Bill Text: OH SB86 | 2013-2014 | 130th General Assembly | Introduced

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Bill Title: To require the Treasurer of State and each county investing authority to invest at least 5% of the state's total average investment portfolio of interim funds and in each county's total average investment portfolio of inactive moneys, respectively, in precious metals by June 30th of each year.

Spectrum: Partisan Bill (Republican 2-0)

Status: (Introduced - Dead) 2013-03-19 - To Finance [SB86 Detail]

Download: Ohio-2013-SB86-Introduced.html

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As Introduced

130th General Assembly Regular Session 2013-2014

S. B. No. 86

Senator Jordan 

Cosponsor: Senator Seitz 

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A BILL

To amend sections 135.143, 135.35, 135.351, 135.353,

1

135.40, and 135.45 and to enact section 135.146 of

2

the Revised Code to require the Treasurer of State

3

and each county investing authority to invest at

4

least 5% of the state's total average investment

5

portfolio of interim funds and in each county's

6

total average investment portfolio of inactive

7

moneys, respectively, in precious metals by June

8

30th of each year.

9

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

Section 1. That sections 135.143, 135.35, 135.351, 135.353,	10
135.40, and 135.45 be amended and that section 135.146 of the	11
Revised Code be enacted to read as follows:	12

Sec. 135.143.  (A) The treasurer of state may invest or	13
execute transactions for any part or all of the interim funds of	14
the state in the following classifications of obligations:	15

(1) United States treasury bills, notes, bonds, or any other	16
obligations or securities issued by the United States treasury or	17
any other obligation guaranteed as to principal and interest by	18
the United States;	19

(2) Bonds, notes, debentures, or any other obligations or	20
securities issued by any federal government agency or	21
instrumentality;	22

(3) Bonds and other direct obligations of the state of Ohio	23
issued by the treasurer of state and of the Ohio public facilities	24
commission, the Ohio building authority, and the Ohio housing	25
finance agency;	26

(4)(a) Written repurchase agreements with any eligible Ohio	27
financial institution that is a member of the federal reserve	28
system or federal home loan bank or any recognized United States	29
government securities dealer, under the terms of which agreement	30
the treasurer of state purchases and the eligible financial	31
institution or dealer agrees unconditionally to repurchase any of	32
the securities that are listed in division (A)(1), (2), or (6) of	33
this section and that will mature or are redeemable within ten	34
years from the date of purchase. The market value of securities	35
subject to these transactions must exceed the principal value of	36
the repurchase agreement by an amount specified by the treasurer	37
of state, and the securities must be delivered into the custody of	38
the treasurer of state or the qualified trustee or agent	39
designated by the treasurer of state. The agreement shall contain	40
the requirement that for each transaction pursuant to the	41
agreement, the participating institution or dealer shall provide	42
all of the following information:	43

(i) The par value of the securities;

44

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

45

(iii) A numerical identifier generally accepted in the	46
securities industry that designates the securities.	47

(b) The treasurer of state also may sell any securities,	48
listed in division (A)(1), (2), or (6) of this section, regardless	49
of maturity or time of redemption of the securities, under the	50
same terms and conditions for repurchase, provided that the	51
securities have been fully paid for and are owned by the treasurer	52
of state at the time of the sale.	53

(5) Securities lending agreements with any eligible financial	54
institution that is a member of the federal reserve system or	55
federal home loan bank or any recognized United States government	56
securities dealer, under the terms of which agreements the	57
treasurer of state lends securities and the eligible financial	58
institution or dealer agrees to simultaneously exchange similar	59
securities or cash, equal value for equal value.	60

Securities and cash received as collateral for a securities	61
lending agreement are not interim funds of the state. The	62
investment of cash collateral received pursuant to a securities	63
lending agreement may be invested only in such instruments	64
specified by the treasurer of state in accordance with a written	65
investment policy.	66

(6) Various forms of commercial paper issued by any	67
corporation that is incorporated under the laws of the United	68
States or a state, which notes are rated at the time of purchase	69
in the two highest categories by two nationally recognized rating	70
agencies, provided that the total amount invested under this	71
section in any commercial paper at any time shall not exceed	72
twenty-five per cent of the state's total average portfolio, as	73
determined and calculated by the treasurer of state;	74

(7) Bankers acceptances, maturing in two hundred seventy days	75
or less, which are eligible for purchase by the federal reserve	76
system, provided that the total amount invested in bankers	77
acceptances at any time shall not exceed ten per cent of the	78
state's total average portfolio, as determined and calculated by	79
the treasurer of state;	80

(8) Certificates of deposit in eligible institutions applying	81
for interim moneys as provided in section 135.08 of the Revised	82
Code, including linked deposits as provided in sections 135.61 to	83
135.67 of the Revised Code, agricultural linked deposits as	84
provided in sections 135.71 to 135.76 of the Revised Code, and	85
housing linked deposits as provided in sections 135.81 to 135.87	86
of the Revised Code;	87

(9) The state treasurer's investment pool authorized under	88
section 135.45 of the Revised Code;	89

(10) Debt interests, other than commercial paper described in	90
division (A)(6) of this section, rated at the time of purchase in	91
the three highest categories by two nationally recognized rating	92
agencies and issued by corporations that are incorporated under	93
the laws of the United States or a state, or issued by foreign	94
nations diplomatically recognized by the United States government,	95
or any instrument based on, derived from, or related to such	96
interests, provided that:	97

(a) The investments in debt interests shall not exceed in the	98
aggregate twenty-five per cent of the state's portfolio;	99

(b) The investments in debt interests issued by foreign	100
nations shall not exceed in the aggregate one per cent of the	101
state's portfolio;	102

(c) The investments in the debt interests of a single issuer	103
shall not exceed in the aggregate one-half of one per cent of the	104
state's portfolio, except that debt interests of a single issuer	105
that is a foreign nation shall not exceed in the aggregate one per	106
cent of the state's portfolio.	107

The treasurer of state shall invest under division (A)(10) of	108
this section in a debt interest issued by a foreign nation only if	109
the debt interest is backed by the full faith and credit of that	110
foreign nation, and provided that all interest and principal shall	111
be denominated and payable in United States funds.	112

For purposes of division (A)(10) of this section, a debt	113
interest is rated in the three highest categories by two	114
nationally recognized rating agencies if either the debt interest	115
itself or the issuer of the debt interest is rated, or is	116
implicitly rated, at the time of purchase in the three highest	117
categories by two nationally recognized rating agencies.	118

For purposes of division (A)(10) of this section, the	119
"state's portfolio" means the state's total average portfolio, as	120
determined and calculated by the treasurer of state.	121

(11) No-load money market mutual funds consisting exclusively	122
of obligations described in division (A)(1), (2), or (6) of this	123
section and repurchase agreements secured by such obligations.	124

(12) Obligations of a political subdivision issued under	125
Chapter 133. of the Revised Code and identified in an agreement	126
described in division (G) of this section.	127

(B) Whenever, during a period of designation, the treasurer	128
of state classifies public moneys as interim moneys, the treasurer	129
of state shall notify the state board of deposit of such action.	130
The notification shall be given within thirty days after such	131
classification and, in the event the state board of deposit does	132
not concur in such classification or in the investments or	133
deposits made under this section, the board may order the	134
treasurer of state to sell or liquidate any of the investments or	135
deposits, and any such order shall specifically describe the	136
investments or deposits and fix the date upon which they are to be	137
sold or liquidated. Investments or deposits so ordered to be sold	138
or liquidated shall be sold or liquidated for cash by the	139
treasurer of state on the date fixed in such order at the then	140
current market price. Neither the treasurer of state nor the	141
members of the state board of deposit shall be held accountable	142
for any loss occasioned by sales or liquidations of investments or	143
deposits at prices lower than their cost. Any loss or expense	144
incurred in making these sales or liquidations is payable as other	145
expenses of the treasurer's office.	146

(C) If any securities or obligations invested in by the	147
treasurer of state pursuant to this section are registrable either	148
as to principal or interest, or both, such securities or	149
obligations shall be registered in the name of the treasurer of	150
state.	151

(D) The treasurer of state is responsible for the safekeeping	152
of all securities or obligations under this section. Any such	153
securities or obligations may be deposited for safekeeping as	154
provided in section 113.05 of the Revised Code.	155

(E) Interest earned on any investments or deposits authorized	156
by this section shall be collected by the treasurer of state and	157
credited by the treasurer of state to the proper fund of the	158
state.	159

(F) Whenever investments or deposits acquired under this	160
section mature and become due and payable, the treasurer of state	161
shall present them for payment according to their tenor, and shall	162
collect the moneys payable thereon. The moneys so collected shall	163
be treated as public moneys subject to sections 135.01 to 135.21	164
of the Revised Code.	165

(G) The treasurer of state and any political subdivision	166
issuing obligations referred to in division (A)(12) of this	167
section, which obligations mature within one year from the	168
original date of issuance, may enter into an agreement providing	169
for:	170

(1) The purchase of those obligations by the treasurer of	171
state on terms and subject to conditions set forth in the	172
agreement;	173

(2) The payment by the political subdivision to the treasurer	174
of state of a reasonable fee as consideration for the agreement of	175
the treasurer of state to purchase those obligations; provided,	176
however, that the treasurer of state shall not be authorized to	177
enter into any such agreement with a board of education of a	178
school district that has an outstanding obligation with respect to	179
a loan received under authority of section 3313.483 of the Revised	180
Code.	181

(H) For purposes of division (G) of this section, a fee shall	182
not be considered reasonable unless it is set to recover only the	183
direct costs, a reasonable estimate of the indirect costs	184
associated with the purchasing of obligations of a political	185
subdivision under division (G) of this section and any reselling	186
of the obligations or any interest in the obligations, including	187
interests in a fund comprised of the obligations, and the	188
administration thereof. No money from the general revenue fund	189
shall be used to subsidize the purchase or resale of these	190
obligations.	191

(I) All money collected by the treasurer of state from the	192
fee imposed by division (G) of this section shall be deposited to	193
the credit of the state political subdivision obligations fund,	194
which is hereby created in the state treasury. Money credited to	195
the fund shall be used solely to pay the treasurer of state's	196
direct and indirect costs associated with purchasing and reselling	197
obligations of a political subdivision under division (G) of this	198
section.	199

(J) The treasurer of state may invest interim funds of the	200
state in precious metals as provided in section 135.146 of the	201
Revised Code.	202

(K) As used in this section, "political subdivision" means a	203
county, township, municipal corporation, or board of education of	204
a school district.	205

Sec. 135.146. (A) As used in this section:

206

(1) "Precious metal" includes, but is not limited to, gold,	207
silver, platinum, and palladium in the form of investment metal	208
bullion or investment coins.	209

(2) "Investment metal bullion" means any elementary precious	210
metal that has been put through a process of smelting or refining	211
and that is in such a state or condition that its value depends	212
upon its content and not upon its form. "Investment metal bullion"	213
does not include fabricated precious metal that has been processed	214
or manufactured for one or more specific and customary industrial,	215
professional, or artistic uses.	216

(3) "Investment coins" means numismatic coins or other forms	217
of money and legal tender manufactured of gold, silver, platinum,	218
palladium, or other metal under the laws of the United States or	219
any foreign nation with a fair market value greater than any	220
statutory or nominal value of such coins.	221

(B) By June thirtieth of each fiscal year, at least five per	222
cent of the state's total average investment portfolio, as	223
determined by the treasurer of state, shall be invested in	224
precious metals. The treasurer of state shall determine the form	225
of investments (bullion or coins) and the manner of storage and	226
system of security to be used to protect these investment assets.	227
The treasurer of state shall maintain physical possession of the	228
precious metals identified in its investment portfolio.	229

(C) By June thirtieth of each fiscal year, at least five per	230
cent of each county's total average investment portfolio of	231
inactive moneys, as determined by the county investing authority,	232
shall be invested in precious metals. The investing authority	233
shall determine the form of investments (bullion or coins) and the	234
manner of storage and system of security to be used to protect	235
these investment assets. The investing authority shall maintain	236
physical possession of the precious metals identified in its	237
investment portfolio.	238

(D) The treasurer of state and each county investing	239
authority may reinvest or readjust investment ratios annually, as	240
necessary, to maintain the goal of at least a five per cent	241
investment in precious metals as required by this section.	242

Sec. 135.35.  (A) The investing authority shall deposit or	243
invest any part or all of the county's inactive moneys and shall	244
invest all of the money in the county public library fund when	245
required by section 135.352 of the Revised Code. The following	246
classifications of securities and obligations are eligible for	247
such deposit or investment:	248

(1) United States treasury bills, notes, bonds, or any other	249
obligation or security issued by the United States treasury, any	250
other obligation guaranteed as to principal or interest by the	251
United States, or any book entry, zero-coupon United States	252
treasury security that is a direct obligation of the United	253
States.	254

Nothing in the classification of eligible securities and	255
obligations set forth in divisions (A)(2) to (11) of this section	256
shall be construed to authorize any investment in stripped	257
principal or interest obligations of such eligible securities and	258
obligations.	259

(2) Bonds, notes, debentures, or any other obligations or	260
securities issued by any federal government agency or	261
instrumentality, including, but not limited to, the federal	262
national mortgage association, federal home loan bank, federal	263
farm credit bank, federal home loan mortgage corporation,	264
government national mortgage association, and student loan	265
marketing association. All federal agency securities shall be	266
direct issuances of federal government agencies or	267
instrumentalities.	268

(3) Time certificates of deposit or savings or deposit	269
accounts, including, but not limited to, passbook accounts, in any	270
eligible institution mentioned in section 135.32 of the Revised	271
Code;	272

(4) Bonds and other obligations of this state or the	273
political subdivisions of this state;	274

(5) No-load money market mutual funds consisting exclusively	275
of obligations described in division (A)(1) or (2) of this section	276
and repurchase agreements secured by such obligations, provided	277
that investments in securities described in this division are made	278
only through eligible institutions mentioned in section 135.32 of	279
the Revised Code;	280

(6) The Ohio subdivision's fund as provided in section 135.45	281
of the Revised Code;	282

(7) Securities lending agreements with any eligible	283
institution mentioned in section 135.32 of the Revised Code that	284
is a member of the federal reserve system or federal home loan	285
bank or with any recognized United States government securities	286
dealer meeting the description in division (J)(1) of this section,	287
under the terms of which agreements the investing authority lends	288
securities and the eligible institution or dealer agrees to	289
simultaneously exchange similar securities or cash, equal value	290
for equal value.	291

Securities and cash received as collateral for a securities	292
lending agreement are not inactive moneys of the county or moneys	293
of a county public library fund. The investment of cash collateral	294
received pursuant to a securities lending agreement may be	295
invested only in instruments specified by the investing authority	296
in the written investment policy described in division (K) of this	297
section.	298

(8) Up to twenty-five per cent of the county's total average	299
portfolio in either of the following investments:	300

(a) Commercial paper notes issued by an entity that is	301
defined in division (D) of section 1705.01 of the Revised Code and	302
that has assets exceeding five hundred million dollars, to which	303
notes all of the following apply:	304

(i) The notes are rated at the time of purchase in the	305
highest classification established by at least two nationally	306
recognized standard rating services.	307

(ii) The aggregate value of the notes does not exceed ten per	308
cent of the aggregate value of the outstanding commercial paper of	309
the issuing corporation.	310

(iii) The notes mature not later than two hundred seventy	311
days after purchase.	312

(b) Bankers acceptances of banks that are insured by the	313
federal deposit insurance corporation and to which both of the	314
following apply:	315

(i) The obligations are eligible for purchase by the federal	316
reserve system.	317

(ii) The obligations mature not later than one hundred eighty	318
days after purchase.	319

No investment shall be made pursuant to division (A)(8) of	320
this section unless the investing authority has completed	321
additional training for making the investments authorized by	322
division (A)(8) of this section. The type and amount of additional	323
training shall be approved by the auditor of state and may be	324
conducted by or provided under the supervision of the auditor of	325
state.	326

(9) Up to fifteen per cent of the county's total average	327
portfolio in notes issued by corporations that are incorporated	328
under the laws of the United States and that are operating within	329
the United States, or by depository institutions that are doing	330
business under authority granted by the United States or any state	331
and that are operating within the United States, provided both of	332
the following apply:	333

(a) The notes are rated in the second highest or higher	334
category by at least two nationally recognized standard rating	335
services at the time of purchase.	336

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

337

(10) No-load money market mutual funds rated in the highest	338
category at the time of purchase by at least one nationally	339
recognized standard rating service and consisting exclusively of	340
obligations described in division (A)(1), (2), or (6) of section	341
135.143 of the Revised Code;	342

(11) Debt interests rated at the time of purchase in the	343
three highest categories by two nationally recognized standard	344
rating services and issued by foreign nations diplomatically	345
recognized by the United States government. All interest and	346
principal shall be denominated and payable in United States funds.	347
The investments made under division (A)(11) of this section shall	348
not exceed in the aggregate one per cent of a county's total	349
average portfolio.	350

The investing authority shall invest under division (A)(11)	351
of this section in a debt interest issued by a foreign nation only	352
if the debt interest is backed by the full faith and credit of	353
that foreign nation, there is no prior history of default, and the	354
debt interest matures not later than five years after purchase.	355
For purposes of division (A)(11) of this section, a debt interest	356
is rated in the three highest categories by two nationally	357
recognized standard rating services if either the debt interest	358
itself or the issuer of the debt interest is rated, or is	359
implicitly rated, at the time of purchase in the three highest	360
categories by two nationally recognized standard rating services.	361

(12) A current unpaid or delinquent tax line of credit	362
authorized under division (G) of section 135.341 of the Revised	363
Code, provided that all of the conditions for entering into such a	364
line of credit under that division are satisfied, or bonds and	365
other obligations of a county land reutilization corporation	366
organized under Chapter 1724. of the Revised Code, if the county	367
land reutilization corporation is located wholly or partly within	368
the same county as the investing authority.	369

(B) Nothing in the classifications of eligible obligations	370
and securities set forth in divisions (A)(1) to (11) of this	371
section shall be construed to authorize investment in a	372
derivative, and no investing authority shall invest any county	373
inactive moneys or any moneys in a county public library fund in a	374
derivative. For purposes of this division, "derivative" means a	375
financial instrument or contract or obligation whose value or	376
return is based upon or linked to another asset or index, or both,	377
separate from the financial instrument, contract, or obligation	378
itself. Any security, obligation, trust account, or other	379
instrument that is created from an issue of the United States	380
treasury or is created from an obligation of a federal agency or	381
instrumentality or is created from both is considered a derivative	382
instrument. An eligible investment described in this section with	383
a variable interest rate payment, based upon a single interest	384
payment or single index comprised of other eligible investments	385
provided for in division (A)(1) or (2) of this section, is not a	386
derivative, provided that such variable rate investment has a	387
maximum maturity of two years. A treasury inflation-protected	388
security shall not be considered a derivative, provided the	389
security matures not later than five years after purchase.	390

(C) Except as provided in division (D) of this section, any	391
investment made pursuant to this section must mature within five	392
years from the date of settlement, unless the investment is	393
matched to a specific obligation or debt of the county or to a	394
specific obligation or debt of a political subdivision of this	395
state, and the investment is specifically approved by the	396
investment advisory committee.	397

(D) The investing authority may also enter into a written	398
repurchase agreement with any eligible institution mentioned in	399
section 135.32 of the Revised Code or any eligible securities	400
dealer pursuant to division (J) of this section, under the terms	401
of which agreement the investing authority purchases and the	402
eligible institution or dealer agrees unconditionally to	403
repurchase any of the securities listed in divisions (B)(1) to	404
(5), except letters of credit described in division (B)(2), of	405
section 135.18 of the Revised Code. The market value of securities	406
subject to an overnight written repurchase agreement must exceed	407
the principal value of the overnight written repurchase agreement	408
by at least two per cent. A written repurchase agreement must	409
exceed the principal value of the overnight written repurchase	410
agreement, by at least two per cent. A written repurchase	411
agreement shall not exceed thirty days, and the market value of	412
securities subject to a written repurchase agreement must exceed	413
the principal value of the written repurchase agreement by at	414
least two per cent and be marked to market daily. All securities	415
purchased pursuant to this division shall be delivered into the	416
custody of the investing authority or the qualified custodian of	417
the investing authority or an agent designated by the investing	418
authority. A written repurchase agreement with an eligible	419
securities dealer shall be transacted on a delivery versus payment	420
basis. The agreement shall contain the requirement that for each	421
transaction pursuant to the agreement the participating	422
institution shall provide all of the following information:	423

(1) The par value of the securities;

424

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

425

(3) A numerical identifier generally accepted in the	426
securities industry that designates the securities.	427

No investing authority shall enter into a written repurchase	428
agreement under the terms of which the investing authority agrees	429
to sell securities owned by the county to a purchaser and agrees	430
with that purchaser to unconditionally repurchase those	431
securities.	432

(E) No investing authority shall make an investment under	433
this section, unless the investing authority, at the time of	434
making the investment, reasonably expects that the investment can	435
be held until its maturity. The investing authority's written	436
investment policy shall specify the conditions under which an	437
investment may be redeemed or sold prior to maturity.	438

(F) No investing authority shall pay a county's inactive	439
moneys or moneys of a county public library fund into a fund	440
established by another subdivision, treasurer, governing board, or	441
investing authority, if that fund was established by the	442
subdivision, treasurer, governing board, or investing authority	443
for the purpose of investing or depositing the public moneys of	444
other subdivisions. This division does not apply to the payment of	445
public moneys into either of the following:	446

(1) The Ohio subdivision's fund pursuant to division (A)(6)	447
of this section;	448

(2) A fund created solely for the purpose of acquiring,	449
constructing, owning, leasing, or operating municipal utilities	450
pursuant to the authority provided under section 715.02 of the	451
Revised Code or Section 4 of Article XVIII, Ohio Constitution.	452

For purposes of division (F) of this section, "subdivision"	453
includes a county.	454

(G) The use of leverage, in which the county uses its current	455
investment assets as collateral for the purpose of purchasing	456
other assets, is prohibited. The issuance of taxable notes for the	457
purpose of arbitrage is prohibited. Contracting to sell securities	458
not owned by the county, for the purpose of purchasing such	459
securities on the speculation that bond prices will decline, is	460
prohibited.	461

(H) Any securities, certificates of deposit, deposit	462
accounts, or any other documents evidencing deposits or	463
investments made under authority of this section shall be issued	464
in the name of the county with the county treasurer or investing	465
authority as the designated payee. If any such deposits or	466
investments are registrable either as to principal or interest, or	467
both, they shall be registered in the name of the treasurer.	468

(I) The investing authority shall be responsible for the	469
safekeeping of all documents evidencing a deposit or investment	470
acquired under this section, including, but not limited to,	471
safekeeping receipts evidencing securities deposited with a	472
qualified trustee, as provided in section 135.37 of the Revised	473
Code, and documents confirming the purchase of securities under	474
any repurchase agreement under this section shall be deposited	475
with a qualified trustee, provided, however, that the qualified	476
trustee shall be required to report to the investing authority,	477
auditor of state, or an authorized outside auditor at any time	478
upon request as to the identity, market value, and location of the	479
document evidencing each security, and that if the participating	480
institution is a designated depository of the county for the	481
current period of designation, the securities that are the subject	482
of the repurchase agreement may be delivered to the treasurer or	483
held in trust by the participating institution on behalf of the	484
investing authority.	485

Upon the expiration of the term of office of an investing	486
authority or in the event of a vacancy in the office for any	487
reason, the officer or the officer's legal representative shall	488
transfer and deliver to the officer's successor all documents	489
mentioned in this division for which the officer has been	490
responsible for safekeeping. For all such documents transferred	491
and delivered, the officer shall be credited with, and the	492
officer's successor shall be charged with, the amount of moneys	493
evidenced by such documents.	494

(J)(1) All investments, except for investments in securities	495
described in divisions (A)(5), (6), and (12) of this section,	496
shall be made only through a member of the national association of	497
securities dealers, through a bank, savings bank, or savings and	498
loan association regulated by the superintendent of financial	499
institutions, or through an institution regulated by the	500
comptroller of the currency, federal deposit insurance	501
corporation, or board of governors of the federal reserve system.	502

(2) Payment for investments shall be made only upon the	503
delivery of securities representing such investments to the	504
treasurer, investing authority, or qualified trustee. If the	505
securities transferred are not represented by a certificate,	506
payment shall be made only upon receipt of confirmation of	507
transfer from the custodian by the treasurer, governing board, or	508
qualified trustee.	509

(K)(1) Except as otherwise provided in division (K)(2) of	510
this section, no investing authority shall make an investment or	511
deposit under this section, unless there is on file with the	512
auditor of state a written investment policy approved by the	513
investing authority. The policy shall require that all entities	514
conducting investment business with the investing authority shall	515
sign the investment policy of that investing authority. All	516
brokers, dealers, and financial institutions, described in	517
division (J)(1) of this section, initiating transactions with the	518
investing authority by giving advice or making investment	519
recommendations shall sign the investing authority's investment	520
policy thereby acknowledging their agreement to abide by the	521
policy's contents. All brokers, dealers, and financial	522
institutions, described in division (J)(1) of this section,	523
executing transactions initiated by the investing authority,	524
having read the policy's contents, shall sign the investment	525
policy thereby acknowledging their comprehension and receipt.	526

(2) If a written investment policy described in division	527
(K)(1) of this section is not filed on behalf of the county with	528
the auditor of state, the investing authority of that county shall	529
invest the county's inactive moneys and moneys of the county	530
public library fund only in time certificates of deposits or	531
savings or deposit accounts pursuant to division (A)(3) of this	532
section, no-load money market mutual funds pursuant to division	533
(A)(5) of this section, or the Ohio subdivision's fund pursuant to	534
division (A)(6) of this section.	535

(L)(1) The investing authority shall establish and maintain	536
an inventory of all obligations and securities acquired by the	537
investing authority pursuant to this section. The inventory shall	538
include a description of each obligation or security, including	539
type, cost, par value, maturity date, settlement date, and any	540
coupon rate.	541

(2) The investing authority shall also keep a complete record	542
of all purchases and sales of the obligations and securities made	543
pursuant to this section.	544

(3) The investing authority shall maintain a monthly	545
portfolio report and issue a copy of the monthly portfolio report	546
describing such investments to the county investment advisory	547
committee, detailing the current inventory of all obligations and	548
securities, all transactions during the month that affected the	549
inventory, any income received from the obligations and	550
securities, and any investment expenses paid, and stating the	551
names of any persons effecting transactions on behalf of the	552
investing authority.	553

(4) The monthly portfolio report shall be a public record and	554
available for inspection under section 149.43 of the Revised Code.	555

(5) The inventory and the monthly portfolio report shall be	556
filed with the board of county commissioners. The monthly	557
portfolio report also shall be filed with the treasurer of state.	558

(M) An investing authority may enter into a written	559
investment or deposit agreement that includes a provision under	560
which the parties agree to submit to nonbinding arbitration to	561
settle any controversy that may arise out of the agreement,	562
including any controversy pertaining to losses of public moneys	563
resulting from investment or deposit. The arbitration provision	564
shall be set forth entirely in the agreement, and the agreement	565
shall include a conspicuous notice to the parties that any party	566
to the arbitration may apply to the court of common pleas of the	567
county in which the arbitration was held for an order to vacate,	568
modify, or correct the award. Any such party may also apply to the	569
court for an order to change venue to a court of common pleas	570
located more than one hundred miles from the county in which the	571
investing authority is located.	572

For purposes of this division, "investment or deposit	573
agreement" means any agreement between an investing authority and	574
a person, under which agreement the person agrees to invest,	575
deposit, or otherwise manage, on behalf of the investing	576
authority, a county's inactive moneys or moneys in a county public	577
library fund, or agrees to provide investment advice to the	578
investing authority.	579

(N)(1) An investment held in the county portfolio on	580
September 27, 1996, that was a legal investment under the law as	581
it existed before September 27, 1996, may be held until maturity,	582
or if the investment does not have a maturity date the investment	583
may be held until five years from September 27, 1996, regardless	584
of whether the investment would qualify as a legal investment	585
under the terms of this section as amended.	586

(2) An investment held in the county portfolio on the	587
effective date of this amendmentSeptember 10, 2012, that was a	588
legal investment under the law as it existed before the effective	589
date of this amendmentSeptember 10, 2012, may be held until	590
maturity.	591

(O) The investing authority may invest inactive moneys in	592
precious metals as provided in section 135.146 of the Revised	593
Code.	594

Sec. 135.351.  (A) Except as provided in sections 135.352 and	595
1545.22 of the Revised Code, all interest earnedor other	596
investment earnings on money included within the county treasury	597
shall be credited to the general fund of the county.	598

(B) Unless otherwise provided by law, with respect to moneys	599
belonging to another political subdivision, taxing district, or	600
special district that are deposited or invested by the county, the	601
county shall pay and distribute such moneys in accordance with	602
division (B)(1), (2), or (3) of this section, as appropriate:	603

(1) On or before the tenth day of the month following the	604
month in which the county received such moneys or on or before	605
such later date authorized by the legislative authority or other	606
governing body of the other political subdivision or district, pay	607
and distribute all such moneys to the treasurer or other	608
appropriate officer of the other political subdivision or	609
district.	610

(2) With respect to moneys due to boards and subdivisions	611
under section 321.31 of the Revised Code, pay and distribute such	612
moneys within five business days after the final date prescribed	613
by law for such settlement, or if the settlement date is lawfully	614
extended, within five business days after the date of such lawful	615
extension.	616

(3) With respect to moneys for which any advance authorized	617
by section 321.34 or 321.342 of the Revised Code has been	618
requested, pay and distribute such moneys within five business	619
days after the request for the advance is delivered to the county	620
auditor.	621

(C) If the county fails to make any payment and distribution	622
required by division (B) of this section within the time periods	623
prescribed by that division, the county shall pay to the	624
appropriate other political subdivision, taxing district, or	625
special district any interest that the county has received or will	626
receive on any moneys or advance described in that division which	627
accrues after the date such moneys or advance should have been	628
distributed, together with the principal amount of such moneys or	629
advance. The county shall make this payment of principal and	630
interest within five business days after the treasurer or other	631
appropriate officer of such other political subdivision or	632
district files a written demand for payment with the county	633
auditor.	634

Sec. 135.353.  (A) In addition to the investments specified	635
in sectionsections 135.146 and 135.35 of the Revised Code, the	636
investing authority of a county may do all of the following:	637

(1) Invest inactive or public moneys in linked deposits as	638
authorized by resolution adopted pursuant to section 135.80 or	639
135.801 of the Revised Code;	640

(2) Invest inactive or public moneys in linked deposits as	641
authorized by resolution adopted pursuant to section 135.805 of	642
the Revised Code for a term considered appropriate by the	643
investing authority, but not exceeding fifteen years, which	644
investment may be renewed for up to two additional terms with each	645
additional term not exceeding fifteen years.	646

(3) Invest inactive moneys in certificates of deposit in	647
accordance with all of the following:	648

(a) The inactive moneys initially are deposited with an	649
eligible public depository described in section 135.32 of the	650
Revised Code and selected by the investing authority.	651

(b) For the investing authority depositing the inactive	652
moneys pursuant to division (A)(3)(a) of this section, the	653
eligible public depository selected pursuant to that division	654
invests the inactive moneys in certificates of deposit of one or	655
more federally insured banks, savings banks, or savings and loan	656
associations, wherever located. The full amount of principal and	657
any accrued interest of each certificate of deposit invested in	658
pursuant to division (A)(3)(b) of this section shall be insured by	659
federal deposit insurance.	660

(c) For the investing authority depositing the inactive	661
moneys pursuant to division (A)(3)(a) of this section, the	662
eligible public depository selected pursuant to that division acts	663
as custodian of the certificates of deposit described in division	664
(A)(3)(b) of this section.	665

(d) On the same date the public moneys are redeposited by the	666
public depository, the public depository may, in its sole	667
discretion, choose whether to receive deposits, in any amount,	668
from other banks, savings banks, or savings and loan associations.	669

(e) The public depository provides to the investing authority	670
a monthly account statement that includes the amount of its funds	671
deposited and held at each bank, savings bank, or savings and loan	672
association for which the public depository acts as a custodian	673
pursuant to this section.	674

(B) Inactive moneys deposited or invested in accordance with	675
division (A)(3) of this section are not subject to any pledging	676
requirements described in section 135.181 or 135.37 of the Revised	677
Code.	678

Sec. 135.40.  A county treasurer may keep at all times in the	679
vaults of histhe county treasurer's office such amount of public	680
moneys, as a cash reserve, as hethe county treasurer deems to be	681
necessary to transact the business of histhat office, which	682
amount shall not be required to be deposited in public	683
depositories. AllExcept as otherwise provided in division (C) of	684
section 135.146 of the Revised Code, all the remaining public	685
moneys in histhe county treasurer's possession shall be deposited	686
in public depositories in accordance with sections 135.31 to	687
135.40 of the Revised Code.	688

Sec. 135.45.  (A) Subject to division (B) of this section, a	689
treasurer, governing board, or investing authority of a	690
subdivision may pay public moneys of the subdivision into the Ohio	691
subdivision's fund, which may be established in the custody of the	692
treasurer of state. The treasurer of state shall invest the fund	693
as the state treasurer's investment pool, in the same manner, in	694
the same types of instruments, and subject to the same limitations	695
provided for the deposit and investment of interim moneys of the	696
state, except that the fund shall not be invested in the linked	697
deposits authorized under sections 135.61 to 135.67 of the Revised	698
Code.	699

(B)(1) On and after July 1, 1997, a treasurer, governing	700
board, or investing authority of a subdivision shall not invest	701
public moneys of the subdivision in the Ohio subdivision's fund	702
under division (B)(6) of section 135.14 of the Revised Code or	703
division (A)(6) of section 135.35 of the Revised Code if the fund	704
does not maintain the highest letter or numerical rating provided	705
by at least one nationally recognized standard rating service.	706

(2) Upon receipt of notice that the fund does not maintain	707
the highest letter or numerical rating required under division	708
(B)(1) of this section, the treasurer of state shall have ninety	709
days to obtain the required highest letter or numerical rating. If	710
the treasurer of state fails to obtain the required highest letter	711
or numerical rating, the treasurer of state shall have an	712
additional one hundred eighty days to develop a plan to dissolve	713
the fund. The plan shall include reasonable standards for the	714
equitable return of public moneys in the fund to those	715
subdivisions participating in the fund.	716

(3) Treasurers, governing boards, or investing authorities of	717
subdivisions participating in the fund shall not be required to	718
divest in the fund during the initial one hundred eighty days	719
following the treasurer of state's receipt of notice under	720
division (B)(2) of this section.	721

(C) The treasurer of state shall adopt such rules as are	722
necessary for the efficient administration of and accounting for	723
the state treasurer's investment pool, including specification of	724
minimum amounts which may be paid into the pool and minimum	725
periods of time for which such payments shall be retained in the	726
pool. The rules shall provide for the administrative expenses of	727
the pool to be paid from its earnings and for the interest	728
earnings in excess of such expenses to be credited to the several	729
treasurers, governing boards, and investing authorities	730
participating in the pool in a manner which equitably reflects the	731
differing amounts of their respective investments in the pool and	732
the differing periods of time for which such amounts are in the	733
pool.	734

(D) Upon creating the pool, the treasurer of state shall give	735
bond with sufficient sureties, payable to the treasurers,	736
governing boards, and investing authorities of subdivisions	737
participating in the pool, for the benefit of the subdivisions	738
whose moneys are paid into the pool for investment, in the total	739
penal sum of two hundred fifty thousand dollars, conditioned for	740
the faithful discharge of histhe treasurer of state's duties in	741
relation to the pool.	742

(E) The treasurer of state and his bondsmenthe treasurer of	743
state's bonders or surety are liable for the loss of any interim	744
moneys of the state invested under this section through the state	745
treasurer's investment pool to the same extent the treasurer of	746
state and his bondsmenthe treasurer of state's bonders or surety	747
are liable for the loss of public moneys under section 135.19 of	748
the Revised Code.	749

(F) As used in this section:

750

(1) "Interim moneys" and "governing board" have the same	751
meanings as in section 135.01 of the Revised Code.	752

(2)(a) "Subdivision" has the same meaning as in section	753
135.01 of the Revised Code, but also includes a county, or a	754
municipal corporation that has adopted a charter under Article	755
XVIII, Ohio Constitution.	756

(b) "Public moneys of a subdivision" has the same meaning as	757
in section 135.01 of the Revised Code, but also includes "public	758
moneys" as defined in section 135.31 of the Revised Code, and	759
funds held in the custody of the treasurer of state	760
notwithstanding any limitations on the permissible investments of	761
such funds.	762

(3) "Treasurer" has the same meaning as in sections 135.01	763
and 135.31 of the Revised Code.	764

(4) "Investing authority" has the same meaning as in section	765
135.31 of the Revised Code.	766

Section 2. That existing sections 135.143, 135.35, 135.351,	767
135.353, 135.40, and 135.45 of the Revised Code are hereby	768
repealed.	769