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As Reported by House Financial Institutions Committee
123rd General Assembly
Regular Session
1999-2000 | Sub. H. B. No. 473 |
REPRESENTATIVES MYERS-SCHULER-ALLEN-JOLIVETTE-HARTNETT-
CLANCY-OLMAN-METZGER-DISTEL-EVANS-VERICH-MAIER-D.MILLER
A BILL
To amend sections 9.37, 129.60, 135.12, 135.14, 135.18, 135.181, 135.33,
135.341, 135.35,
135.37, 307.55, 319.16, 321.15, 321.16, and 321.17 of the Revised Code to
modify the
investment authority of counties and political subdivisions relative to the
types of investments made, the collateral requirements applicable to the
receipt of public funds, and the
investment of
public funds in
repurchase agreements; to modify the designation period of public
depositories by the State Board of Deposit, and by county commissioners, and
the designation authority of political subdivisions; to authorize a political
subdivision or a county investment advisory committee to
retain the services of an investment advisor meeting certain requirements; to
modify investment recordkeeping requirements of county treasurers and
authorize electronic
presentment of warrant information to a county treasurer;
to permit county auditors
to issue, and county treasurers to redeem, electronic warrants authorizing
direct deposit for payment of county
obligations in accordance with rules adopted by the Auditor of State;
and to make related changes.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO:
Section 1. That sections 9.37, 129.60, 135.12, 135.14, 135.18, 135.181, 135.33,
135.341, 135.35, 135.37, 307.55, 319.16, 321.15, 321.16, and 321.17 of the
Revised Code be amended
to read as follows:
Sec. 9.37. (A) As used in this section, "public official"
means any elected or appointed officer, employee, or agent of the
state, any state institution of higher education, any political
subdivision, board, commission, bureau, or other public body
established by law. "State institution of higher education"
means any state university or college as defined in division
(A)(1) of section 3345.12 of the Revised Code, community college,
state community college, university branch, or technical college.
(B) Any EXCEPT AS PROVIDED IN DIVISION (F) OF THIS
SECTION, ANY public official may make by direct deposit of
funds by electronic transfer, if the payee provides a written
authorization designating a financial institution and an account
number to which the payment is to be credited, any payment such
public official is permitted or required by law in the
performance of his OFFICIAL duties to make by issuing a check or
warrant.
(C) Such public official may contract with a financial
institution for the services necessary to make direct deposits
and draw lump-sum checks or warrants payable to that institution
in the amount of the payments to be transferred.
(D) Before making any direct deposit as authorized under
this section, the public official shall ascertain that the
account from which the payment is to be made contains sufficient
funds to cover the amount of the payment.
(E) If the issuance of checks and warrants by a public
official requires authorization by a governing board, commission,
bureau, or other public body having jurisdiction over the public
official, the public official may only make direct deposits and
contracts under this section pursuant to a resolution of
authorization duly adopted by such governing board, commission,
bureau, or other public body.
(F) PURSUANT TO SECTIONS 307.55, 319.16, AND 321.15 of the Revised Code, A
COUNTY AUDITOR MAY ISSUE, AND A COUNTY TREASURER MAY REDEEM, ELECTRONIC
WARRANTS AUTHORIZING DIRECT DEPOSIT FOR
PAYMENT OF COUNTY OBLIGATIONS IN ACCORDANCE WITH RULES ADOPTED BY THE AUDITOR
OF STATE PURSUANT TO SECTION 117.20 of the Revised Code.
Sec. 129.60. (A) As used in sections 129.60 to 129.65 and
135.12 of the Revised Code, "notes" include notes whether or not
issued in anticipation of bonds.
The total debt created as evidenced by bonds and notes
issued under Section 2h of Article VIII, Ohio Constitution, shall
not exceed two hundred ninety million dollars. No part of such
debt shall be contracted after December 31, 1970.
For the purposes of the certifications required by section
129.63 of the Revised Code there need not be included in
determining the amounts required to meet the payments of
principal of bonds or notes issued pursuant to Section 2h of
Article VIII, Ohio Constitution, and this section, the principal
of notes which the commissioners of the sinking fund certify will
be retired by the issuance of bonds or renewal notes.
(B)(1) All bonds or notes shall mature at such time or
times, not exceeding thirty years from the date the debt is first
contracted, as may be fixed by the commissioners of the sinking
fund in their resolution authorizing the issuance of such bonds
or notes.
(2) The principal of all bonds or notes and the interest
thereon shall be exempt from all taxes levied by the state or any
taxing subdivision or district thereof.
(3) All bonds or notes shall pass as negotiable
instruments, subject to any provisions for registration, and
shall possess all the attributes thereof.
(C) Accrued interest received from the sale of bonds and
notes and the proceeds of bonds or notes issued to fund or refund
bonds or notes shall be paid into the development bond retirement
fund created by Section 2h of Article VIII, Ohio Constitution.
Sec. 135.12. The (A) BEGINNING IN 2000, THE state
board of deposit shall meet on the
third Monday of March JUNE in the odd-numbered
EVEN-NUMBERED years for the purpose
of designating the public depositories of the public moneys of
the state, and at such meeting or any adjourned session thereof
shall designate such public depositories and award the public
moneys of the state to and among the public depositories so
designated for the period of two years commencing on the first
Monday of April JULY next following.
(B) Each other
governing board OTHER THAN THE STATE BOARD OF DEPOSIT shall meet every
five years on
the third Monday or such regularly scheduled meeting date of the
month next preceding the date of the expiration of its
designation of depositories for the purpose of designating the
public depositories of the public moneys of the subdivision, and
at such meeting or any adjourned session thereof, shall designate
such public depositories and award the public moneys of the
subdivision to and among the public depositories so designated
for the period of five years commencing on the date of the
expiration of the next preceding designation.
Such THE designation and award shall be made in duplicate; one
copy shall be retained by the governing board of the subdivision
and one copy shall be certified to the treasurer.
(C) If a governing board other than the state board of deposit
determines,
during a designation period, that a public depository designated under this
section is insolvent or operating in an unsound or unsafe manner, the
governing board may meet and designate a different public depository of the
public moneys of the subdivision for the remainder of the designation period.
(D) IF A GOVERNING BOARD OTHER THAN THE STATE BOARD OF DEPOSIT
DETERMINES DURING A DESIGNATION PERIOD THAT IT IS NECESSARY AND IN THE
SUBDIVISION'S BEST INTERESTS TO APPOINT ADDITIONAL DEPOSITORIES, THE GOVERNING
BOARD MAY MEET AND DESIGNATE ONE OR MORE ADDITIONAL PUBLIC DEPOSITORIES OF THE
PUBLIC MONEYS OF THE SUBDIVISION FOR THE REMAINDER OF THE DESIGNATION PERIOD.
(E) Whenever, by amendment or enactment of any state or federal
law or the amendment or adoption of any valid regulation
thereunder, the terms of a designation or award, lawful at the
beginning of any designation period, cease to be
lawful during
such period, and if such THE change of law or regulation
requires,
the designation period shall be limited so as not
to extend
beyond the date when such THAT change becomes effective. In
such
case, the proper governing board shall meet and designate the
public depositories of the public moneys of the state or of the
subdivision for the remainder of the designation period.
Sec. 135.14. (A) As used in this section, "treasurer" does not
include the treasurer of state, and "governing board" does not
include the state board of deposit.
(B) The treasurer or governing board may invest or deposit any
part or all of the interim moneys. The
following classifications of obligations shall be eligible for
such investment or deposit:
(1) United States treasury bills, notes, bonds, or any other obligation or
security issued by the United States treasury or any other obligation
guaranteed as to principal and interest by the United States.
Nothing in the classification of eligible obligations set forth in division
(B)(1) of this section or in the classifications of eligible obligations set
forth in divisions
(B)(2) to (6)(7) of this section shall be construed to
authorize any investment
in stripped principal or interest obligations of such eligible obligations.
(2) Bonds, notes, debentures, or any other obligations or
securities issued by any federal government agency or instrumentality,
including but not limited to, the federal national mortgage association,
federal home loan bank, federal farm credit bank, federal home loan mortgage
corporation, government national mortgage association, and student loan
marketing association. All federal agency securities shall be direct
issuances of federal government agencies or instrumentalities.
(3) Interim deposits in the eligible institutions applying
for interim moneys as provided in section 135.08 of the Revised
Code. The award of interim deposits shall be made in accordance
with section 135.09 of the Revised Code and the treasurer or the
governing board shall determine the periods for which such
interim deposits are to be made and shall award such interim
deposits for such periods, provided that any eligible institution
receiving an interim deposit award may, upon notification that
the award has been made, decline to accept the interim deposit in
which event the award shall be made as though such institution
had not applied for such interim deposit.
(4) Bonds and other obligations of this state;
(5) No-load money market mutual funds consisting
exclusively of obligations described in division (B)(1)
or (2) of this section and repurchase agreements secured by such
obligations, provided that investments in securities
described in this division are made only through eligible institutions
mentioned in section 135.03 of the Revised Code;
(6) The Ohio subdivision's fund as provided in section 135.45
of the Revised Code;
(7) UP TO TWENTY-FIVE PER CENT OF INTERIM MONEYS AVAILABLE FOR
INVESTMENT IN EITHER OF THE FOLLOWING:
(a) COMMERCIAL PAPER NOTES ISSUED BY AN ENTITY THAT IS DEFINED IN
DIVISION (D) OF SECTION 1705.01 OF THE REVISED CODE
AND THAT HAS
ASSETS EXCEEDING FIVE HUNDRED MILLION DOLLARS, TO WHICH NOTES ALL OF THE
FOLLOWING APPLY:
(i) THE NOTES ARE RATED AT THE TIME OF PURCHASE IN THE HIGHEST
CLASSIFICATION ESTABLISHED BY AT LEAST TWO NATIONALLY RECOGNIZED STANDARD
RATING SERVICES.
(ii) THE AGGREGATE VALUE OF THE NOTES DOES NOT EXCEED TEN PER
CENT
OF THE AGGREGATE VALUE OF THE OUTSTANDING COMMERCIAL PAPER OF THE ISSUING
CORPORATION.
(iii) THE NOTES MATURE NOT LATER THAN ONE HUNDRED EIGHTY DAYS
AFTER
PURCHASE.
(b) BANKERS ACCEPTANCES OF BANKS THAT ARE INSURED BY THE FEDERAL
DEPOSIT INSURANCE CORPORATION AND TO WHICH BOTH OF THE FOLLOWING
APPLY:
(i) THE OBLIGATIONS ARE ELIGIBLE FOR PURCHASE BY THE FEDERAL
RESERVE SYSTEM.
(ii) THE OBLIGATIONS MATURE NOT LATER THAN ONE HUNDRED EIGHTY
DAYS
AFTER PURCHASE.
NO INVESTMENT SHALL BE MADE PURSUANT TO DIVISION (B)(7) OF THIS
SECTION UNLESS THE TREASURER OR GOVERNING BOARD HAS COMPLETED
ADDITIONAL TRAINING FOR MAKING THE INVESTMENTS AUTHORIZED BY
DIVISION (B)(7) OF THIS SECTION. THE TYPE AND AMOUNT OF
ADDITIONAL TRAINING SHALL BE APPROVED BY THE AUDITOR OF STATE AND MAY BE
CONDUCTED BY OR PROVIDED
UNDER THE SUPERVISION OF THE AUDITOR OF STATE.
(C) Nothing in the classifications of eligible obligations set
forth in divisions (B)(1) to (6)(7) of this section shall be
construed
to authorize any investment in a derivative, and no treasurer or
governing board shall invest in a derivative. For purposes of this
division, "derivative" means a financial instrument or contract or obligation
whose value or return is based upon or linked to another asset or index, or
both, separate from the financial instrument, contract, or obligation itself.
Any security, obligation, trust account, or other instrument that is created
from an issue of the United States treasury or is created
from an obligation of a federal agency or instrumentality or is created from
both is considered a derivative instrument. An eligible investment described
in this section with a variable interest rate payment, based upon a single
interest payment or single index comprised of other eligible investments
provided for in division (B)(1) or (2) of this section, is not a
derivative, provided that such variable rate investment has a maximum maturity
of two years.
(D) Any EXCEPT AS PROVIDED IN DIVISION (E) OF THIS
SECTION, ANY investment made pursuant to this section must mature
within five years from the date of settlement, unless the investment is
matched to a specific obligation or debt of the
subdivision.
(E) The treasurer or governing board may also enter into a
written repurchase agreement with any eligible institution mentioned in
section 135.03 of the Revised Code or any eligible dealer pursuant to
division (M) of this section, under the terms of which
agreement the treasurer or governing board purchases, and such
institution or dealer agrees unconditionally to repurchase any of the
securities listed in division DIVISIONS (B)(1) or (2)
TO (5), EXCEPT LETTERS OF CREDIT DESCRIBED IN DIVISION
(B)(2), of this section 135.18
of the Revised Code.
The market value of securities subject to an overnight WRITTEN
repurchase agreement must exceed the principal value of the overnight
WRITTEN repurchase agreement by at least two per cent. A term
WRITTEN repurchase agreement
shall not exceed thirty days and the market value of securities subject to a
term WRITTEN repurchase agreement must exceed the principal
value of the term WRITTEN repurchase agreement by at least two
per cent and be marked to market daily.
All securities purchased
pursuant to this division shall be delivered into the custody of the treasurer
or governing board or an agent designated by the treasurer or governing
board. A WRITTEN repurchase agreement with an eligible securities
dealer shall be
transacted on a delivery versus payment basis. The
agreement shall contain the requirement that for
each transaction pursuant to the agreement the participating
institution or dealer shall provide all of the following information:
(1) The par value of the securities;
(2) The type, rate, and maturity date of the securities;
(3) A numerical identifier generally accepted in the
securities industry that designates the securities.
No treasurer or governing board shall enter into a written repurchase
agreement under the terms of which the treasurer or governing board agrees to
sell securities owned by the subdivision to a purchaser and agrees with that
purchaser to unconditionally repurchase those securities.
(F) No treasurer or governing board shall make an investment
under this section, unless the treasurer or governing board, at the
time of making the investment, reasonably expects that the
investment can be held until its maturity.
(G) No treasurer or governing board shall pay interim moneys into
a fund established by another subdivision, treasurer, governing board, or
investing authority, if that fund was established for the purpose of investing
the public moneys of other subdivisions. This division does
not apply to the payment of public moneys into either of the following:
(1) The Ohio subdivision's
fund pursuant to division (B)(6) of this section;
(2) A fund created solely for the purpose of acquiring, constructing, owning,
leasing, or operating municipal utilities pursuant to the
authority provided under section 715.02 of the Revised Code or Section 4 of
Article XVIII, Ohio Constitution.
For purposes of division (G) of this section, "subdivision"
includes a county.
(H) The use of leverage, in which the treasurer or governing
board uses its current investment assets as collateral for the purpose of
purchasing other assets, is prohibited. The issuance of taxable notes for the
purpose of arbitrage is prohibited. Contracting to sell securities that have
not yet been acquired by the treasurer or governing board, for the purpose of
purchasing such securities on the speculation that bond prices will decline,
is prohibited.
(I) Whenever, during a period of designation, the treasurer
classifies public moneys as interim moneys, the treasurer shall notify the
governing board of such action. Such THE notification shall be
given within thirty days after such classification and in the event the
governing board does not concur in such classification or in the
investments or deposits made under this section, the governing
board may order the treasurer to sell or liquidate any of such
investments or deposits, and any such order shall specifically
describe the investments or deposits and fix the date upon which
they are to be sold or liquidated. Investments or deposits so
ordered to be sold or liquidated shall be sold or liquidated for
cash by the treasurer on the date fixed in such order at the then
current market price. Neither the treasurer nor the members of
the board shall be held accountable for any loss occasioned by
sales or liquidations of investments or deposits at prices lower
than their cost. Any loss or expense incurred in making such
sales or liquidations is payable as other expenses of the
treasurer's office.
(J) If any investments or deposits purchased under the
authority of this section are issuable to a designated payee or
to the order of a designated payee, the name of the treasurer and
the title of the treasurer's office shall be so designated. If any such
securities are registrable either as to principal or interest, or
both, then such securities shall be registered in the name of the
treasurer as such.
(K) The treasurer is responsible for the safekeeping of all
documents evidencing a deposit or investment acquired by the
treasurer under this section. Any securities may be deposited for
safekeeping with a qualified trustee as provided in section
135.18 of the Revised Code, except the delivery of securities
acquired under any repurchase agreement under this section shall
be made to a qualified trustee, provided, however, that the
qualified trustee shall be required to report to the treasurer,
governing board, auditor of state, or an authorized outside
auditor at any time upon request as to the identity, market
value, and location of the document evidencing each security, and
that if the participating institution is a designated depository
of the subdivision for the current period of designation, the
securities that are the subject of the repurchase agreement may
be delivered to the treasurer or held in trust by the
participating institution on behalf of the subdivision. Interest
earned on any investments or deposits authorized by this section
shall be collected by the treasurer and credited by the
treasurer to the proper fund of the subdivision.
Upon the expiration of the term of office of a treasurer or
in the event of a vacancy in the office of treasurer by reason of
death, resignation, removal from office, or otherwise, the
treasurer or the treasurer's legal representative shall transfer and deliver
to the treasurer's successor all documents evidencing a deposit or investment
held by the treasurer. For the investments and deposits so
transferred and delivered, such treasurer shall be credited with and the
treasurer's successor shall be charged with the amount of money held in such
investments and deposits.
(L) Whenever investments or deposits acquired under this
section mature and become due and payable, the treasurer shall
present them for payment according to their tenor, and shall
collect the moneys payable thereon. The moneys so collected
shall be treated as public moneys subject to sections 135.01 to
135.21 of the Revised Code.
(M)(1) All investments, except for investments in securities
described in divisions (B)(5) and (6) of this section and for investments by
a municipal corporation in the issues of such municipal
corporation, shall be made only through a member of the national
association of securities dealers, through a bank, savings bank,
or savings and loan association regulated by the superintendent of financial
institutions, or through an institution regulated by the comptroller of
the currency, federal deposit insurance corporation, or board of
governors of the federal reserve system.
(2) Payment for investments shall be made only upon the
delivery of securities representing such investments to the
treasurer, governing board, or qualified trustee. If the
securities transferred are not represented by a certificate,
payment shall be made only upon receipt of confirmation of
transfer from the custodian by the treasurer, governing board, or
qualified trustee.
(N)(1) IN MAKING INVESTMENTS AUTHORIZED BY THIS SECTION, A
TREASURER
OR GOVERNING BOARD MAY RETAIN THE SERVICES OF AN INVESTMENT ADVISOR, PROVIDED
THE ADVISOR IS
LICENSED BY THE DIVISION OF
SECURITIES UNDER SECTION 1707.141 of the Revised Code OR IS
REGISTERED WITH THE SECURITIES AND
EXCHANGE COMMISSION, AND POSSESSES EXPERIENCE IN PUBLIC FUNDS
INVESTMENT MANAGEMENT, SPECIFICALLY IN THE AREA OF STATE AND LOCAL
GOVERNMENT INVESTMENT PORTFOLIOS, OR THE ADVISOR IS AN ELIGIBLE
INSTITUTION MENTIONED IN SECTION 135.03 OF THE REVISED
CODE.
(O)(1) Except as otherwise provided in divisions
(N)(O)(2) and (3) of this section, no treasurer or
governing board shall make an
investment or deposit
under this section, unless there is on file with the auditor of state
a written investment policy approved by the treasurer or governing board.
The policy shall require that
all entities conducting investment business with the treasurer or governing
board shall sign the investment policy of that
subdivision. All brokers, dealers, and financial institutions, described in
division (M)(1) of this section, initiating transactions with the treasurer or
governing board by giving advice or making investment recommendations shall
sign the treasurer's or governing board's investment policy thereby
acknowledging their agreement to abide by the policy's contents. All brokers,
dealers, and financial institutions, described in division (M)(1) of this
section, executing transactions initiated by the treasurer or governing board,
having read the policy's contents, shall sign the investment policy thereby
acknowledging their comprehension and receipt.
(2) If a written investment policy described in division
(N)(O)(1)
of this section is not filed on behalf of the subdivision with the auditor of
state, the treasurer or governing board of that subdivision shall invest the
subdivision's interim moneys only in interim deposits pursuant to
division (B)(3) of this section
or the Ohio subdivision's fund pursuant to division (B)(6) of this section.
(3) Divisions (N)(O)(1) and (2) of this section do not apply
to a treasurer or
governing board of a subdivision whose average annual portfolio of
investments held pursuant to this section is one hundred
thousand dollars or less, provided that the treasurer or
governing board certifies, on a form prescribed by the auditor
of state, that the treasurer or governing board will comply and
is in compliance with the provisions of sections 135.01 to
135.21 of the Revised Code.
(O)(P) A treasurer or governing board may enter into
a written investment or deposit agreement that includes a
provision under which the parties agree to submit to
nonbinding arbitration to settle any controversy that may arise
out of the agreement, including any controversy pertaining to
losses of public moneys resulting from investment or deposit.
The arbitration provision shall
be set forth entirely in the agreement, and the agreement shall
include a conspicuous notice to the
parties that any party to the arbitration may apply to the court of common
pleas of the county in which the arbitration was held for an order to vacate,
modify, or correct the award. Any such party may also apply to the court for
an order to change venue to a court of common pleas located more than one
hundred miles from the county in which the treasurer or governing board is
located.
For purposes of this division, "investment or deposit agreement" means any
agreement between a treasurer or governing board and a person, under which
agreement the person agrees to invest, deposit, or otherwise manage a
subdivision's interim moneys on behalf of the treasurer or governing board, or
agrees to provide investment advice to the treasurer or governing board.
(P)(Q) An investment made by the treasurer or governing board
pursuant to this section prior to the effective date of this amendment
SEPTEMBER 27, 1996, that
was a legal investment under the law as it existed before the effective
date
of this amendment SEPTEMBER 27, 1996, may be held
until maturity, or if the investment does not
have a maturity date, it may be held until five years from the effective
date
of this amendment SEPTEMBER 27, 1996, regardless
of whether the investment would qualify as a
legal investment under the terms of this section as amended.
Sec. 135.18. (A) The treasurer, before making the initial
deposit in a public depository pursuant to an award made under
sections 135.01 to 135.21 of the Revised Code, shall require the
institution designated as a public depository to pledge to and
deposit with the treasurer, as security for the repayment of all public
moneys to be deposited in the public depository during the period
of designation pursuant to the award, eligible securities of
aggregate market value equal to the excess of the amount of
public moneys to be at the time so deposited, over and above such
portion or amount of such moneys as is at such time insured by
the federal deposit insurance corporation or by any other agency
or instrumentality of the federal government, or the treasurer
may require the institution to deposit with the treasurer surety company
bonds which, when executed, shall be for an amount equal to such
excess amount. In the case of any deposit other than the initial
deposit made during the period of designation, the amount of the
aggregate market value of securities required to be pledged and
deposited, or of the surety company bonds required to be
deposited, shall be equal to the difference between the amount of
public moneys on deposit in such public depository plus the
amount to be so deposited, minus the portion or amount of the
aggregate as is at the time insured as provided in this section. The
treasurer may require additional eligible securities to be
deposited to provide for any depreciation which may occur in the
market value of any of the securities so deposited.
(B) The following securities shall be eligible for the
purposes of this section:
(1) Bonds, notes, or other obligations of the United
States; or bonds, notes, or other obligations guaranteed as to
principal and interest by the United States or those for which
the faith of the United States is pledged for the payment of
principal and interest thereon, by language appearing in the
instrument specifically providing such guarantee or pledge and
not merely by interpretation or otherwise;
(2) Bonds, notes, debentures, letters of credit, or other obligations or
securities issued by any federal government agency or instrumentality, or the
export-import bank of Washington; bonds, notes, or other
obligations guaranteed as to principal and interest by the United
States or those for which the faith of the United States is
pledged for the payment of principal and interest thereon, by
interpretation or otherwise and not by language appearing in the
instrument specifically providing such guarantee or pledge;
(3) Obligations of or fully insured or fully guaranteed by the United States
or any federal government agency or instrumentality;
(4) Obligations partially insured or partially guaranteed by any federal
agency or instrumentality;
(5) Obligations of or fully guaranteed by the federal national mortgage
association, federal home loan mortgage corporation, federal farm credit bank,
or student loan marketing association;
(6) Bonds and other obligations of this state;
(7) Bonds and other obligations of any county, township,
school district, municipal corporation, or other legally
constituted taxing subdivision of this state, which is not at the
time of such deposit, in default in the payment of principal or
interest on any of its bonds or other obligations, for which the
full faith and credit of the issuing subdivision is
pledged;
(8) Bonds of other states of the United States which have
not during the ten years immediately preceding the time of such
deposit defaulted in payments of either interest or principal on
any of their bonds;
(9) Shares of no-load money market mutual funds
consisting exclusively of obligations described in division (B)(1) or (2) of
this section and repurchase agreements secured by such
obligations;
(10) A SURETY BOND ISSUED BY A CORPORATE SURETY LICENSED BY THE
STATE AND AUTHORIZED TO ISSUE SURETY BONDS IN THIS STATE PURSUANT TO
CHAPTER 3929. OF THE REVISED CODE, AND QUALIFIED TO
PROVIDE
SURETY BONDS TO THE FEDERAL GOVERNMENT PURSUANT TO 96 STAT. 1047
(1982), 31 U.S.C.A. 9304.
(C) If the public depository fails to pay over any part of
the public deposit made therein as provided by law, the treasurer
shall sell at public sale any of the bonds or other securities
deposited with the treasurer pursuant to this section or section
131.09 of the Revised Code, or shall draw on any letter of credit to the
extent of such failure to pay. Thirty days' notice of such sale shall be
given in a newspaper of general circulation at Columbus, in the
case of the treasurer of state, and at the county seat of the
county in which the office of the treasurer is located, in the
case of any other treasurer. When a sale of bonds or other
securities has been so made and upon payment to the treasurer of
the purchase money, the treasurer shall transfer such bonds or
securities whereupon the absolute ownership of such bonds or
securities shall pass to the purchasers. Any surplus remaining
after deducting the amount due the state or subdivision and
expenses of sale shall be paid to the public depository.
(D) An institution designated as a public depository may,
by written notice to the treasurer, designate a qualified trustee
and deposit the eligible securities required by this section with
the trustee for safekeeping for the account of the treasurer and
the institution as a public depository, as their respective
rights to and interests in such securities under this section may
appear and be asserted by written notice to or demand upon the
trustee. In such case, the treasurer shall accept the written
receipt of the trustee describing the securities which have been
deposited with the trustee by the public depository, a copy of
which shall also be delivered to the public depository.
Thereupon all such securities so deposited with the trustee are
deemed to be pledged with the treasurer and to be deposited with
the treasurer, for all the purposes of this section.
(E) The governing board may make provisions for the
exchange and release of securities and the substitution of other
eligible securities therefor except where the public depository
has deposited eligible securities with a trustee for safekeeping
as provided in this section.
(F) When the public depository has deposited eligible
securities described in division (B)(1) of this section with a
trustee for safekeeping, the public depository may at any time
substitute or exchange eligible securities described in division
(B)(1) of this section having a current market value equal to or
greater than the current market value of the securities then on
deposit and for which they are to be substituted or exchanged,
without specific authorization from any governing board, boards,
or treasurer of any such substitution or exchange.
(G) When the public depository has deposited eligible
securities described in divisions (B)(2) to (9) of this
section with a trustee for safekeeping, the public depository may at any
time substitute or exchange eligible securities having a current
market value equal to or greater than the current market value of
the securities then on deposit and for which they are to be
substituted or exchanged without specific authorization of any
governing board, boards, or treasurer of any such substitution or
exchange only if:
(1) The treasurer has authorized the public depository to
make such substitution or exchange on a continuing basis during a
specified period without prior approval of each substitution or
exchange. Such authorization may be effected by the treasurer
sending to the trustee a written notice stating that substitution
may be effected on a continuing basis during a specified period
which shall not extend beyond the end of the period of
designation during which the notice is given. The trustee may
rely upon such notice and upon the period of authorization stated
therein and upon the period of designation stated therein.
(2) No continuing authorization for substitution has been
given by the treasurer, the public depository notifies the
treasurer and the trustee of an intended substitution or
exchange, and the treasurer fails to object to the trustee as to
the eligibility or market value of the securities being
substituted within ten calendar days after the date appearing on
the notice of proposed substitution. The notice to the treasurer
and to the trustee shall be given in writing and delivered
personally or by certified or registered mail with a return
receipt requested. The trustee may assume in any case that the
notice has been delivered to the treasurer. In order for
objections of the treasurer to be effective, receipt of the
objections must be acknowledged in writing by the trustee.
(3) The treasurer gives written authorization for a
substitution or exchange of specific securities.
(H) The public depository shall notify any governing
board, boards, or treasurer of any such substitution or exchange
under division (G)(1) or (2) of this section. Upon request from
the treasurer, the trustee shall furnish a statement of the
securities pledged against such public deposits.
(I) Any federal reserve bank or branch thereof located in
this state, without compliance with Chapter 1111. of the Revised Code and
without becoming
subject to any other law
of this state relative to the exercise by corporations of trust
powers generally, is qualified to act as trustee for the
safekeeping of securities, under this section. Any institution
mentioned in section 135.03 of the Revised Code that holds a
certificate of qualification issued by the superintendent of
financial institutions or any institution complying with sections 1111.04,
1111.05, and 1111.06 of the Revised Code, is qualified
to act as trustee for the safekeeping of securities, other than
those belonging to itself, under this section. Upon application
to the superintendent in writing by any such institution, the
superintendent
shall investigate the applicant and ascertain whether or not it
has been authorized to execute and accept trusts in this state
and has safe and adequate vaults and efficient supervision
thereof for the storage and safekeeping within this state of such
securities. If the superintendent finds that the applicant has
been so authorized and does have such vaults and supervision
thereof, the superintendent shall approve the application and issue
a certificate to that effect, the original or any certified copy of which
shall be conclusive evidence that the institution therein named is
qualified to act as trustee for the purposes of this section with
respect to securities other than those belonging to itself.
Notwithstanding the fact that a public depository is
required to pledge eligible securities in certain amounts to
secure deposits of public moneys, a trustee shall have no duty or
obligation to determine the eligibility, market value, or face
value of any securities deposited with the trustee by a public
depository. This applies in all situations including, without
limitation, a substitution or exchange of securities.
Any charges or compensation of a designated trustee for
acting as such under this section shall be paid by the public
depository and in no event shall be chargeable to the state or
the subdivision or to the treasurer or to any officer of the
state or subdivision. Such THE charges or compensation shall
not be
a lien or charge upon the securities deposited for safekeeping
prior or superior to the rights to and interests in such
securities of the state or the subdivision or of the treasurer.
The treasurer and the treasurer's bonders or surety
shall be relieved from any liability to the state or the subdivision or to the
public depository for the loss or destruction of any securities
deposited with a qualified trustee pursuant to this section.
Sec. 135.181. (A) As used in this section:
(1) "Public depository" means that term as defined in
section 135.01 of the Revised Code, but also means an institution
which receives or holds any public deposits as defined in section
135.31 of the Revised Code.
(2) "Public deposits," "public moneys," and "treasurer"
mean those terms as defined in section 135.01 of the Revised
Code, but also have the same meanings as are set forth in section
135.31 of the Revised Code.
(3) "Subdivision" means that term as defined in section
135.01 of the Revised Code, but also includes a county.
(B) In lieu of the pledging requirements prescribed in
sections 135.18 and 135.37 of the Revised Code, an institution
designated as a public depository at its option may pledge a
single pool of eligible securities to secure the repayment of all
public moneys deposited in the institution and not otherwise
secured pursuant to law, provided that at all times the total MARKET
value of the securities so pledged, based on the valuations
prescribed in division (C) of this section, is at least equal to
one hundred ten FIVE per cent of the total amount of all public
deposits to be secured by the pooled securities, including the
portion of such deposits covered by any federal deposit
insurance. Each such institution shall carry in its accounting
records at all times a general ledger or other appropriate
account of the total amount of all public deposits to be secured
by the pool, as determined at the opening of business each day,
and the total MARKET value of securities pledged to secure such
deposits.
(C) The following securities, at the specified valuations,
DESCRIBED IN DIVISION (B) OF SECTION 135.18 of the Revised Code
shall be eligible as collateral for the purposes of division (B)
of this section, provided no such securities pledged as
collateral are at any time in default as to either principal or
interest:
(1) Obligations of or fully insured or fully guaranteed by
the United States or any federal government agency or instrumentality: at
face value;
(2) Obligations partially insured or partially guaranteed
by any federal government agency or instrumentality: at face value;
(3) Obligations of or fully guaranteed by the federal
national mortgage association, federal home loan mortgage
corporation, federal farm, credit bank, or student loan marketing
association: at face value;
(4) Obligations of any state, county, municipal
corporation, or other legally constituted authority of any state,
or any instrumentality of any state, county, municipal
corporation, or other authority, which are secured as to the
payment of principal and interest by the holding in escrow of
obligations of the United States for which the full faith and
credit of the United States is pledged: at face value;
(5) Obligations of this state, or any county or other
legally constituted authority of this state, or any
instrumentality of this state, or such county or other authority:
at face value;
(6) Obligations of any other state: at ninety per cent of
face value;
(7) Obligations of any county, municipal corporation, or
other legally constituted authority of any other state, or any
instrumentality of such county, municipal corporation, or other
authority: at eighty per cent of face value;
(8) Notes representing loans made to persons attending or
planning to attend eligible institutions of education and to
their parents, and insured or guaranteed by the United States or
any agency, department, or other instrumentality thereof: at face value;
(9) Any other obligations the treasurer of state approves:
at the percentage of face value the treasurer of state prescribes;
(10) Shares of no-load money market mutual funds
consisting exclusively of obligations described in division
(C)(1), (2), or (3) of this section and repurchase agreements
secured by such obligations: at face value.
(D) The state and each subdivision shall have an undivided
security interest in the pool of securities pledged by a public
depository pursuant to division (B) of this section in the
proportion that the total amount of the state's or subdivision's
public moneys secured by the pool bears to the total amount of
public deposits so secured.
(E) An institution designated as a public depository shall
designate a qualified trustee and deposit with the trustee for
safekeeping the eligible securities pledged pursuant to division
(B) of this section. The institution shall give written notice
of the qualified trustee to any treasurer or treasurers
depositing public moneys for which such securities are pledged. The treasurer
shall accept the written receipt of the trustee
describing the pool of securities so deposited by the depository,
a copy of which also shall be delivered to the depository.
(F) Any federal reserve bank or branch thereof located in
this state, without compliance with Chapter 1111. of the Revised Code and
without becoming
subject to any other law
of this state relative to the exercise by corporations of trust
powers generally, is qualified to act as trustee for the
safekeeping of securities, under this section. Any institution
mentioned in section 135.03 or 135.32 of the Revised Code which holds a
certificate of qualification issued by the superintendent of financial
institutions or any
institution complying with sections 1111.04, 1111.05, and 1111.06 of the
Revised Code is qualified to act as trustee
for the safekeeping of securities under this section, other than
those belonging to itself or to an affiliate as defined in
division (A) of section 1101.01 of the Revised Code. Upon
application to the superintendent in writing by any such
institution, the
superintendent shall investigate the applicant and ascertain
whether or not it has been authorized to execute and accept
trusts in this state and has safe and adequate vaults and
efficient supervision thereof for the storage and safekeeping of
such securities. If the superintendent finds that the applicant
has been so authorized and does have such vaults and supervision
thereof, the superintendent shall approve the application and issue
a certificate
to that effect, the original or any certified copy of which shall
be conclusive evidence that the institution named therein is
qualified to act as trustee for the purposes of this section with
respect to securities other than those belonging to itself or to
an affiliate.
(G) The public depository at any time may substitute,
exchange, or release eligible securities deposited with a
qualified trustee pursuant to this section, provided that such
substitution, exchange, or release does not reduce the total
MARKET value of the securities, based on the valuations prescribed
in
division (C) of this section, to an amount that is less than one
hundred ten FIVE per cent of the total amount of public deposits
as
determined pursuant to division (B) of this section.
(H) Notwithstanding the fact that a public depository is
required to pledge eligible securities in certain amounts to
secure deposits of public moneys, a trustee shall have no duty or
obligation to determine the eligibility, market value, or face
value of any securities deposited with the trustee by a public
depository. This applies in all situations including, but not
limited to, a substitution or exchange of securities, but
excluding those situations effectuated by division (I) of this
section in which the trustee is required to determine face and
market value.
(I) If the public depository fails to pay over any part of
the public deposits made therein as provided by law and secured
pursuant to division (B) of this section, the treasurer shall
give written notice of this failure to the qualified trustee
holding the pool of securities pledged against public moneys
deposited in the depository, and at the same time shall send a
copy of this notice to the depository. Upon receipt of such
notice, the trustee shall transfer to the treasurer for public
sale such of the pooled securities as may be necessary to produce
an amount equal to the deposits made by the treasurer and not
paid over, less the portion of such deposits covered by any
federal deposit insurance, plus any accrued interest due on such
deposits; however, such THE amount shall not exceed the state's
or
subdivision's proportional security interest in the market value
of the pool as of the date of the depository's failure to pay
over the deposits, as such interest and value are determined by
the trustee. The treasurer shall sell at public sale any of the
bonds or other securities so transferred. Thirty days' notice of
such sale shall be given in a newspaper of general circulation at
Columbus, in the case of the treasurer of state, and at the
county seat of the county in which the office of the treasurer is
located, in the case of any other treasurer. When a sale of
bonds or other securities has been so made and upon payment to
the treasurer of the purchase money, the treasurer shall transfer
such bonds or securities whereupon the absolute ownership of such
bonds or securities shall pass to the purchasers. Any surplus
after deducting the amount due the state or subdivision and
expenses of sale shall be paid to the public depository.
(J) Any charges or compensation of a designated trustee
for acting as such under this section shall be paid by the public
depository and in no event shall be chargeable to the state or
subdivision or to the treasurer or to any officer of the state or
subdivision. Such THE charges or compensation shall not be a
lien or
charge upon the securities deposited for safekeeping prior or
superior to the rights to and interests in such securities of the
state or subdivision or of the treasurer. The treasurer and the treasurer's
bonders or surety shall be relieved from any liability to
the state or subdivision or to the public depository for the loss or
destruction of any securities deposited with a qualified trustee
pursuant to this section.
(K) In lieu of placing its unqualified endorsement on each
security, a public depository pledging securities pursuant to
division (B) of this section that are not negotiable without its
endorsement or assignment may furnish to the qualified trustee
holding the securities an appropriate resolution and irrevocable
power of attorney authorizing the trustee to assign the
securities. The resolution and power of attorney shall conform
to such terms and conditions as the trustee prescribes.
(L) Upon request of a treasurer no more often than four
times per year, a public depository shall report the amount of
public moneys deposited by the treasurer and secured pursuant to
division (B) of this section, and the total MARKET value, based on
the
valuations prescribed in division (C) of this section, of the
pool of securities pledged to secure public moneys held by the
depository, including those deposited by the treasurer. Upon
request of a treasurer no more often than four times per year, a
qualified trustee shall report such THE total MARKET
value of the pool
of
securities deposited with it by the depository and shall provide
an itemized list of the securities in the pool. These reports
shall be made as of the date the treasurer specifies.
Sec. 135.33. (A) The board of county commissioners shall
meet every two FOUR years in the month next preceding the date
of the
expiration of its current period of designation for the purpose
of designating its public depositories of active moneys for the
next succeeding two-year FOUR-YEAR period commencing on the date
of
expiration of the preceding period.
At least sixty days before such THE meeting, the county
treasurer shall submit to the board an estimate of the aggregate
amount of public moneys that might be available for deposit as
active moneys at any one time during the next two-year FOUR-YEAR
period. Upon receipt of such estimate, the board shall immediately notify
all eligible institutions that might desire to be designated as
such public depositories of the date on which the designation is
to be made; the amount that has been estimated to be available
for deposit; and the date fixed as the last date on which
applications may be submitted, that shall not be more than thirty
days or less than ten days prior to the date set for the meeting
designating public depositories.
(B) Any eligible institution described in division (A) of
section 135.32 of the Revised Code that has an office located
within the territorial limits of the county is eligible to become
a public depository of the active moneys of the county. Each
eligible institution desiring to be a public depository of such
active moneys shall, not more than thirty days or less than ten
days prior to the date fixed by this section, make application
therefor in writing to the board of county commissioners. Such
THE application may specify the maximum amount of such public moneys
that the applicant desires to receive and have on deposit at any
time during the period covered by the designation. Each
application shall be accompanied by a financial statement of the
applicant, under oath of its cashier, treasurer, or other officer
as of the date of its latest report to the superintendent of
banks or comptroller of the currency, and adjusted to show any
changes therein prior to the date of the application, that shall
include a statement of its public and nonpublic deposits.
(C) The board of county commissioners, upon recommendation
of the treasurer, shall designate, by resolution, one or more
eligible institutions as public depositories for active moneys.
In case the aggregate amount of active moneys applied for by
institutions within the county is less than the amount estimated
to be available for deposit, the board may designate as a public
depository one or more eligible institutions that are
conveniently located. The original resolution of designation
shall be certified to the treasurer and any institution
designated as a public depository.
(D) No service charge shall be made against any deposit of
active moneys, or collected or paid, unless such service charge
is the same as is customarily imposed by institutions receiving
money on deposit subject to check, in which event the charge may
be paid.
(E) Notwithstanding division (C) of this section, the
board of county commissioners may authorize, by resolution, the
treasurer to deposit money necessary to pay the principal and
interest on bonds and notes, and any fees incident thereto, in
any bank within this state.
Moneys so deposited shall be transferred by the treasurer
according to the terms of the agreement with the bank but shall
remain as public moneys until such time as they are actually paid
out by the bank. Until such time as payments become due and
payable on such principal or interest, the bank shall invest any
moneys in the account in interest-bearing obligations at the
highest, reasonable rate of interest obtainable.
So long as moneys remain in the account, the bank shall
deliver to the treasurer, at the end of each month, a statement
showing an accounting of all activities in the account during the
preceding month including, but not limited to, all payments made,
all interest earned, and the beginning and ending balances,
together with any coupons redeemed since the preceding statement
was issued.
Sec. 135.341. (A) There shall be a county investment advisory
committee consisting of three members: two county
commissioners to be
designated by the board of county commissioners, and
the county treasurer.
Notwithstanding the preceding sentence, the board of county
commissioners may declare that all three county commissioners shall serve on
the county investment advisory committee. If the board so declares, the
county investment advisory committee shall consist of five members: the three
county commissioners, the county treasurer, and the clerk of the court of
common pleas of the county.
(B) The committee shall elect its own chairperson, and committee members
shall receive no additional compensation for the performance of
their duties as committee members.
(C) The committee shall establish
written county investment policies and shall meet at least once
every three months, to review or revise
its policies and to advise the investing authority on the
county investments in order to ensure the best and safest return
of funds available to the county for deposit or investment. Any member of
the county investment advisory committee, upon giving five days' notice, may
call a meeting of the committee. The
committee's policies may establish a limit on the period of time
that moneys may be invested in any particular type of investment.
(D) The committee is authorized to retain the services of an
investment advisor, provided that the advisor is LICENSED BY THE DIVISION
OF SECURITIES UNDER SECTION 1707.141 of the Revised Code OR IS registered with the
securities and exchange commission, and possesses public funds
investment
management experience, specifically in the area of state and local government
investment portfolios, or the advisor is an eligible institution mentioned in
section 135.03 of the Revised Code.
(E) Nothing in this section affects the authority of any of the
officers mentioned in section 325.27 of the Revised Code to contract for the
services of fiscal and management consultants pursuant to section 325.17 of
the Revised Code.
Sec. 135.35. (A) The investing authority shall deposit or
invest any part or all of the county's inactive moneys and shall
invest all of the money in the county library and local
government support fund when required by section 135.352 of the
Revised Code. The following classifications of securities and
obligations are eligible for such deposit or investment:
(1) United States treasury bills, notes, bonds, or any other obligation or
security issued by the United States treasury or any other obligation
guaranteed as to principal or interest by the United States.
Nothing in the classification of eligible securities and obligations set forth
in division (A)(1) of this section or in the classifications of eligible
securities and obligations set forth in divisions (A)(2) to
(9)(8) of this
section shall be construed to authorize any investment in stripped principal
or interest obligations of such eligible securities and obligations.
(2) Bonds, notes, debentures, or any other obligations or
securities issued by any federal government agency or
instrumentality, including but not limited to, the federal
national mortgage association, federal home loan bank, federal farm credit
bank, federal home loan mortgage corporation, government national mortgage
association, and student loan marketing association. All federal agency
securities shall be direct issuances of federal government agencies or
instrumentalities.
(3) Time certificates of deposit or savings or deposit
accounts, including, but not limited to, passbook accounts, in
any eligible institution mentioned in section 135.32 of the
Revised Code;
(4) Bonds and other obligations of this state or the political subdivisions
of this state, provided that such political subdivisions are located wholly or
partly within the same county as the investing authority;
(5) No-load money market mutual funds consisting
exclusively of obligations described in division (A)(1) or (2) of
this section and repurchase agreements secured by such
obligations, provided that investments in securities
described in this division are made only through eligible institutions
mentioned in section 135.32 of the Revised Code;
(6) The Ohio subdivision's fund as provided in section 135.45 of the Revised
Code.;
(7) Securities lending agreements with any eligible institution
mentioned in section 135.32 of the Revised Code that is a member of the
federal reserve system or federal home loan bank, under the terms of which
agreements the
investing authority lends securities and the eligible institution
agrees to simultaneously exchange either securities described in division
(A)(1) or (2) of this section or cash or both securities and cash,
equal value for equal value;
(8) Commercial paper issued by any corporation incorporated under the laws
of the United States or a state if both of the following
conditions apply:
(a) Two nationally recognized rating agencies rank the commercial
paper in either of their two highest categories;
(b) The total amount invested in commercial paper at any time
does
not exceed five per cent of the county's total average portfolio, as
determined and calculated by the investing authority.
(9) Bankers acceptances, if the following conditions are met:
(a) The acceptances mature in two hundred seventy days or fewer
from the date of settlement;
(b) The acceptances are eligible for purchase by the federal
reserve system;
(c) The total amount invested in bankers acceptances at any time
does not exceed ten per cent of the county's total average portfolio, as
determined and calculated by the investing authority
UP TO
TWENTY-FIVE PER CENT OF THE COUNTY'S TOTAL AVERAGE PORTFOLIO IN EITHER
OF THE FOLLOWING INVESTMENTS:
(a) COMMERCIAL PAPER NOTES ISSUED BY AN ENTITY THAT IS
DEFINED IN
DIVISION (D) OF SECTION 1705.01 OF THE REVISED CODE
AND THAT HAS
ASSETS EXCEEDING FIVE HUNDRED MILLION DOLLARS, TO WHICH NOTES ALL OF THE
FOLLOWING APPLY:
(i) THE NOTES ARE RATED AT THE TIME OF PURCHASE IN THE HIGHEST
CLASSIFICATION ESTABLISHED BY AT LEAST TWO NATIONALLY RECOGNIZED STANDARD
RATING SERVICES.
(ii) THE AGGREGATE VALUE OF THE NOTES DOES NOT EXCEED TEN PER
CENT
OF THE AGGREGATE VALUE OF THE OUTSTANDING COMMERCIAL PAPER OF THE ISSUING
CORPORATION.
(iii) THE NOTES MATURE NOT LATER THAN ONE HUNDRED EIGHTY DAYS
AFTER
PURCHASE.
(b) BANKERS ACCEPTANCES OF BANKS THAT ARE INSURED BY THE FEDERAL
DEPOSIT INSURANCE CORPORATION AND TO WHICH BOTH OF THE FOLLOWING
APPLY:
(i) THE OBLIGATIONS ARE ELIGIBLE FOR PURCHASE BY THE FEDERAL
RESERVE SYSTEM.
(ii) THE OBLIGATIONS MATURE NOT LATER THAN ONE HUNDRED EIGHTY
DAYS
AFTER PURCHASE.
NO INVESTMENT SHALL BE MADE PURSUANT TO DIVISION (A)(8) OF THIS
SECTION UNLESS THE INVESTING AUTHORITY HAS COMPLETED ADDITIONAL TRAINING
FOR MAKING THE INVESTMENTS AUTHORIZED BY DIVISION (A)(8) OF
THIS SECTION. THE TYPE AND AMOUNT OF ADDITIONAL TRAINING SHALL BE APPROVED BY
THE AUDITOR
OF STATE AND MAY BE CONDUCTED BY OR PROVIDED UNDER THE SUPERVISION OF THE
AUDITOR OF STATE.
(B) Nothing in the classifications of eligible obligations and securities
set forth in divisions (A)(1) to (9)(8) of this section shall
be
construed to authorize investment in a derivative, and no investing
authority shall invest any county inactive moneys or any moneys in
a county library and local government support fund in a derivative. For
purposes of this division, "derivative" means a financial instrument or
contract or obligation whose value or return is based upon or linked to
another asset or index, or both, separate from the financial instrument,
contract, or obligation itself. Any security, obligation, trust account, or
other instrument that is created from an issue of the United
States treasury or is created from an obligation of a federal agency
or instrumentality or is created from both is considered a derivative
instrument. An eligible investment described in this section with a variable
interest rate payment, based upon a single interest payment or single index
comprised of other eligible investments provided for in division
(A)(1) or (2) of this section, is not a derivative, provided that
such variable rate investment has a maximum maturity of two years.
(C) Any EXCEPT AS PROVIDED IN DIVISION (D) OF THIS
SECTION, ANY investment made pursuant to this section must mature within
five
years from the date of settlement, unless the investment is matched to a
specific obligation or debt of the
county, and the investment is specifically approved by the investment advisory
committee.
(D) The investing authority may also enter into a written
repurchase agreement with any eligible institution
mentioned in section 135.32 of the Revised Code or any eligible securities
dealer pursuant to division (J) of this section, under the terms of which
agreement the investing authority purchases and the eligible
institution or dealer agrees
unconditionally to repurchase any of the securities listed in
division (A)(1) or (2) DIVISIONS (B)(1) TO (5), EXCEPT
LETTERS OF CREDIT DESCRIBED IN DIVISION (B)(2),
of this section 135.18 of the Revised Code. The market value of
securities subject to an overnight WRITTEN repurchase agreement must
exceed the
principal value of the overnight WRITTEN repurchase agreement by at
least two per
cent. A term WRITTEN repurchase agreement must exceed the
principal
value of the
overnight WRITTEN repurchase agreement, by at least two per cent. A
term
WRITTEN repurchase
agreement shall not exceed thirty days, and the market
value of securities subject to a term WRITTEN repurchase
agreement must exceed the
principal value of the term WRITTEN repurchase agreement by at
least two per cent and
be marked to market daily. All securities purchased pursuant to this division
shall be delivered into the
custody of the investing authority or the qualified custodian of the investing
authority or an agent designated by the investing authority. A WRITTEN
repurchase
agreement with an eligible securities dealer shall be transacted on a delivery
versus payment basis. The agreement
shall contain the requirement that for each transaction pursuant
to the agreement the participating institution shall provide all
of the following information:
(1) The par value of the securities;
(2) The type, rate, and maturity date of the securities;
(3) A numerical identifier generally accepted in the
securities industry that designates the securities.
No investing authority shall enter into a written repurchase
agreement under the terms of which the investing authority agrees to sell
securities owned by
the county to a purchaser and agrees with that purchaser to unconditionally
repurchase those securities.
(E) No investing authority shall make an investment
under this section, unless the investing authority, at the time of making the
investment, reasonably expects that the investment can
be held until its maturity. The investing authority's written investment
policy shall specify the conditions under which an investment may be redeemed
or sold prior to maturity.
(F) No investing authority shall pay a county's inactive moneys
or moneys of a county library and local government support fund into a fund
established by another subdivision, treasurer, governing board, or investing
authority, if that fund was established by the subdivision, treasurer,
governing board, or investing authority for the purpose of investing or
depositing the public moneys of other subdivisions. This division does not
apply to the payment of public moneys into either of the following:
(1) The Ohio subdivision's fund pursuant to division (A)(6) of this section;
(2) A fund created solely for the purpose of acquiring, constructing, owning,
leasing, or operating municipal utilities pursuant to the authority provided
under section 715.02 of the Revised Code or Section 4 of Article XVIII, Ohio
Constitution.
For purposes of division (F) of this section, "subdivision" includes
a county.
(G) The use of leverage, in which the county uses its current
investment assets as collateral for the purpose of purchasing other assets, is
prohibited. The issuance of taxable notes for the purpose of arbitrage is
prohibited. Contracting to sell securities not owned by the county, for the
purpose of purchasing such securities on the speculation that bond prices will
decline, is prohibited.
(H) Any securities, certificates of deposit, deposit
accounts, or any other documents evidencing deposits or
investments made under authority of this section shall be issued
in the name of the county with the county treasurer or investing
authority as the designated payee. If any such deposits or
investments are registrable either as to principal or interest,
or both, they shall be registered in the name of the treasurer.
(I) The investing authority shall be responsible for the
safekeeping of all documents evidencing a deposit or investment
acquired under this section including, but not limited to,
safekeeping receipts evidencing securities deposited with a
qualified trustee, as provided in section 135.37 of the Revised
Code, and documents confirming the purchase of securities under
any repurchase agreement under this section shall be deposited
with a qualified trustee, provided, however, that the qualified
trustee shall be required to report to the investing authority,
auditor of state, or an authorized outside auditor at any time
upon request as to the identity, market value, and location of
the document evidencing each security, and that if the
participating institution is a designated depository of the
county for the current period of designation, the securities that
are the subject of the repurchase agreement may be delivered to
the treasurer or held in trust by the participating institution
on behalf of the investing authority.
Upon the expiration of the term of office of an investing
authority or in the event of a vacancy in the office for any
reason, the officer or the officer's legal representative
shall transfer and deliver to the officer's successor all documents
mentioned in this division for which the officer has been
responsible for safekeeping. For
all such documents transferred and delivered, such officer shall
be credited with, and the officer's successor shall be
charged with, the amount of moneys so evidenced by such documents.
(J)(1) All investments, except for investments in securities
described in divisions (A)(5) and (6) of this
section, shall be made only
through a member of the national association of securities
dealers, through a bank, savings bank, or savings and loan
association regulated by the
superintendent of financial institutions, or through an institution regulated
by the comptroller of the currency, federal deposit
insurance corporation, or board of governors of the federal reserve
system.
(2) Payment for investments shall be made only upon the delivery of
securities representing
such investments to the treasurer, investing authority, or
qualified trustee. If the securities transferred are not
represented by a certificate, payment shall be made only upon
receipt of confirmation of transfer from the custodian by the
treasurer, governing board, or qualified trustee.
(K)(1) Except as otherwise provided in division (K)(2) of
this section, no investing authority shall make an investment or deposit under
this section, unless there is on file with the auditor of state a written
investment policy approved by the investing authority. The policy shall
require that all entities conducting investment business with the investment
authority shall sign the investment policy of that investment authority. All
brokers, dealers, and financial institutions, described in division (J)(1) of
this section,
initiating transactions with the investment authority by giving advice or
making investment recommendations shall sign the investment authority's
investment policy thereby acknowledging their agreement to abide by the
policy's contents. All brokers, dealers, and financial institutions,
described in division (J)(1) of this section, executing transactions initiated
by the investment authority, having read the policy's contents, shall sign the
investment policy thereby acknowledging their comprehension and receipt.
(2) If a written investment policy described in division (K)(1)
of this section is not filed on behalf of the county with the auditor of
state, the investing authority of that county shall invest the county's
inactive moneys and moneys of the county library and local government support
fund only in time certificates of deposits or savings or deposit accounts
pursuant to division (A)(3) of this section or the
Ohio subdivision's fund pursuant to division (A)(6) of this section.
(L)(1) The investing authority shall establish and maintain an
inventory of all obligations and securities acquired by the investing
authority pursuant to this section. The inventory shall
include a description of each obligation or security, including type, cost,
par value, maturity date, settlement date, and any coupon rate.
(2) The investing authority shall also keep a complete record of all
purchases and sales of the obligations and securities made pursuant to this
section.
(3) The investing authority shall maintain a monthly portfolio report and
issue a quarterly investment COPY OF THE MONTHLY PORTFOLIO
report describing such investments to the county
investment advisory committee, detailing the current inventory of all
obligations and securities, all transactions during the month that affected
the inventory, any income received from the obligations and securities, and
any investment expenses paid, and stating the names of any persons effecting
transactions on behalf of the investing authority.
(4) The monthly portfolio report and the quarterly investment report
shall
be A public records RECORD and available for inspection
under section 149.43 of the Revised Code.
(5) The inventory, AND the monthly portfolio report, and the
quarterly
investment report shall be on standard forms approved by the auditor of state
and shall be filed with the board of county commissioners.
(M) An investing authority may enter into a
written investment or deposit agreement that includes a
provision under which the parties agree to submit to
nonbinding arbitration to settle any controversy that may arise
out of the agreement, including any controversy pertaining to
losses of public moneys resulting from investment or deposit.
The arbitration provision shall
be set forth entirely in the agreement, and the agreement shall
include a conspicuous notice to the
parties that any party to the arbitration may apply to the court of common
pleas of the county in which the arbitration was held for an order to vacate,
modify, or correct the award. Any such party may also apply to the court for
an order to change venue to a court of common pleas located more than one
hundred miles from the county in which the investing authority is located.
For purposes of this division, "investment or deposit agreement" means any
agreement between an investing authority and a person, under which agreement
the person agrees to invest, deposit, or otherwise manage, on behalf of the
investing authority, a county's inactive moneys or moneys in a county library
and local government support fund, or agrees to provide investment advice to
the investing authority.
(N) An investment held in the county portfolio on the effective
date of this amendment SEPTEMBER 27, 1996, that
was a legal investment under the law as it existed
before the effective date of this amendment SEPTEMBER
27, 1996, may be held until maturity, or if
the investment does not have a maturity date the investment may be held until
five years from the effective date of this amendment
SEPTEMBER 27, 1996, regardless of whether
the investment would qualify as a legal investment under the terms of this
section as amended.
Sec. 135.37. (A) Any institution described in section
135.32 of the Revised Code shall, at the time it receives a
deposit of public moneys under section 135.33 or 135.35 of the
Revised Code, pledge to and deposit with the investing authority,
as security for the repayment of all public moneys to be
deposited, eligible securities of aggregate market value equal to
or in excess of the amount of public moneys to be at the time so
deposited. Any securities listed in division (B) of section
135.18 of the Revised Code are eligible for such purpose. The
collateral so pledged or deposited may be in an amount that when
added to the portion of the deposit insured by the federal
deposit insurance corporation or any other agency or
instrumentality of the federal government will, in the aggregate,
equal or exceed the amount of public moneys so deposited;
provided that, when an investment of inactive moneys consists of
the purchase of one or more of the type of securities listed in
division (A)(1) or (2) of section 135.35 of the Revised Code, no
additional collateral need be pledged or deposited.
The investing authority also may require or accept surety
company bonds as collateral for public deposits, subject to the
provisions of divisions (A) to (E) of this section, and may
require that additional eligible securities be pledged or
deposited when depreciation occurs in the market value of any
securities pledged or deposited.
(B) The public depository may, at any time, provide for
the exchange or substitution of securities for other eligible
securities or the release of securities when the amount of public
moneys on deposit does not require that they be pledged or
deposited, by notifying the investing authority of its intent to
take such action.
Upon proper notification of the public depository's desire
for release of securities, the investing authority may sign a
release of such securities provided that the aggregate amount of
collateral remaining pledged or deposited meets the requirements
of divisions (A) to (E) of this section.
When a public depository desires to exchange or substitute
securities for other eligible securities, the investing authority
may release the securities pledged or deposited after the deposit
of other securities having a current market value equal to or
greater than the current market value of securities then on
deposit or after a safekeeping receipt has been received
evidencing the deposit and pledge of such securities.
(C) Upon request from the investing authority, the trustee
or the public depository shall furnish a statement of the
securities pledged against the public moneys deposited in the
public depository.
(D) If a public depository fails to pay over any part of
any public deposit made as provided by law, the investing
authority shall sell any pledged or deposited securities, as
prescribed in division (C) of section 135.18 of the Revised Code.
(E) A public depository may designate, in accordance with
the provisions of division (D) of section 135.18 of the Revised
Code, a trustee for the safekeeping of any pledged securities.
Such trustee shall be any bank or other institution eligible as a
trustee under division (I) of section 135.18 of the Revised Code,
except that, for the purposes of this section, a bank to which a
certificate of qualification is issued shall be an institution
mentioned in division (A) of section 135.32 of the Revised Code.
(F) In lieu of the pledging requirements prescribed in
divisions (A) to (E) of this section, an institution designated
as a public depository may pledge securities pursuant to section
135.181 of the Revised Code.
Sec. 307.55. (A) No claims against the county shall be paid
otherwise than upon
the allowance of the board of county commissioners, upon the warrant,
INCLUDING AN ELECTRONIC WARRANT AUTHORIZING DIRECT DEPOSIT FOR PAYMENT OF A
COUNTY OBLIGATION IN ACCORDANCE WITH DIVISION (F) OF SECTION 9.37
of the Revised Code,
of the county auditor, except in those cases in which the amount due is fixed
by law
or is authorized to be fixed by some other person or tribunal, in which case
it shall be paid upon the warrant of the auditor upon the proper certificate
of the person or tribunal allowing the claim.
(B) No public money shall be disbursed by the board or any of its
members, but
shall be disbursed by the county treasurer, upon the warrant,
INCLUDING AN ELECTRONIC WARRANT AUTHORIZING DIRECT DEPOSIT FOR PAYMENT OF A
COUNTY OBLIGATION IN ACCORDANCE WITH DIVISION (F) OF SECTION 9.37
of the Revised Code, of the auditor
specifying the name of the party entitled to such money, on what account, and
upon whose allowance, if not fixed by law.
Sec. 319.16. The county auditor shall issue warrants, INCLUDING
ELECTRONIC WARRANTS AUTHORIZING DIRECT DEPOSIT FOR PAYMENT OF COUNTY
OBLIGATIONS IN ACCORDANCE WITH DIVISION (F) OF SECTION 9.37
of the Revised Code, on
the county treasurer for all moneys payable from the county
treasury, upon presentation of the proper order or voucher and
evidentiary matter for the moneys, and keep a record of all such
warrants showing the number, date of issue, amount for which
drawn, in whose favor, for what purpose, and on what fund. The
auditor shall not issue a warrant for the payment of any claim
against the county, unless it is allowed by the board of county
commissioners, except where the amount due is fixed by law or is
allowed by an officer or tribunal, including a county board of
mental health or county board of mental retardation and
developmental disabilities, so authorized by law. If the auditor
questions the validity of an expenditure that is within available
appropriations and for which a proper order or voucher and
evidentiary matter is presented, the auditor shall notify the
board, officer, or tribunal who presented the voucher. If the
board, officer, or tribunal determines that the expenditure is
valid and the auditor continues to refuse to issue the
appropriate warrant on the county treasury, a writ of mandamus
may be sought. The court shall issue a writ of mandamus for
issuance of the warrant if the court determines that the claim is
valid.
Evidentiary matter includes original invoices, receipts,
bills and checks, and legible copies of contracts.
Sec. 321.15. No money shall be paid from the county treasury, or transferred
to any person for disbursement, except on the warrant of the county
auditor, INCLUDING AN ELECTRONIC WARRANT AUTHORIZING DIRECT DEPOSIT,
IN ACCORDANCE WITH DIVISION (F) OF SECTION 9.37 of the Revised Code, FOR PAYMENT OF
COUNTY OBLIGATIONS.
Sec. 321.16. (A) When a warrant drawn on him as THE
county
treasurer by the county
auditor is presented for payment, if there is money in the county treasury or
depository to the credit of the fund on which it is drawn, and the warrant is
endorsed by the payee thereof, the treasurer shall redeem it by payment of
cash or by check on the depository.
(B) THE WARRANT, AND ALL INFORMATION RELATED TO THE PRESENTMENT
OF THE WARRANT, MAY BE PROVIDED ELECTRONICALLY TO THE COUNTY TREASURER.
Sec. 321.17. When a warrant is presented to the county treasurer for payment,
and is not paid, for want of money belonging to the particular fund on which
it is drawn, the treasurer shall indorse RECORD the warrant,
"Not AS NOT paid for want of
funds," with the date of its presentation, and sign his name to the
warrant.
Such THE warrant shall thereafter bear interest at the rate of
six per cent per
annum YEAR. A memorandum of all such warrants shall be kept by
the treasurer in a
book for that purpose.
Section 2. That existing sections 9.37, 129.60, 135.12, 135.14, 135.18,
135.181, 135.33, 135.341, 135.35, 135.37, 307.55, 319.16, 321.15, 321.16, and
321.17 of the Revised
Code are hereby repealed.
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