in | 1017 |
connection with the statewide lottery and purchases of goods and | 1018 |
services awarded as prizes to holders of winning lottery tickets | 1019 |
shall be of an amount equal to at least fifty per cent of the | 1020 |
total revenue accruing from the sale of lottery tickets. | 1021 |
(B) Pursuant to Section 6 of Article XV, Ohio Constitution, | 1022 |
there is hereby established in the state treasury the lottery | 1023 |
profits education fund. Whenever, in the judgment of the director | 1024 |
of the state lottery commission, the amount to the credit of the | 1025 |
state lottery fund that does not represent proceeds from statewide | 1026 |
joint lottery games is in excess of that needed to meet the | 1027 |
maturing obligations of the commission and as working capital for | 1028 |
its further operations, the director of the state lottery | 1029 |
commission shall recommend the amount of the excess to be | 1030 |
transferred to the lottery profits education fund, and the | 1031 |
director of budget and management may transfer the excess to the | 1032 |
lottery profits education fund in connection with the statewide | 1033 |
lottery. In addition, whenever, in the judgment of the director of | 1034 |
the state lottery commission, the amount to the credit of the | 1035 |
state lottery fund that represents proceeds from statewide joint | 1036 |
lottery games equals the entire net proceeds of those games as | 1037 |
described in division (B)(5) of section 3770.03 of the Revised | 1038 |
Code and the rules adopted under that division, the director of | 1039 |
the state lottery commission shall recommend the amount of the | 1040 |
proceeds to be transferred to the lottery profits education fund, | 1041 |
and the director of budget and management may transfer those | 1042 |
proceeds to the lottery profits education fund. Investment | 1043 |
earnings of the lottery profits education fund shall be credited | 1044 |
to the fund. | 1045 |
The lottery profits education fund shall be used solely for | 1046 |
the support of elementary, secondary, vocational, and special | 1047 |
education programs as determined in appropriations made by the | 1048 |
general assembly, or as provided in applicable bond proceedings | 1049 |
for the payment of debt service on obligations issued to pay costs | 1050 |
of capital facilities, including those for a system of common | 1051 |
schools throughout the state pursuant to section 2n of Article | 1052 |
VIII, Ohio Constitution. When determining the availability of | 1053 |
money in the lottery profits education fund, the director of | 1054 |
budget and management may consider all balances and estimated | 1055 |
revenues of the fund. | 1056 |
(C) There is hereby established in the state treasury the | 1057 |
deferred prizes trust fund. With the approval of the director of | 1058 |
budget and management, an amount sufficient to fund annuity prizes | 1059 |
shall be transferred from the state lottery fund and credited to | 1060 |
the trust fund. The treasurer of state shall credit all earnings | 1061 |
arising from investments purchased under this division to the | 1062 |
trust fund. Within sixty days after the end of each fiscal year, | 1063 |
the treasurer of state shall certify to the director of budget and | 1064 |
management whether the actuarial amount of the trust fund is | 1065 |
sufficient over the fund's life for continued funding of all | 1066 |
remaining deferred prize liabilities as of the last day of the | 1067 |
fiscal year just ended. Also, within that sixty days, the director | 1068 |
of budget and management shall certify the amount of investment | 1069 |
earnings necessary to have been credited to the trust fund during | 1070 |
the fiscal year just ending to provide for such continued funding | 1071 |
of deferred prizes. Any earnings credited in excess of the latter | 1072 |
certified amount shall be transferred to the lottery profits | 1073 |
education fund. | 1074 |
To provide all or a part of the amounts necessary to fund | 1075 |
deferred prizes awarded by the commission in connection with the | 1076 |
statewide lottery, the treasurer of state, in consultation with | 1077 |
the commission, may invest moneys contained in the deferred prizes | 1078 |
trust fund which represents proceeds from the statewide lottery in | 1079 |
obligations of the type permitted for the investment of state | 1080 |
funds but whose maturities are thirty years or less. | 1081 |
Notwithstanding the requirements of any other section of the | 1082 |
Revised Code, to provide all or part of the amounts necessary to | 1083 |
fund deferred prizes awarded by the commission in connection with | 1084 |
statewide joint lottery games, the treasurer of state, in | 1085 |
consultation with the commission, may invest moneys in the trust | 1086 |
fund which represent proceeds derived from the statewide joint | 1087 |
lottery games in accordance with the rules the commission adopts | 1088 |
under division (B)(5) of section 3770.03 of the Revised Code. | 1089 |
Investments of the trust fund are not subject to the provisions of | 1090 |
division (A)(10) of section 135.143 of the Revised Code limiting | 1091 |
to twenty-five per cent the amount of the state's total average | 1092 |
portfolio that may be invested in debt interests other than | 1093 |
commercial paper and limiting to
one-half of onefive per cent | 1094 |
the amount that may be invested in debt interests, including | 1095 |
commercial paper, of a single issuer. | 1096 |
(E) The state lottery commission shall establish an internal | 1109 |
audit plan before the beginning of each fiscal year, subject to | 1110 |
the approval of the office of internal audit in the office of | 1111 |
budget and management. At the end of each fiscal year, the | 1112 |
commission shall prepare and submit an annual report to the office | 1113 |
of internal audit for the office's review and approval, specifying | 1114 |
the internal audit work completed by the end of that fiscal year | 1115 |
and reporting on compliance with the annual internal audit plan. | 1116 |
(F) Whenever, in the judgment of the director of budget and | 1117 |
management, an amount of net state lottery proceeds is necessary | 1118 |
to be applied to the payment of debt service on obligations, all | 1119 |
as defined in sections 151.01 and 151.03 of the Revised Code, the | 1120 |
director shall transfer that amount directly from the state | 1121 |
lottery fund or from the lottery profits education fund to the | 1122 |
bond service fund defined in those sections. The provisions of | 1123 |
this division are subject to any prior pledges or obligation of | 1124 |
those amounts to the payment of bond service charges as defined in | 1125 |
division (C) of section 3318.21 of the Revised Code, as referred | 1126 |
to in division (B) of this section. | 1127 |
Section 3. Section 135.14 of the Revised Code is presented | 1130 |
in this act as a composite of the section as amended by both Sub. | 1131 |
H.B. 473 and Am. Sub. H.B. 640 of the 123rd General Assembly. The | 1132 |
General Assembly, applying the principle stated in division (B) of | 1133 |
section 1.52 of the Revised Code that amendments are to be | 1134 |
harmonized if reasonably capable of simultaneous operation, finds | 1135 |
that the composite is the resulting version of the section in | 1136 |
effect prior to the effective date of the section as presented in | 1137 |
this act. | 1138 |