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H. B. No. 507 As Reported by the House Finance and Appropriations CommitteeAs Reported by the House Finance and Appropriations Committee
128th General Assembly | Regular Session | 2009-2010 |
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Cosponsors:
Representatives Domenick, Mandel, Garland, Harris, Gardner, Grossman, Driehaus, Weddington, Yuko, Heard, Sykes, Bolon, Fende, Goyal, Luckie, Boyd
A BILL
To amend section 135.143 of the Revised Code to alter
the authority of the Treasurer of State to invest
in single-issuer debt.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO:
Section 1. That section 135.143 of the Revised Code be
amended to read as follows:
Sec. 135.143. (A) The treasurer of state may invest or
execute transactions for any part or all of the interim funds of
the state in the following classifications of obligations:
(1) United States treasury bills, notes, bonds, or any other
obligations or securities issued by the United States treasury or
any other obligation guaranteed as to principal and interest by
the United States;
(2) Bonds, notes, debentures, or any other obligations or
securities issued by any federal government agency or
instrumentality;
(3) Bonds and other direct obligations of the state of Ohio
issued by the treasurer of state and of the Ohio public facilities
commission, the Ohio building authority, and the Ohio housing
finance agency;
(4)(a) Written repurchase agreements with any eligible Ohio
financial institution that is a member of the federal reserve
system or federal home loan bank or any recognized United States
government securities dealer, under the terms of which agreement
the treasurer of state purchases and the eligible financial
institution or dealer agrees unconditionally to repurchase any of
the securities that are listed in division (A)(1), (2), or (6) of
this section and that will mature or are redeemable within ten
years from the date of purchase. The market value of securities
subject to these transactions must exceed the principal value of
the repurchase agreement by an amount specified by the treasurer
of state, and the securities must be delivered into the custody of
the treasurer of state or the qualified trustee or agent
designated by the treasurer of state. 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:
(i) The par value of the securities;
(ii) The type, rate, and maturity date of the securities;
(iii) A numerical identifier generally accepted in the
securities industry that designates the securities.
(b) The treasurer of state also may sell any securities,
listed in division (A)(1), (2), or (6) of this section, regardless
of maturity or time of redemption of the securities, under the
same terms and conditions for repurchase, provided that the
securities have been fully paid for and are owned by the treasurer
of state at the time of the sale.
(5) Securities lending agreements with any eligible financial
institution that is a member of the federal reserve system or
federal home loan bank or any recognized United States government
securities dealer, under the terms of which agreements the
treasurer of state lends securities and the eligible financial
institution or dealer agrees to simultaneously exchange similar
securities or cash, equal value for equal value.
Securities and cash received as collateral for a securities
lending agreement are not interim funds of the state. The
investment of cash collateral received pursuant to a securities
lending agreement may be invested only in such instruments
specified by the treasurer of state in accordance with a written
investment policy.
(6) Various forms of commercial paper issued by any
corporation that is incorporated under the laws of the United
States or a state, which notes are rated at the time of purchase
in the two highest categories by two nationally recognized rating
agencies, provided that the total amount invested under this
section in any commercial paper at any time shall not exceed
twenty-five per cent of the state's total average portfolio, as
determined and calculated by the treasurer of state;
(7) Bankers acceptances, maturing in two hundred seventy days
or less, which are eligible for purchase by the federal reserve
system, provided that the total amount invested in bankers
acceptances at any time shall not exceed ten per cent of the
state's total average portfolio, as determined and calculated by
the treasurer of state;
(8) Certificates of deposit in eligible institutions applying
for interim moneys as provided in section 135.08 of the Revised
Code, including linked deposits as provided in sections 135.61 to
135.67 of the Revised Code, agricultural linked deposits as
provided in sections 135.71 to 135.76 of the Revised Code, and
housing linked deposits as provided in sections 135.81 to 135.87
of the Revised Code;
(9) The state treasurer's investment pool authorized under
section 135.45 of the Revised Code;
(10) Debt interests, other than commercial paper described in
division (A)(6) of this section, rated at the time of purchase in
the three highest categories by two nationally recognized rating
agencies and issued by corporations that are incorporated under
the laws of the United States or a state, or issued by foreign
nations diplomatically recognized by the United States government,
or any instrument based on, derived from, or related to such
interests. All interest and principal shall be denominated and
payable in United States funds. The, provided that:
(a) The investments
made under division (A)(10) of this
section in debt interests shall not exceed in the aggregate
twenty-five per cent of the state's total average portfolio, as
determined and calculated by the treasurer of state. The;
(b) The investments made under division (A)(10) of this
section in debt interests issued by foreign nations shall not
exceed in the aggregate one per cent of the state's total average
portfolio, as determined and calculated by the treasurer of state.
The;
(c) The investments made under division (A)(10) of this
section in the debt interests of a single issuer shall not exceed
in the aggregate one-half of one per cent of the state's total
average portfolio, as determined and calculated by the treasurer
of state except that debt interests of a single issuer that is a
foreign nation shall not exceed in the aggregate one per cent of
the state's portfolio.
The treasurer of state shall invest under division (A)(10) of
this section in a debt interest issued by a foreign nation only if
the debt interest is backed by the full faith and credit of that
foreign nation, and provided that all interest and principal shall
be denominated and payable in United States funds. For
For purposes of division (A)(10) of this section, a debt
interest is rated in the three highest categories by two
nationally recognized rating agencies if either the debt interest
itself or the issuer of the debt interest is rated, or is
implicitly rated, at the time of purchase in the three highest
categories by two nationally recognized rating agencies.
For purposes of division (A)(10) of this section, the
"state's portfolio" means the state's total average portfolio, as
determined and calculated by the treasurer of state.
(11) No-load money market mutual funds consisting exclusively
of obligations described in division (A)(1), (2), or (6) of this
section and repurchase agreements secured by such obligations.
(12) Obligations of a board of education issued under
authority of section 133.10 or 133.301 of the Revised Code.
(B) Whenever, during a period of designation, the treasurer
of state classifies public moneys as interim moneys, the treasurer
of state shall notify the state board of deposit of such action.
The notification shall be given within thirty days after such
classification and, in the event the state board of deposit does
not concur in such classification or in the investments or
deposits made under this section, the board may order the
treasurer of state to sell or liquidate any of the 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 of state on the date fixed in such order at the then
current market price. Neither the treasurer of state nor the
members of the state board of deposit 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 these sales or liquidations is payable as other
expenses of the treasurer's office.
(C) If any securities or obligations invested in by the
treasurer of state pursuant to this section are registrable either
as to principal or interest, or both, such securities or
obligations shall be registered in the name of the treasurer of
state.
(D) The treasurer of state is responsible for the safekeeping
of all securities or obligations under this section. Any such
securities or obligations may be deposited for safekeeping as
provided in section 113.05 of the Revised Code.
(E) Interest earned on any investments or deposits authorized
by this section shall be collected by the treasurer of state and
credited by the treasurer of state to the proper fund of the
state.
(F) Whenever investments or deposits acquired under this
section mature and become due and payable, the treasurer of state
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.
(G) The treasurer of state and any board of education issuing
obligations referred to in division (A)(12) of this section may
enter into an agreement providing for:
(1) The purchase of those obligations by the treasurer of
state on terms and subject to conditions set forth in the
agreement;
(2) The payment by the board of education to the treasurer of
state of a reasonable fee as consideration for the agreement of
the treasurer of state to purchase those obligations; provided,
however, that the treasurer of state shall not be authorized to
enter into any such agreement with the board of education of a
school district that has an outstanding obligation with respect to
a loan received under authority of section 3313.483 of the Revised
Code.
(H) For purposes of division (G) of this section, a fee shall
not be considered reasonable unless it is set to recover only the
direct costs and a reasonable estimate of the indirect costs
associated with the purchasing of obligations of a school board
under division (G) of this section and any reselling of the
obligations or any interest in the obligations, including
interests in a fund comprised of the obligations. No money from
the general revenue fund shall be used to subsidize the purchase
or resale of these obligations.
(I) All money collected by the treasurer of state from the
fee imposed by division (G) of this section shall be deposited to
the credit of the state school board obligations fund, which is
hereby created in the state treasury. Money credited to the fund
shall be used solely to pay the treasurer of state's direct and
indirect costs associated with purchasing and reselling
obligations of a board of education under division (G) of this
section.
Section 2. That existing section 135.143 of the Revised Code
is hereby repealed.
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