To amend sections 135.61, 135.63, 135.65, and 135.66 and to enact sections 135.101, 135.102, 135.103, 135.104, 135.105, and 135.106 of the Revised Code to authorize the Treasurer of State to administer a linked deposit program designed to encourage personal savings and promote personal financial education and to revise the determination of interest rates under the Small Business Linked Deposit Program.

Section 1. That sections 135.61, 135.63, 135.65, and 135.66 be amended and sections 135.101, 135.102, 135.103, 135.104, 135.105, and 135.106 of the Revised Code be enacted to read as follows:

Sec. 135.101. As used in sections 135.101 to 135.106 of the Revised Code:

(A) "Eligible resident" means an individual who is a resident of Ohio and who completes the SaveNOW education program prescribed by section 135.104 of the Revised Code.

(B) "Eligible savings institution" means a financial institution that offers savings accounts available to residents of Ohio, that is a public depository of public money of the state under section 135.03 of the Revised Code, and that agrees to participate in the SaveNOW program under sections 135.101 to 135.106 of the Revised Code.

(C) "SaveNOW linked deposit" means a deposit placed by the treasurer of state with an eligible savings institution at a rate determined and calculated by the treasurer of state.

(D) "SaveNOW savings account" means an interest-bearing account that is opened by an eligible resident at an eligible savings institution and that complies with the requirements of section 135.104 of the Revised Code.

(E) "Premium savings rate" means the highest savings rate that is offered by an eligible savings institution for large deposits, as approved by and negotiated with the treasurer of state.

(F) "Program period" means the length of time, not to exceed two years, established by the treasurer of state that a SaveNOW savings account is eligible to receive the SaveNOW interest incentive.

Sec. 135.102. The general assembly finds that the personal savings rate among Ohioans has declined in recent years, that personal savings are important to the future prosperity of Ohio, and that personal savings must be encouraged and assisted. The SaveNOW program provided for in sections 135.101 to 135.106 of the Revised Code is intended to promote increased personal savings, which will materially contribute to the economic growth of Ohio and the financial security of its residents. Accordingly, it is declared to be the public policy of the state through the SaveNOW program to create an availability of higher-rate savings accounts for the purpose of increasing personal savings and promoting financial education among the residents of Ohio.

Sec. 135.103. The treasurer of state may invest in SaveNOW linked deposits under sections 135.101 to 135.106 of the Revised Code, provided that at the time of placing any SaveNOW linked deposits the combined amount of investments of public money of the state in linked deposits of any kind is not more than twelve per cent of the state's total average investment portfolio as determined by the treasurer of state. When deciding whether to invest in SaveNOW linked deposits, the treasurer of state shall give priority to the investment, liquidity, and cash flow needs of the state.

Sec. 135.104. (A) A resident of Ohio may participate in the SaveNOW program by agreeing to maintain a SaveNOW savings account at an eligible savings institution for the program period and by completing the SaveNOW education program. The SaveNOW education program shall include a financial literacy assessment and a financial literacy program established and administered by the treasurer of state.

(B) An eligible savings institution shall accept applications for a SaveNOW savings account from eligible residents on a first-come, first-served basis on forms prescribed by the treasurer of state. The eligible savings institution shall offer to eligible residents a SaveNOW savings account that satisfies all of the following:

(1) Opening and maintaining the account requires no minimum deposit;

(2) No fees are charged for opening or using the account; and

(3) All deposits in the account earn at least the premium savings rate.

(C) To provide an additional incentive for saving, a SaveNOW incentive rate of interest shall accrue to the average daily balance of deposits, up to five thousand dollars, in a SaveNOW savings account during the program period at a rate equal to up to three percentage points above the premium savings rate. The interest earnings arising from the SaveNOW incentive rate of interest shall be credited to the account in a lump sum at the conclusion of the program period.

(D) The interest earnings arising from the SaveNOW incentive rate of interest under division (C) of this section shall be deducted from the interest earned on the state's SaveNOW linked deposit at the end of the eligible program period.

(E) Not more than one SaveNOW savings account shall be held by an eligible resident during a program period. An individual holding a SaveNOW savings account jointly with another individual shall be considered to be holding such an account for the purposes of this division, unless the joint ownership is of an account opened by a parent, grandparent, or guardian for a minor or for a dependent adult.

Sec. 135.105.  (A) Upon the placement of a SaveNOW linked deposit with an eligible savings institution, the institution shall offer SaveNOW savings accounts to eligible residents under section 135.104 of the Revised Code. A certification of compliance with this section in the form and manner prescribed by the treasurer of state shall be required of the eligible savings institution.

(B) The treasurer of state shall take any and all steps necessary to implement the SaveNOW program and to monitor the compliance of eligible savings institutions, including the development of guidelines as necessary.

(C) Annually, by the first day of February, the treasurer of state shall report on the SaveNOW program for the preceding calendar year to the governor, the speaker of the house of representatives, and the president of the senate. The speaker shall transmit copies of the report to the chairpersons of the standing committees of the house of representatives that customarily consider legislation regarding finance, and the president of the senate shall transmit copies of the report to the chairpersons of the standing committees of the senate that customarily consider legislation regarding finance. The report shall set forth the SaveNOW linked deposits made by the treasurer of state under the program during the year and shall include a list of eligible savings institutions and the number of SaveNOW savings accounts at each of those institutions during the preceding year.

Sec. 135.106.  The state and the treasurer of state are not liable to any eligible savings institution or any eligible resident in any manner for the terms associated with SaveNOW savings accounts. Any misuse or misconduct on the part of an eligible savings institution or eligible resident does not in any manner affect the deposit agreement between the eligible savings institution and the treasurer of state.

Sec. 135.61.  As used in sections 135.61 to 135.67 of the Revised Code:

(A) "Eligible small business" means any person, including, but not limited to a person engaged in agriculture, that has all of the following characteristics:

(1) Is headquartered in this state;

(2) Maintains offices and operating facilities exclusively in this state and transacts business in this state;

(3) Employs fewer than one hundred fifty employees, the majority of whom are residents of this state;

(4) Is organized for profit.

(B) "Eligible lending institution" means a financial institution that is eligible to make commercial loans, is a public depository of state funds under section 135.03 of the Revised Code, and agrees to participate in the linked deposit program.

(C) "Linked deposit" means a certificate of deposit placed by the treasurer of state with an eligible lending institution at up to three per cent a rate below current market rates, as determined and calculated by the treasurer of state, provided the institution agrees to lend the value of such deposit, according to the deposit agreement provided in division (C) of section 135.65 of the Revised Code, to eligible small businesses at three per cent a rate that reflects an equal percentage rate reduction below the present borrowing rate applicable to each specific business at the time of the deposit of state funds in the institution.

Sec. 135.63.  The treasurer of state may invest in linked deposits under sections 135.61 to 135.67, agricultural linked deposits under sections 135.71 to 135.76, housing linked deposits under sections 135.81 to 135.87, and assistive technology device linked deposits under sections 135.91 to 135.97, and SaveNOW linked deposits under sections 135.101 to 135.106 of the Revised Code, provided that at the time of placement of any such linked deposit under sections 135.61 to 135.67 of the Revised Code, agricultural linked deposit, housing linked deposit, or assistive technology device linked deposit, the combined amount of investments in the linked deposits, agricultural linked deposits, housing linked deposits, and assistive technology device all such linked deposits is not more than twelve per cent of the state's total average investment portfolio as determined by the treasurer of state. When deciding whether to invest in the linked deposits, agricultural linked deposits, housing linked deposits, or assistive technology device any such linked deposits, the treasurer of state shall give priority to the investment, liquidity, and cash flow needs of the state.

Sec. 135.65.  (A) The treasurer of state may accept or reject a linked deposit loan package or any portion thereof, based on the treasurer's evaluation of the eligible small businesses included in the package and the amount of state funds to be deposited. When evaluating the eligible small businesses, the treasurer shall give priority to the economic needs of the area where the business is located and the ratio of state funds to be deposited to jobs sustained or created and shall also consider any reports, statements, or plans applicable to the business, the overall financial need of the business, and such other factors as the treasurer considers appropriate.

(B) Upon acceptance of the linked deposit loan package or any portion thereof, the treasurer of state may place certificates of deposit with the eligible lending institution at three per cent a rate below current market rates, as determined and calculated by the treasurer of state. When necessary, the treasurer may place certificates of deposit prior to acceptance of a linked deposit loan package.

(C) The eligible lending institution shall enter into a deposit agreement with the treasurer of state, which shall include requirements necessary to carry out the purposes of sections 135.61 to 135.67 of the Revised Code. Such requirements shall reflect the market conditions prevailing in the eligible lending institution's lending area. The agreement may include a specification of the period of time in which the lending institution is to lend funds upon the placement of a linked deposit, and shall include provisions for the certificates of deposit to be placed for any maturity considered appropriate by the treasurer of state not to exceed two years, and may be renewed for up to an additional two years at the option of the treasurer. Interest shall be paid at the times determined by the treasurer of state.

(D) Eligible lending institutions shall comply fully with Chapter 135. of the Revised Code.

Sec. 135.66.  (A) Upon the placement of a linked deposit with an eligible lending institution, such institution is required to lend such funds to each approved eligible small business listed in the linked deposit loan package required by division (D) of section 135.64 of the Revised Code and in accordance with the deposit agreement required by division (C) of section 135.65 of the Revised Code. The loan shall be at three per cent a rate that reflects a percentage rate reduction below the present borrowing rate applicable to each business that is equal to the percentage rate reduction below market rates at which the certificate of deposits that constitute the linked deposit were placed. A certification of compliance with this section in the form and manner as prescribed by the treasurer of state shall be required of the eligible lending institution.

(B) The treasurer of state shall take any and all steps necessary to implement the linked deposit program and monitor compliance of eligible lending institutions and eligible small businesses, including the development of guidelines as necessary. The treasurer of state and the department of development shall notify each other at least quarterly of the names of the businesses receiving financial assistance from their respective programs.

Annually, by the first day of February, the treasurer of state shall report on the linked deposits program for the preceding calendar year to the governor, the speaker of the house of representatives, and the president of the senate. The speaker of the house shall transmit copies of this report to the chairmen chairpersons of the standing committees in the house which customarily consider legislation regarding agriculture and small business, and the president of the senate shall transmit copies of this report to the chairmen chairpersons of the standing committees in the senate which customarily consider legislation regarding agriculture and small business. The report shall set forth the linked deposits made by the treasurer of state under the program during the year and shall include information regarding the nature, terms, and amounts of the loans upon which the linked deposits were based and the eligible small businesses to which the loans were made.

Section 2. That existing sections 135.61, 135.63, 135.65, and 135.66 of the Revised Code are hereby repealed.