Chapter 135 | Uniform Depository Act

Section 135.01 | Uniform depository act definitions.

• Effective: October 3, 2023
• Latest Legislation: House Bill 33 - 135th General Assembly

Except as otherwise provided in sections 135.14, 135.143, 135.181, and 135.182 of the Revised Code, as used in sections 135.01 to 135.21 of the Revised Code:

(A) "Active deposit" means a public deposit necessary to meet current demands on the treasury, and that is deposited in any of the following:

(1) A commercial account that is payable or withdrawable, in whole or in part, on demand;

(2) A negotiable order of withdrawal account as authorized in the "Consumer Checking Account Equity Act of 1980," 94 Stat. 146, 12 U.S.C.A. 1832(a);

(3) A money market deposit account as authorized in the "Garn-St. Germain Depository Institutions Act of 1982," 96 Stat. 1501, 12 U.S.C. 3503.

(B) "Auditor" includes the auditor of state and the auditor, or officer exercising the functions of an auditor, of any subdivision.

(C) "Capital funds" means the sum of the following: the par value of the outstanding common capital stock, the par value of the outstanding preferred capital stock, the aggregate par value of all outstanding capital notes and debentures, and the surplus. In the case of an institution having offices in more than one county, the capital funds of such institution, for the purposes of sections 135.01 to 135.21 of the Revised Code, relative to the deposit of the public moneys of the subdivisions in one such county, shall be considered to be that proportion of the capital funds of the institution that is represented by the ratio that the deposit liabilities of such institution originating at the office located in the county bears to the total deposit liabilities of the institution.

(D) "Governing board" means, in the case of the state, the state board of deposit; in the case of all school districts and educational service centers except as otherwise provided in this section, the board of education or governing board of a service center, and when the case so requires, the board of commissioners of the sinking fund; in the case of a municipal corporation, the legislative authority, and when the case so requires, the board of trustees of the sinking fund; in the case of a township, the board of township trustees; in the case of a union or joint institution or enterprise of two or more subdivisions not having a treasurer, the board of directors or trustees thereof; and in the case of any other subdivision electing or appointing a treasurer, the directors, trustees, or other similar officers of such subdivision. The governing board of a subdivision electing or appointing a treasurer shall be the governing board of all other subdivisions for which such treasurer is authorized by law to act. In the case of a county school financing district that levies a tax pursuant to section 5705.215 of the Revised Code, the county board of education that serves as its taxing authority shall operate as a governing board. Any other county board of education shall operate as a governing board unless it adopts a resolution designating the board of county commissioners as the governing board for the county school district.

(E) "Inactive deposit" means a public deposit other than an interim deposit or an active deposit.

(F) "Interim deposit" means a deposit of interim moneys. "Interim moneys" means public moneys in the treasury of any subdivision after the award of inactive deposits has been made in accordance with section 135.07 of the Revised Code, which moneys are in excess of the aggregate amount of the inactive deposits as estimated by the governing board prior to the period of designation and which the governing board finds should not be deposited as active or inactive deposits for the reason that such moneys will not be needed for immediate use but will be needed before the end of the period of designation. In the case of the state treasury, "interim moneys" means public moneys that are not active deposits and may be invested in accordance with section 135.143 of the Revised Code.

(G) "Permissible rate of interest" means a rate of interest that all eligible institutions mentioned in section 135.03 of the Revised Code are permitted to pay by law or valid regulations.

(H) "Warrant clearance account" means an account established by the treasurer of state for either of the following purposes:

(a) The deposit of active state moneys for the purposes of clearing state paper warrants through the banking system, funding electronic benefit transfer cards, issuing stored value cards, or otherwise facilitating the settlement of state obligations;

(b) The deposit of custodial moneys from an account held in the custody of the treasurer of state to facilitate settlement of obligations of the custodial fund.

(I) "Public deposit" means public moneys deposited in a public depository pursuant to sections 135.01 to 135.21 of the Revised Code.

(J) "Public depository" means an institution which receives or holds any public deposits.

(K) "Public moneys" means all moneys in the treasury of the state or any subdivision of the state, or moneys coming lawfully into the possession or custody of the treasurer of state or of the treasurer of any subdivision. "Public moneys of the state" includes all such moneys coming lawfully into the possession of the treasurer of state; and "public moneys of a subdivision" includes all such moneys coming lawfully into the possession of the treasurer of the subdivision.

(L) "Subdivision" means any municipal corporation, except one which has adopted a charter under Article XVIII, Ohio Constitution, and the charter or ordinances of the chartered municipal corporation set forth special provisions respecting the deposit or investment of its public moneys, or any school district or educational service center, a county school financing district, township, municipal or school district sinking fund, special taxing or assessment district, or other district or local authority electing or appointing a treasurer, except a county. In the case of a school district or educational service center, special taxing or assessment district, or other local authority for which a treasurer, elected or appointed primarily as the treasurer of a subdivision, is authorized or required by law to act as ex officio treasurer, the subdivision for which such a treasurer has been primarily elected or appointed shall be considered to be the "subdivision." The term also includes a union or joint institution or enterprise of two or more subdivisions, that is not authorized to elect or appoint a treasurer, and for which no ex officio treasurer is provided by law.

(M) "Treasurer" means, in the case of the state, the treasurer of state and in the case of any subdivision, the treasurer, or officer exercising the functions of a treasurer, of such subdivision. In the case of a board of trustees of the sinking fund of a municipal corporation, the board of commissioners of the sinking fund of a school district, or a board of directors or trustees of any union or joint institution or enterprise of two or more subdivisions not having a treasurer, such term means such board of trustees of the sinking fund, board of commissioners of the sinking fund, or board of directors or trustees.

(N) "Treasury investment board" of a municipal corporation means the mayor or other chief executive officer, the village solicitor or city director of law, and the auditor or other chief fiscal officer.

(O) "No-load money market mutual fund" means a no-load money market mutual fund to which all of the following apply:

(1) The fund is registered as an investment company under the "Investment Company Act of 1940," 54 Stat. 789, 15 U.S.C.A. 80a-1 to 80a-64;

(2) The fund has the highest letter or numerical rating provided by at least one nationally recognized statistical rating organization;

(3) The fund does not include any investment in a derivative. As used in division (O)(3) of this section, "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 section 135.14 or 135.35 of the Revised Code with a variable interest rate payment, based upon a single interest payment or single index comprised of other investments provided for in division (B)(1) or (2) of section 135.14 of the Revised Code, is not a derivative, provided that such variable rate investment has a maximum maturity of two years.

(P) "Public depositor" means the state or a subdivision, as applicable, that deposits public moneys in a public depository pursuant to sections 135.01 to 135.21 of the Revised Code.

(Q) "Uninsured public deposit" means the portion of a public deposit that is not insured by the federal deposit insurance corporation or by any other agency or instrumentality of the federal government.

Last updated February 8, 2024 at 12:25 PM

Section 135.02 | State board of deposit.

• Effective: October 3, 2023
• Latest Legislation: House Bill 33 - 135th General Assembly

There shall be a state board of deposit consisting of the treasurer of state or an employee of the treasurer of state's department designated by the treasurer of state, the auditor of state or an employee of the auditor of state's department designated by the auditor of state, and the attorney general or an employee of the attorney general's department designated by the attorney general. The board shall meet on the call of the chairperson at least annually to perform the duties prescribed in sections 135.01 to 135.21 of the Revised Code. At any time, two members of the board may request that the chairperson call a meeting of the board, and the chairperson shall call the meeting within thirty days after receiving such requests. The treasurer of state or the treasurer of state's designated representative shall be chairperson of the board. The treasurer of state shall designate an employee of the treasurer of state's department to serve as the secretary of the board and keep its records. A certified copy of such records shall be prima-facie evidence of the matter appearing therein in any court of record.

The chairperson shall provide notification to the board of deposit that the reports required under division (B) of section 135.143 of the Revised Code have been posted to a web site maintained by the treasurer of state.

The necessary expenses of the board shall be paid from the state treasury from appropriations for that purpose upon the order of the board certified by the chairperson and the secretary.

Last updated August 30, 2023 at 9:39 AM

Section 135.03 | Institutions eligible as public depositories.

• Effective: January 1, 2018
• Latest Legislation: House Bill 49 - 132nd General Assembly

Any national bank, any bank doing business under authority granted by the superintendent of financial institutions, or any bank doing business under authority granted by the regulatory authority of another state of the United States, located in this state, is eligible to become a public depository, subject to sections 135.01 to 135.21 of the Revised Code. No bank shall receive or have on deposit at any one time public moneys, including public moneys as defined in section 135.31 of the Revised Code, in an aggregate amount in excess of thirty per cent of its total assets, as shown in its latest report to the comptroller of the currency, the superintendent of financial institutions, the federal deposit insurance corporation, or the board of governors of the federal reserve system.

Any federal savings association or any savings and loan association or savings bank doing business under authority granted by the regulatory authority of another state of the United States, located in this state, and authorized to accept deposits is eligible to become a public depository, subject to sections 135.01 to 135.21 of the Revised Code. No savings association, savings and loan association, or savings bank shall receive or have on deposit at any one time public moneys, including public moneys as defined in section 135.31 of the Revised Code, in an aggregate amount in excess of thirty per cent of its total assets, as shown in its latest report to the former office of thrift supervision, the comptroller of the currency, the superintendent of financial institutions, the federal deposit insurance corporation, or the board of governors of the federal reserve system.

Section 135.032 | Active prompt correction directive.

• Effective: October 24, 2024
• Latest Legislation: Senate Bill 94, House Bill 301 - 135th General Assembly

(A) For the purposes of this section:

(1) "Institution" means an institution eligible to become a public depository under section 135.03 or 135.32 of the Revised Code or an eligible credit union, as defined in section 135.62 of the Revised Code.

(2) "Prompt corrective action directive" means a directive issued by a regulatory authority of the United States as authorized under 12 U.S.C. 1790d or 1831o.

(B) An institution designated as a public depository under this chapter shall notify each governing board that made such designation if the institution becomes party to an active prompt corrective action directive.

(C) Except as otherwise provided in division (D) of this section, an institution is ineligible to become a public depository under this chapter or to have active, interim, or inactive deposits awarded, placed, purchased, made, or designated pursuant to this chapter, if the institution is party to an active prompt corrective action directive.

(D) If a governing board receives notice under division (B) of this section, or otherwise becomes aware that an institution the board designated as a public depository is party to an active prompt corrective action directive, the board may do either or both of the following, if the board determines that it is in the public interest:

(1) Allow the public depository to continue to have active, interim, or inactive deposits awarded, placed, purchased, made, or designated for the remainder of the designation period;

(2) Designate the institution as a public depository for additional succeeding designation periods.

(E) If a governing board determines that one or both of the actions permitted by division (D) of this section are in the public interest, and public moneys are lost due to the failure of the public depository subject to the active prompt correction directive, all of the following are relieved from any liability for that loss:

(1) The governing board's treasurer and deputy treasurer;

(2) An executive director, director, or other person employed by the governing board, its treasurer, or its deputy treasurer;

(3) Bondspersons and surety of any person described in divisions (E)(1) and (2) of this section.

Last updated October 24, 2024 at 4:07 AM

Section 135.04 | Eligibility for state deposits - warrant clearance accounts.

• Effective: October 3, 2023
• Latest Legislation: House Bill 33 - 135th General Assembly

(A) Any institution mentioned in section 135.03 of the Revised Code is eligible to become a public depository of the active deposits and interim deposits of public moneys of the state subject to the requirements of sections 135.01 to 135.21 of the Revised Code.

(B) To facilitate the settlement of obligations of the state treasury and custodial funds in the custody of the treasurer of state, the state board of deposit may delegate the authority to the treasurer of state to establish warrant clearance accounts in any institution mentioned in section 135.03 of the Revised Code. The balances maintained in such warrant clearance accounts shall be at sufficient levels to cover the activity generated by such accounts on an individual basis. Any financial institution in the state that has a warrant clearance account established by the treasurer of state shall, not more than fifteen days after the close of each month, prepare and transmit to the treasurer of state an analysis statement of such account for the month then ended. Such statement shall contain such information as determined by the state board of deposit.

(C) Each governing board shall award the active deposits of public moneys subject to its control to the eligible institutions in accordance with this section, except that no such public depository shall thereby be required to take or permitted to receive and have at any one time a greater amount of active deposits of such public moneys than that specified in the application of such depository. When, by reason of such limitation or otherwise, the amount of active public moneys deposited or to be deposited in a public depository, pursuant to an award made under this section, is reduced or withdrawn, as the case requires, the amount of such reduction or the sum so withdrawn shall be deposited in another eligible institution applying therefor, or if there is no such eligible institution, then the amount so withheld or withdrawn shall be awarded or deposited for the remainder of the period of designation in accordance with sections 135.01 to 135.21 of the Revised Code.

(D) Any institution mentioned in section 135.03 of the Revised Code is eligible to become a public depository of the inactive and interim deposits of public moneys of a subdivision. In case the aggregate amount of inactive or interim deposits applied for by such eligible institutions is less than the aggregate maximum amount of such inactive or interim deposits as estimated to be deposited pursuant to sections 135.01 to 135.21 of the Revised Code, the governing board of the subdivision may designate as a public depository of the inactive or interim deposits of the public moneys thereof, one or more institutions of a kind mentioned in section 135.03 of the Revised Code, subject to the requirements of sections 135.01 to 135.21 of the Revised Code.

(E) Any institution mentioned in section 135.03 of the Revised Code is eligible to become a public depository of the active deposits of public moneys of a subdivision. In case the aggregate amount of active deposits of the public moneys of the subdivision applied for by such eligible institutions is less than the aggregate maximum amount to be deposited as such, as estimated by the governing board, said board may designate as a public depository of the active deposits of the public moneys of the subdivision, one or more institutions of the kind mentioned in section 135.03 of the Revised Code, subject to the requirements of sections 135.01 to 135.21 of the Revised Code.

(F)(1) The governing board of the state or of a subdivision may designate one or more minority banks as public depositories of its inactive, interim, or active deposits of public moneys designated as federal funds. Except for section 135.18, 135.181, or 135.182 of the Revised Code, Chapter 135. of the Revised Code does not apply to the application for, or the award of, such deposits. As used in this division, "minority bank" means a bank that is owned or controlled by one or more socially or economically disadvantaged persons. Such disadvantage may arise from cultural, ethnic, or racial background, chronic economic circumstances, or other similar cause. Such persons include, but are not limited to, Afro-Americans, Puerto Ricans, Spanish-speaking Americans, and American Indians.

(2) In enacting this division, the general assembly finds that:

(a) Certain commercial banks are owned or controlled by minority Americans;

(b) Minority banks are an important source of banking services in their communities;

(c) Minority banks have been unsuccessful in competing under Chapter 135. of the Revised Code for the award of federal funds;

(d) This division contains safeguards for the protection of the general public and the banking industry, since it provides the governing board of the state or political subdivision with permissive authority in the award of deposits; limits the authority of the governing board to the award of federal funds; and subjects minority banks to certain limitations of Chapter 135. of the Revised Code, including the requirement that, as in the case of every financial institution subject to Chapter 135. of the Revised Code, a minority bank pledge certain securities for repayment of the deposits.

(3) The purpose of this division is to recognize that the state has a substantial and compelling interest in encouraging the establishment, development, and stability of minority banks by facilitating their access to the award of federal funds, while ensuring the protection of the general public and the banking industry.

(G) The governing board of a subdivision shall award the first twenty-five thousand dollars of the active deposits of public moneys subject to its control to the eligible institution or institutions applying or qualifying therefor on the basis of the operating needs of the subdivision and shall award the active deposits of public moneys subject to its control in excess of twenty-five thousand dollars to the eligible institution or institutions applying or qualifying therefor.

Last updated August 30, 2023 at 9:42 AM

Section 135.05 | Estimate of inactive deposits.

• Effective: October 3, 2023
• Latest Legislation: House Bill 33 - 135th General Assembly

Each governing board of a subdivision shall, at least three weeks prior to the date when it is required by section 135.12 of the Revised Code to designate public depositories, by resolution, estimate the aggregate maximum amount of public moneys subject to its control to be awarded and be on deposit as inactive deposits. The governing board of each subdivision shall cause a copy of such resolution, together with a notice of the date on which the meeting of the board for the designation of such depositories will be held and the period for which such inactive deposits will be awarded, to be published once a week for two consecutive weeks in a newspaper of general circulation in the county or as provided in section 7.16 of the Revised Code. If a subdivision is located in more than one county, such publication shall be made in a newspaper of general circulation in the county in which the major part of such subdivision is located, and of general circulation in the subdivision. A written notice stating the aggregate maximum amount to be awarded as inactive deposits of the subdivision shall be given to each eligible depository by the governing board at the time the first publication is made in the newspaper.

All deposits of the public moneys of any subdivision made during the period covered by the designation in excess of the aggregate amount so estimated shall be active deposits or interim deposits. Inactive, interim, and active deposits shall be separately awarded, made, and administered as provided by sections 135.01 to 135.21 of the Revised Code.

Last updated August 30, 2023 at 9:45 AM

Section 135.06 | Application for inactive deposits.

• Effective: October 3, 2023
• Latest Legislation: House Bill 33 - 135th General Assembly

Each eligible institution desiring to be a public depository of the inactive deposits of the public moneys of the subdivision shall, not more than thirty days prior to the date fixed by section 135.12 of the Revised Code for the designation of such public depositories, make application therefor in writing to the proper governing board. Such application shall specify the maximum amount of such public moneys which the applicant desires to receive and have on deposit as an inactive deposit at any one time during the period covered by the designation, provided that it shall not apply for more than thirty per cent of its total assets as revealed by its latest report to the superintendent of financial institutions, the comptroller of the currency, the federal deposit insurance corporation, or the board of governors of the federal reserve system, and the rate of interest which the applicant will pay thereon, subject to the limitations of sections 135.01 to 135.21 of the Revised Code. Each application shall be accompanied by a financial statement of the applicant, under oath of its cashier, treasurer, or other officer, in such detail as to show the capital funds of the applicant, as of the date of its latest report to the superintendent of financial institutions, the comptroller of the currency, the federal deposit insurance corporation, or the board of governors of the federal reserve system, and adjusted to show any changes therein made prior to the date of the application. Such application may be combined with an application for designation as a public depository of active deposits, interim deposits, or both.

Last updated August 30, 2023 at 9:49 AM

Section 135.07 | Award of inactive deposits.

• Effective: March 5, 1987
• Latest Legislation: House Bill 144 - 116th General Assembly

Each governing board, in proceeding to award the inactive deposits of public moneys subject to its control to public depositories, shall estimate the probable amount of public moneys to be so deposited in and among the eligible public depositories applying therefor at the beginning of the period. Such board shall award the inactive deposits of public moneys subject to its control to the eligible institution or institutions offering to pay the highest rate of interest permissible at the commencement of the period of designation on like time certificates of deposit or savings or deposit accounts, in the amount, as to each, specified in the application of the institution therefor. If two or more eligible institutions offer to pay the same permissible highest rate of interest on like time certificates of deposit or savings or deposit accounts on amounts so specified, which in the aggregate exceed the estimated amount to be deposited at the beginning of the period, or the maximum amount thereof subject to deposit at any time during such period, the inactive deposits shall be divided and awarded among such eligible public depositories in proportion to their respective capital funds. If the aggregate amount of inactive public deposits as specified in the applications made therefor by the institution offering to pay the highest such permissible rate of interest thereon is less than the amount of public moneys to be initially so deposited, or the maximum amount required to be deposited during the period, as so estimated, the board shall award the remainder of such inactive deposits to the eligible institution offering to pay the next such highest permissible rate of interest thereon in the amount specified in its application. If the amounts so specified in the applications of two or more institutions offering to pay the same next highest permissible rate of interest on like time certificates of deposit or savings or deposit accounts are in the aggregate in excess of such remaining estimated or probable amount to be so deposited, then such remainder shall be divided among and awarded to each of such institutions in proportion to their respective capital funds. In case the aggregate amount of inactive public deposits as specified in the applications made therefor is less than the public moneys thereof to be initially deposited or the maximum amount required to be deposited during the period, as estimated by the board, such governing board may invite applications for the excess amount from eligible institutions and may designate and award such excess amount to such eligible institutions offering the highest permissible rate of interest on like time certificates of deposit or savings or deposit accounts.

This section does not require or permit any public depository to receive and have at any one time a greater amount of public moneys than that specified in the application of such depository. When, by reason of such limitation or otherwise, the amount of inactive public moneys deposited or to be deposited in a public depository, pursuant to an award made under this section, is reduced or withdrawn, as the case requires, the amount of such reduction, or the sum so withdrawn, shall be deposited in another eligible institution offering to pay a rate of interest on like time certificates of deposit or savings or deposit accounts as high as that offered by the institution from which such amount has been withheld or withdrawn, to the extent such other institution has applied therefor and is eligible to receive the same; and thereafter, or if there is no such eligible institution, the amount so withheld or withdrawn shall be deposited or invested as determined by the governing board in accordance with sections 135.01 to 135.21 of the Revised Code.

Section 135.08 | Application for interim deposits.

• Effective: October 3, 2023
• Latest Legislation: House Bill 33 - 135th General Assembly

Each eligible institution desiring to be a public depository of interim deposits of the public moneys of the state or of the subdivision shall, not more than one hundred twenty days prior to the date fixed by section 135.12 of the Revised Code for the designation of public depositories, make application therefor in writing to the proper governing board. Such application shall specify the maximum amount of such public moneys which the applicant desires to receive and have on deposit as interim deposits at any one time during the period covered by the designation, provided that it shall not apply for more than thirty per cent of its total assets as revealed by its latest report to the superintendent of financial institutions, the comptroller of the currency, the federal deposit insurance corporation, or the board of governors of the federal reserve system, and the rate of interest which the applicant will pay thereon, subject to the limitations of sections 135.01 to 135.21 of the Revised Code.

Each application shall be accompanied by a financial statement of the applicant, under oath of its cashier, treasurer, or other officer, in such detail as to show the capital funds of the applicant, as of the date of its latest report to the superintendent of financial institutions, the comptroller of the currency, the federal deposit insurance corporation, or the board of governors of the federal reserve system, and adjusted to show any changes therein made prior to the date of the application. Such application may be combined with an application for designation as a public depository of inactive deposits, active deposits, or both.

Last updated August 30, 2023 at 9:52 AM

Section 135.09 | Award of interim deposits.

• Effective: March 5, 1987
• Latest Legislation: House Bill 144 - 116th General Assembly

Interim deposits may be awarded by the treasurer or governing board as interim moneys become available.

The treasurer or the governing board shall award the interim deposits of public moneys subject to its control to the eligible institution or institutions which offer to pay the highest permissible rate of interest on interim deposits in like time certificates of deposit or savings or deposit accounts.

Whenever, during the period of designation, the treasurer or governing board considers the terms of the applications for interim deposits in force no longer reflect prevailing interest rates in the market, the board, by resolution, may determine this fact and request new bids for interim deposits from eligible institutions. Each application shall be in writing and made prior to the date set by the governing board, specifying the maximum amount of public moneys the applicant desires to receive and have on deposit as interim deposits at any one time during the remaining period of designation and the rate of interest the applicant will pay thereon, subject to the limitations of sections 135.01 to 135.21 of the Revised Code.

Section 135.10 | Application for active deposits.

• Effective: October 3, 2023
• Latest Legislation: House Bill 33 - 135th General Assembly

Each eligible institution desiring to be a public depository of the active deposits of the public moneys of the state or of a subdivision shall, not more than one hundred twenty days prior to the date fixed by section 135.12 of the Revised Code for the designation of such public depositories, make application therefor in writing to the proper governing board. If desired, such application may specify the maximum amount of such public moneys which the applicant desires to receive and have on deposit at any one 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, in such detail as to show the capital funds of the applicant, as of the date of its latest report to the superintendent of financial institutions or comptroller of the currency, and adjusted to show any changes therein prior to the date of the application. Such application may be combined with an application for designation as a public depository of inactive deposits, interim deposits, or both.

Last updated August 30, 2023 at 10:02 AM

Section 135.11 | Exemption from prohibition against interest in contract.

• Effective: June 11, 1968
• Latest Legislation: Senate Bill 321 - 107th General Assembly

An officer, director, stockholder, employee, or owner of any interest in a public depository receiving inactive, interim, or active deposits pursuant to sections 135.01 to 135.21, inclusive, of the Revised Code shall not be deemed to be interested, either directly or indirectly, as a result of such relationship, in the deposit of such inactive, interim, or active deposits of public moneys for the purpose of any law of this state prohibiting an officer of the state or of any subdivision from being interested in any contract of the state or of the subdivision.

Section 135.12 | Designating depositories biennially.

• Effective: October 3, 2023
• Latest Legislation: House Bill 33 - 135th General Assembly

(A) Beginning in 2025 and every four years thereafter, the state board of deposit shall meet on the third Monday of March 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 four years commencing on the first Monday of July next following.

(B) Each 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. 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 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 state or of the subdivision for the remainder of the designation period.

(D) If a governing board determines during a designation period that it is necessary and in the state's or 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 state or 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 the change of law or regulation requires, the designation period shall be limited so as not to extend beyond the date when 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.

(F) During a designation period, whenever a statute authorizes a new custodial fund to be created, the state board of deposit shall meet to award the public moneys associated with the new custodial fund to a designated public depository.

(G) During a designation period, whenever a state agency, as defined in section 1.60 of the Revised Code, requests to change its public depository, the state board of deposit shall meet to consider the request.

Last updated September 8, 2023 at 9:57 AM

Section 135.13 | Evidence of inactive and interim deposits.

• Effective: March 22, 2012
• Latest Legislation: House Bill 209 - 129th General Assembly

Inactive deposits shall be evidenced by time certificates of deposit, each of which shall mature not later than the end of the period of designation, and may provide on its face that the amount of such deposit is payable upon written notice to be given a specified period before the date of repayment or by savings or deposit accounts, including, but not limited to, passbook accounts.

Interim deposits shall be evidenced by time certificates of deposit or by savings or deposit accounts, including, but not limited to, passbook accounts.

Section 135.14 | Investing interim moneys of public subdivisions.

• Effective: October 3, 2023
• Latest Legislation: House Bill 33 - 135th General Assembly

(A) As used in this section:

(1) "Treasurer" does not include the treasurer of state, and "governing board" does not include the state board of deposit.

(2) "Other obligations" includes notes whether or not issued in anticipation of the issuance of bonds.

(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 (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, and government national mortgage 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 the institution had not applied for such interim deposit.

(4) Bonds and other obligations of this state, or the political subdivisions of this state, provided that, with respect to bonds or other obligations of political subdivisions, all of the following apply:

(a) The bonds or other obligations are payable from general revenues of the political subdivision and backed by the full faith and credit of the political subdivision.

(b) The bonds or other obligations are rated at the time of purchase in the three highest classifications established by at least one nationally recognized statistical rating organization and purchased through a registered securities broker or dealer.

(c) The aggregate value of the bonds or other obligations does not exceed twenty per cent of interim moneys available for investment at the time of purchase.

(d) The treasurer or governing board is not the sole purchaser of the bonds or other obligations at original issuance.

(e) The bonds or other obligations mature within ten years from the date of settlement.

No investment shall be made under division (B)(4) of this section unless the treasurer or governing board has completed additional training for making the investments authorized by division (B)(4) of this section. The type and amount of additional training shall be approved by the treasurer of state and may be conducted by or provided under the supervision of the treasurer of 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 forty 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 (K) of section 1706.01 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 statistical rating organizations.

(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 two hundred seventy days after purchase.

(iv) The investment in commercial paper notes of a single issuer shall not exceed in the aggregate five per cent of interim moneys available for investment at the time of purchase.

(b) Bankers acceptances of banks that are insured by the federal deposit insurance corporation and that 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 treasurer of state and may be conducted by or provided under the supervision of the treasurer of state.

(C) Nothing in the classifications of eligible obligations set forth in divisions (B)(1) to (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) Except as provided in division (B)(4) or (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 divisions (D)(1) to (5), except letters of credit described in division (D)(2), of 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 written repurchase agreement shall not exceed thirty days and the market value of securities subject to a written repurchase agreement must exceed the principal value of the 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. 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 financial industry regulatory authority (FINRA), 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) 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 (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 (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 interim deposits pursuant to section 135.145 of the Revised Code and approved by the treasurer of state, no-load money market mutual funds pursuant to division (B)(5) of this section, or the Ohio subdivision's fund pursuant to division (B)(6) of this section.

(3) Divisions (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.

(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.

(Q) An investment made by the treasurer or governing board pursuant to this section prior to September 27, 1996, that was a legal investment under the law as it existed before September 27, 1996, may be held until maturity.

Last updated September 8, 2023 at 10:46 AM

Section 135.141 | Municipal corporation may invest interim moneys in linked deposits.

• Effective: March 11, 1987
• Latest Legislation: House Bill 461 - 116th General Assembly

In addition to the investments specified in section 135.14 of the Revised Code, the treasurer or the governing board of a municipal corporation may invest interim moneys in linked deposits as authorized by ordinance adopted pursuant to section 135.80 of the Revised Code.

Section 135.142 | Board of education investment of interim moneys.

• Effective: October 3, 2023
• Latest Legislation: House Bill 33 - 135th General Assembly

(A) In addition to the investments authorized by section 135.14 of the Revised Code, any board of education, by a two-thirds vote of its members, may authorize the treasurer of the board of education to invest up to forty per cent of the interim moneys of the board, available for investment at any one time, in either of the following:

(1) Commercial paper notes issued by any entity that is defined in division (K) of section 1706.01 of the Revised Code and has assets exceeding five hundred million dollars, and to which notes all of the following apply:

(a) The notes are rated at the time of purchase in the highest classification established by at least two nationally recognized statistical rating organizations.

(b) 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.

(c) The notes mature no later than two hundred seventy days after purchase.

(d) The investment in commercial paper notes of a single issuer shall not exceed in the aggregate five per cent of interim moneys of the board available for investment at the time of purchase.

(2) Bankers' acceptances of banks that are insured by the federal deposit insurance corporation and that mature no later than one hundred eighty days after purchase.

(B) No investment authorized pursuant to division (A) of this section shall be made, whether or not authorized by a board of education, unless the treasurer of the board of education has completed additional training for making the types of investments authorized pursuant to division (A) of this section. The type and amount of such training shall be approved and may be conducted by or provided under the supervision of the treasurer of state.

(C) The treasurer of the board of education shall prepare annually and submit to the board of education, the director of education and workforce, and the auditor of state, on or before the thirty-first day of August, a report listing each investment made pursuant to division (A) of this section during the preceding fiscal year, income earned from such investments, fees and commissions paid pursuant to division (D) of this section, and any other information required by the board, the director, and the auditor of state.

(D) A board of education may make appropriations and expenditures for fees and commissions in connection with investments made pursuant to division (A) of this section.

(E)(1) In addition to the investments authorized by section 135.14 of the Revised Code and division (A) of this section, any board of education that is a party to an agreement with the treasurer of state pursuant to division (G) of section 135.143 of the Revised Code and that has outstanding obligations issued under authority of section 133.10 of the Revised Code may authorize the treasurer of the board of education to invest interim moneys of the board in debt interests rated in either of the two highest rating classifications by at least two nationally recognized statistical rating organizations and issued by entities that are defined in division (K) of section 1706.01 of the Revised Code. The debt interests purchased under authority of division (E) of this section shall mature not later than the latest maturity date of the outstanding obligations issued under authority of section 133.10 or 133.301 of the Revised Code.

(2) If any of the debt interests acquired under division (E)(1) of this section ceases to be rated as there required, its issuer shall notify the treasurer of state of this fact within twenty-four hours. At any time thereafter the treasurer of state may require collateralization at the rate of one hundred two per cent of any remaining obligation of the entity, with securities authorized for investment under section 135.143 of the Revised Code. The collateral shall be delivered to and held by a custodian acceptable to the treasurer of state, marked to market daily, and any default to be cured within twelve hours. Unlimited substitution shall be allowed of comparable securities.

Last updated September 5, 2023 at 5:16 PM

Section 135.143 | Investment authority for state interim funds.

• Effective: April 30, 2024
• Latest Legislation: House Bill 101 - 135th General Assembly

(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)(a) Bonds, notes, and other obligations of the state of Ohio, including, but not limited to, any obligations issued by the treasurer of state, the Ohio public facilities commission, the Ohio housing finance agency, the Ohio water development authority, the Ohio turnpike infrastructure commission, the Ohio higher educational facility commission, and state institutions of higher education as defined in section 3345.011 of the Revised Code;

(b) Bonds, notes, and other obligations of any state or political subdivision thereof rated in the three highest categories by at least one nationally recognized statistical rating organization and purchased through a registered securities broker or dealer, provided the treasurer of state is not the sole purchaser of the bonds, notes, or other obligations at original issuance.

(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, any registered United States government securities dealer, or any counterparty rated in one of the three highest categories by at least one nationally recognized statistical rating organization or otherwise determined by the treasurer of state to have adequate capital and liquidity, under the terms of which agreement the treasurer of state purchases and the eligible financial institution, dealer, or counterparty agrees unconditionally to repurchase any of the securities that are listed in division (A)(1), (2), (3), (6), or (11) of this section. 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, dealer, or counterparty 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), (6), or (11) 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.

(c) For purposes of division (A)(4) of this section, the treasurer of state shall only buy or sell securities listed in division (A)(11) of this section issued by entities that are organized under the laws of this state, any other state, or the United States.

(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 entity that is organized under the laws of the United States or a state, which notes are rated in the two highest categories by two nationally recognized statistical rating organizations, provided that the total amount invested under this section in any commercial paper at any time shall not exceed forty 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, 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, savings accounts, or deposit accounts in eligible institutions applying for interim moneys as provided in section 135.08 of the Revised Code, including linked deposits as authorized under section 135.61 of the Revised Code;

(9) Negotiable certificates of deposit denominated in United States dollars issued by a nationally or state-chartered bank, a savings association or a federal savings association, a state or federal credit union, or a federally licensed or state-licensed branch of a foreign bank, which are rated in the two highest categories by two nationally recognized statistical rating organizations, provided that the total amount invested under this section in negotiable certificates of deposit 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. Interim funds invested in accordance with division (A)(9) of this section are not limited to institutions applying for interim moneys under section 135.08 of the Revised Code, nor are they subject to any pledging requirements described in sections 135.18, 135.181, or 135.182 of the Revised Code.

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

(11) Debt interests, other than commercial paper described in division (A)(6) of this section, rated in the three highest categories by two nationally recognized statistical rating organizations and issued by entities that are organized 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, provided that:

(a) The investments in debt interests other than commercial paper, when added to the investment in written repurchase agreements for securities listed in division (A)(3) or (11) of this section, shall not exceed in the aggregate twenty-five per cent of the state's portfolio.

(b) The investments in debt interests issued by foreign nations shall not exceed in the aggregate two per cent of the state's portfolio.

The treasurer of state shall invest under division (A)(11) 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.

(c) When added to the investment in commercial paper and negotiable certificates of deposit, the investments in the debt interests of a single issuer shall not exceed in the aggregate five per cent of the state's portfolio.

(d) For purposes of division (A)(11) of this section, a debt interest is rated in the three highest categories by two nationally recognized statistical rating organizations if either the debt interest itself or the issuer of the debt interest is rated, or is implicitly rated, in the three highest categories by two nationally recognized statistical rating organizations.

(e) For purposes of division (A)(11) of this section, the "state's portfolio" means the state's total average portfolio, as determined and calculated by the treasurer of state.

(12) No-load money market mutual funds rated in the highest category by one nationally recognized statistical rating organization or consisting exclusively of obligations described in division (A)(1), (2), or (6) of this section and repurchase agreements secured by such obligations;

(13) Obligations issued by, or on behalf of, an Ohio political subdivision under Chapter 133. of the Revised Code or Section 12 of Article XVIII, Ohio Constitution, and identified in an agreement described in division (G) of this section;

(14) Obligations issued by the state of Ohio, any political subdivision thereof, or by or on behalf of any nonprofit corporation or association doing business in this state rated in the four highest categories by at least one nationally recognized statistical rating organization and identified in an agreement described in division (K) of this section.

(B) On or before the tenth day of each month, the treasurer of state shall notify the state board of deposit that the following reports pertaining to the immediately preceding month have been posted to the web site maintained by the treasurer of state:

(1) The daily ledger report of state funds prepared in accordance with section 113.13 of the Revised Code;

(2) The monthly portfolio report detailing the current inventory of all investments and deposits held within the classification of interim moneys;

(3) The monthly activity report within the classification of interim moneys summarized by type of investment or deposit.

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 entity issuing obligations referred to in division (A)(13) of this section, which obligations mature within one year from the original date of issuance, 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 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 a 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, a reasonable estimate of the indirect costs associated with the purchasing of obligations 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, and the administration thereof. 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 political subdivision 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 under division (G) of this section.

(J) As used in this section, "political subdivision" means a county, township, municipal corporation, school district, or other body corporate and politic responsible for governmental activities in a geographic area smaller than that of the state.

(K)(1) The treasurer of state and any entity issuing obligations referred to in division (A)(14) of this section, which obligations require a conditional liquidity requirement, may enter into an agreement providing for the following:

(a) The purchase of the obligations by the treasurer of state on terms and subject to conditions set forth in the agreement;

(b) Payment to the treasurer of state of a fee as consideration for the agreement of the treasurer of state to purchase the obligations.

(2) The treasurer of state shall not enter into agreements under division (K)(1) of this section for obligations that, in the aggregate, exceed ten per cent of the state's total average portfolio, as determined and calculated by the treasurer of state.

(3) For purposes of division (A)(14) of this section, an obligation is rated in the four highest categories by at least one nationally recognized statistical rating organization if either the debt interest itself or the obligor of the debt interest is rated in the four highest categories by at least one nationally recognized statistical rating organization.

(4) All money collected by the treasurer of state from the fee imposed by division (K) of this section shall be deposited to the credit of the state securities tender program fund, which is hereby created in the state treasury. The amount of income from the state securities tender program credited to the state securities tender program fund shall not exceed one per cent of the average par value of obligations subject to agreements under division (K)(1) of this section. All other such income shall be credited to the general revenue fund. The treasurer of state may use the state securities tender program fund solely for operations of the office of the treasurer of state.

(L)(1) The treasurer of state and a state university or college issuing obligations under section 3345.12 of the Revised Code may enter into an agreement providing for the following:

(a) The purchase of those obligations by the treasurer of state pursuant to division (A)(3)(a) of this section on terms and subject to conditions set forth in the agreement;

(b) The department of higher education to withhold, in the event the state university or college does not pay bond service charges on the obligations when due, appropriated funds allocated to the state university or college in an amount sufficient to pay bond service charges on the obligations, less any amounts deposited for that purpose under the bond proceedings. Upon the request of the treasurer of state, the department of higher education shall promptly pay to the treasurer of state the amounts withheld.

(2) For purposes of division (L)(1) of this section, "obligations," "state university or college," "bond service charges," and "bond proceedings" have the same meanings as in section 3345.12 of the Revised Code.

Last updated February 7, 2024 at 10:19 AM

Section 135.144 | Investment of interim moneys in federally insured certificates of deposit.

• Effective: September 29, 2015
• Latest Legislation: House Bill 64 - 131st General Assembly

(A) In addition to the authority provided in section 135.14 or 135.143 of the Revised Code, the treasurer of state or the treasurer or governing board of a political subdivision may invest interim moneys in certificates of deposit in accordance with all of the following:

(1) The interim moneys initially are deposited with an eligible public depository described in section 135.03 of the Revised Code and selected, pursuant to section 135.12 of the Revised Code, by the treasurer of state or the treasurer or governing board of a political subdivision, for interim moneys of the state or of the political subdivision.

(2) For the treasurer of state or the treasurer or governing board of the political subdivision depositing the interim moneys pursuant to division (A)(1) of this section, the eligible public depository selected pursuant to that division invests the interim moneys in certificates of deposit of one or more federally insured banks, savings banks, or savings and loan associations, wherever located. The full amount of principal and any accrued interest of each certificate of deposit invested in pursuant to division (A)(2) of this section shall be insured by federal deposit insurance.

(3) For the treasurer of state or the treasurer or governing board of the political subdivision depositing the interim moneys pursuant to division (A)(1) of this section, the eligible public depository selected pursuant to that division acts as custodian of the certificates of deposit described in division (A)(2) of this section.

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

(5) The public depository provides to the treasurer of state or the treasurer or governing board of a political subdivision a monthly account statement that includes the amount of its funds deposited and held at each bank, savings bank, or savings and loan association for which the public depository acts as a custodian pursuant to this section.

(B) Interim moneys deposited or invested in accordance with division (A) of this section are not subject to any pledging requirements described in section 135.18, 135.181, or 135.182 of the Revised Code.

Section 135.145 | Redeposit of interim moneys moneys.

• Effective: September 29, 2015
• Latest Legislation: House Bill 64 - 131st General Assembly

(A) In addition to the authority provided in section 135.14 or 135.143 of the Revised Code for the investment or deposit of interim moneys, the treasurer of state or the treasurer or governing board of a political subdivision, upon the deposit of interim moneys with, or the award of active or inactive deposits to, an eligible public depository described in section 135.03 of the Revised Code and designated pursuant to section 135.12 of the Revised Code, may authorize the public depository to arrange for the redeposit of such public moneys in accordance with the following conditions:

(1) The public depository, on or after the date the public moneys are received, arranges for the redeposit of the moneys into deposit accounts in one or more federally insured banks, savings banks, or savings and loan associations that are located in the United States, and acts as custodian of the moneys deposited or redeposited under this section.

(2) If the amount of the public moneys deposited with and held at the close of business by the public depository exceeds the amount insured by the federal deposit insurance corporation, the excess amount is subject to the pledging requirements described in section 135.18, 135.181, or 135.182 of the Revised Code.

(3) The full amount of the public moneys redeposited by the public depository into deposit accounts in banks, savings banks, or savings and loan associations, plus any accrued interest, is insured by the federal deposit insurance corporation.

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

(5) The public depository provides to the treasurer of state or the treasurer or governing board of a political subdivision an account statement at least monthly and access to daily reporting that include the amount of its funds deposited and held at each bank, savings bank, or savings and loan association for which the public depository acts as a custodian pursuant to this section.

(B) Except as provided in division (A)(2) of this section, the public moneys deposited in accordance with this section are not subject to the pledging requirements described in section 135.18, 135.181, or 135.182 of the Revised Code.

Section 135.15 | Transferring funds from one classification to another.

• Effective: October 3, 2023
• Latest Legislation: House Bill 33 - 135th General Assembly

Whenever the governing board, other than the state board of deposit, is of the opinion that the actual amount of active deposits is insufficient to meet the anticipated demands on such active deposits, it shall direct the treasurer to sell interim money investments or deposits or transfer from the inactive deposits to the active deposits an amount sufficient to meet such demands. The board shall designate in such order the depositories from which withdrawals for such purpose shall be made and the amounts to be withdrawn from each. The treasurer shall immediately give appropriate written notice of such withdrawal to each public depository affected thereby, and at the expiration of the period of such notice shall make such withdrawals by presentation of certificates of deposit, or otherwise, in such manner as the board provides by appropriate regulations. In case there are two or more public depositories subject to such withdrawal, the board shall make such withdrawals from the public depositories paying the lowest rates of interest and in proportional amounts as near as is practicable.

Whenever the state board of deposit is of the opinion that the actual amount of active deposits is insufficient to meet the anticipated demands on such active deposits, it shall direct the treasurer of state to sell interim money investments or to redeem negotiated deposits in an amount sufficient to meet such demands. The treasurer of state shall use the treasurer of state's discretion in selecting the instruments to be sold or redeemed.

Last updated September 8, 2023 at 10:50 AM

Section 135.16 | Payment of interest.

• Effective: March 5, 1987
• Latest Legislation: House Bill 144 - 116th General Assembly

Interest on active deposits shall be paid or credited by the public depository at least quarterly and when the funds are withdrawn, computing the time of payment from the date of deposit. Interest on inactive deposits shall be paid or credited by the public depository to the treasurer according to the terms and conditions of the time certificates of deposit or savings or deposit accounts or when the funds are withdrawn. Interest on interim deposits shall be paid or credited by the public depository to the treasurer according to the terms and conditions of the time certificates of deposit or saving or deposit accounts, or when the funds are withdrawn. No service charge shall be made against any active deposit or collected from or paid by any treasurer unless such service charge is the same as is customarily imposed by institutions receiving money on deposit subject to check, in the municipal corporation in which the public depository of such deposit is located, in which event the treasurer may pay such charge.

Section 135.17 | Cash reserve.

• Effective: June 11, 1968
• Latest Legislation: Senate Bill 321 - 107th General Assembly

Each treasurer may at all times keep in the vaults of his office such amount, as a cash reserve, as is prescribed by the proper governing board, which amount shall not be required to be deposited pursuant to sections 135.01 to 135.21, inclusive, of the Revised Code. Each treasurer shall deposit or invest all the remaining public moneys in his possession in accordance with sections 135.01 to 135.21, inclusive, of the Revised Code.

Section 135.18 | Security for repayment of public moneys.

• Effective: September 29, 2015
• Latest Legislation: House Bill 64 - 131st General Assembly

(A) Each institution designated as a public depository and awarded public deposits under sections 135.01 to 135.21 of the Revised Code, except as provided in section 135.144 or 135.145 of the Revised Code, shall provide security for the repayment of all public deposits by selecting one of the following methods:

(1) Securing all uninsured public deposits of each public depositor separately as set forth in divisions (B) to (J) of this section;

(2) Securing all uninsured public deposits of every public depositor pursuant to section 135.181 or 135.182 of the Revised Code, as applicable, by establishing and pledging to the treasurer of state a single pool of collateral for the benefit of every public depositor at the public depository.

(B) If a public depository elects to provide security pursuant to division (A)(1) of this section, the public depository shall pledge to the public depositor, as security for the repayment of all public moneys deposited in the public depository during the period of designation pursuant to an award made under sections 135.01 to 135.21 of the Revised Code, eligible securities of aggregate market value at all times equal to at least one hundred five per cent of the total amount of the public depositor's uninsured public deposits.

(C) In order for a public depository to receive public moneys under this section, the public depository and the public depositor shall first execute an agreement that sets forth the entire arrangement among the parties and that meets the requirements described in 12 U.S.C. 1823(e). In addition, the agreement shall authorize the public depositor to obtain control of the collateral pursuant to division (D) of section 1308.24 of the Revised Code.

(D) The following securities or other obligations 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 (D)(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;

(11) Bonds or other obligations of any county, municipal corporation, or other legally constituted taxing subdivision of another state of the United States, or of any instrumentality of such county, municipal corporation, or other taxing subdivision, for which the full faith and credit of the issuer is pledged and, at the time of purchase of the bonds or other obligations, rated in one of the two highest categories by at least one nationally recognized statistical rating organization.

(E) An institution designated as a public depository shall designate a qualified trustee and place the eligible securities required by division (D) of this section with the trustee for safekeeping. The trustee shall hold the eligible securities in an account indicating the public depositor's security interest in the securities. The trustee shall report to the public depositor information relating to the securities pledged to secure the public deposits in the manner and frequency required by the public depositor.

(F) The qualified trustee shall enter into a custodial agreement with the public depositor and public depository in which the trustee agrees to comply with entitlement orders originated by the public depositor without further consent by the public depository or, in the case of collateral held by the public depository in an account at a federal reserve bank, the public depositor shall have the public depositor's security interest marked on the books of the federal reserve bank where the account for the collateral is maintained. If the public depository fails to pay over any part of the public deposits made by the public depositor therein as provided by law, the public depositor shall give written notice of this failure to the qualified trustee holding the securities pledged against its public deposits and, at the same time, shall send a copy of this notice to the public depository. Upon receipt of this notice, the trustee shall transfer to the public depositor for sale, the securities that are necessary to produce an amount equal to the public deposits made by the public depositor and not paid over, less the portion of the deposits covered by any federal deposit insurance, plus any accrued interest due on the deposits. The public depositor shall sell any of the bonds or other securities so transferred. When a sale of bonds or other securities has been so made and upon payment to the public depositor of the purchase money, the public depositor 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 public depositor and expenses of sale shall be paid to the public depository.

(G) When the public depository has placed eligible securities described in division (D)(1) of this section with a trustee for safekeeping, the public depository may at any time substitute or exchange eligible securities described in division (D)(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 public depositor's governing board, boards, or treasurer of any such substitution or exchange.

(H) When the public depository has placed eligible securities described in divisions (D)(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 public depositor's governing board, boards, or treasurer of any such substitution or exchange only if one of the following applies:

(1) The public depositor 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. The authorization may be effected by the public depositor 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 this notice and upon the period of authorization stated therein and upon the period of designation stated therein.

(2) The public depository notifies the public depositor and the trustee of an intended substitution or exchange, and the public depositor does not object to the trustee as to the eligibility or market value of the securities being substituted within three business days after the date appearing on the notice of proposed substitution. The notice to the public depositor and to the trustee shall be given in writing and delivered electronically. The trustee may assume in any case that the notice has been delivered to the public depositor. In order for objections of the public depositor to be effective, receipt of the objections must be acknowledged in writing by the trustee.

(3) The public depositor gives written authorization for a substitution or exchange of specific securities.

(I) The public depository shall notify any public depositor of any substitution or exchange under division (H)(1) or (2) of this section.

(J) Any federal reserve bank or branch thereof located in this state or federal home loan bank, 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 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 under this section, other than those belonging to itself or to an affiliate as defined in section 1101.01 of the Revised Code.

Notwithstanding the fact that a public depository is required to pledge eligible securities in certain amounts to secure deposits of public moneys, a trustee has 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 any officer of the state or subdivision. 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 the securities of the public depositor. The treasurer and the treasurer's bonders or surety shall be relieved from any liability to the public depositor or to the public depository for the loss or destruction of any securities deposited with a qualified trustee pursuant to this section.

Section 135.181 | Optional pledging requirements.

• Effective: September 29, 2015
• Latest Legislation: House Bill 64 - 131st General Assembly

(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) Prior to the creation of the Ohio pooled collateral program under section 135.182 of the Revised Code, 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 is at least equal to one hundred five per cent of the total amount of all public deposits to be secured by the pooled securities that are not covered by any federal deposit insurance. Each 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 securities 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.

(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 or federal home loan bank, 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 an 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 securities. If the superintendent finds that the applicant has been so authorized and has 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 to an amount that is less than one hundred 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 has 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 this notice, the trustee shall transfer to the treasurer for public sale, the pooled securities that are necessary to produce an amount equal to the deposits made by the treasurer and not paid over, less the portion of the deposits covered by any federal deposit insurance, plus any accrued interest due on the deposits; however, 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 that 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 the 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. 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 the 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 terms and conditions 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 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 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.

Section 135.182 | Ohio pooled collateral program.

• Effective: October 3, 2023
• Latest Legislation: House Bill 33 - 135th General Assembly

(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 that receives or holds any public deposits as defined in section 135.31 of the Revised Code.

(2) "Public depositor" means that term as defined in section 135.01 of the Revised Code, but also includes a county and any municipal corporation that has adopted a charter under Article XVIII, Ohio Constitution.

(3) "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, but for purposes of this section does not include the moneys of metropolitan housing authorities.

(B)(1) Not later than July 1, 2017, the treasurer of state shall create the Ohio pooled collateral program. Under this program, each institution designated as a public depository that selects the pledging method prescribed in division (A)(2) of section 135.18 or division (A)(2) of section 135.37 of the Revised Code shall pledge to the treasurer of state a single pool of eligible securities for the benefit of all public depositors at the public depository to secure the repayment of all uninsured public deposits at the public depository, provided that at all times the total market value of the securities so pledged is at least equal to either of the following:

(a) One hundred two per cent of the total amount of all uninsured public deposits;

(b) An amount determined by rules adopted by the treasurer of state that set forth the criteria for determining the aggregate market value of the pool of eligible securities pledged by a public depository pursuant to division (B) of this section. Such criteria shall include, but are not limited to, prudent capital and liquidity management by the public depository and the safety and soundness of the public depository as determined by a third-party rating organization.

(2) The treasurer of state shall monitor the eligibility, market value, and face value of the pooled securities pledged by the public depository. Each public depository 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, and report such information to the treasurer of state in a manner and frequency as determined by the treasurer of state pursuant to rules adopted by the treasurer of state. A public depositor shall be responsible for periodically confirming the accuracy of its account balances with the treasurer of state; otherwise, the treasurer of state shall be the sole public depositor responsible for monitoring and ensuring the sufficiency of securities pledged under this section.

(3) If, on any day, the total market value of the securities pledged by the public depository is less than that specified in division (B)(1)(a) or (b) of this section, whichever is applicable, the public depository shall have two business days to pledge additional eligible securities having a market value sufficient, when combined with the market value of eligible securities already pledged, to satisfy the requirement of division (B)(1)(a) or (b) of this section, as applicable, to secure the repayment of all uninsured public deposits at the public depository.

(C) The public depository shall designate a qualified trustee approved by the treasurer of state and place with such trustee for safekeeping the eligible securities pledged pursuant to division (B) of this section. The trustee shall hold the eligible securities in an account indicating the treasurer of state's security interest in the eligible securities. The treasurer of state shall give written notice of the trustee to all public depositors for which such securities are pledged. The trustee shall report to the treasurer of state information relating to the securities pledged to secure such public deposits in a manner and frequency as determined by the treasurer of state.

(D) In order for a public depository to receive public moneys under this section, the public depository and the treasurer of state shall first execute an agreement that sets forth the entire arrangement among the parties and that meets the requirements described in 12 U.S.C. 1823(e). In addition, the agreement shall authorize the treasurer of state to obtain control of the collateral pursuant to division (D) of section 1308.24 of the Revised Code.

(E) The securities or other obligations described in division (D) 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 or obligations pledged as collateral are at any time in default as to either principal or interest.

(F) Any federal reserve bank or branch thereof located in this state or federal home loan bank, 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 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 under this section, other than those belonging to itself or to an affiliate as defined in section 1101.01 of the Revised Code.

(G) The public depository may substitute, exchange, or release eligible securities deposited with the qualified trustee pursuant to this section, provided that such substitution, exchange, or release is effectuated pursuant to written authorization from the treasurer of state, and such action does not reduce the total market value of the securities to an amount that is less than the amount established 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 public deposits, a qualified trustee has 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) The qualified trustee shall enter into a custodial agreement with the treasurer of state and public depository in which the trustee agrees to comply with entitlement orders originated by the treasurer of state without further consent by the public depository or, in the case of collateral held by the public depository in an account at a federal reserve bank, the treasurer of state shall have the treasurer's security interest marked on the books of the federal reserve bank where the account for the collateral is maintained. 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 of state shall give written notice of this failure to the qualified trustee holding the pool of securities pledged against the public deposits, and at the same time shall send a copy of this notice to the public depository. Upon receipt of this notice, the trustee shall transfer to the treasurer of state for sale, the pooled securities that are necessary to produce an amount equal to the public deposits made by the public depositor and not paid over, less the portion of the deposits covered by any federal deposit insurance, plus any accrued interest due on the deposits. The treasurer of state shall sell any of the bonds or other securities so transferred. When a sale of bonds or other securities has been so made and upon payment to the public depositor of the purchase money, the treasurer of state 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 to the public depositor and expenses of sale shall be paid to the public depository.

(J) Any charges or compensation of a qualified trustee for acting as such under this section shall be paid by the public depository and in no event shall be chargeable to the public depositor or to any officer of the public depositor. 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 the securities of the public depositor. The treasurer and the treasurer's bonders or surety shall be relieved from any liability to the public depositor or to the public depository for the loss or destruction of any securities deposited with a qualified trustee pursuant to this section.

(K) A public depositor, treasurer, or the public depositor's or treasurer's bonders or surety are not liable for the loss of funds if a public depository fails to comply with the terms set forth in the agreement provided for in division (D) of this section for the appropriate level of collateral, as required under division (B)(1)(a) or (b) of this section, to secure the public deposits made under that agreement.

(L)(1) The following information is confidential and not a public record under section 149.43 of the Revised Code:

(a) All reports or other information obtained or created about a public depository for purposes of division (B)(1)(b) of this section;

(b) The identity of a public depositor's public depository;

(c) The identity of a public depository's public depositors.

(2) Nothing in this section prevents the treasurer of state from releasing or exchanging such confidential information as required by law or for the operation of the pooled collateral program.

(M) The treasurer of state may impose reasonable fees, including late fees, upon public depositories participating in the pooled collateral program to defray the actual and necessary expenses incurred by the treasurer in connection with the program. All such fees collected by the treasurer shall be deposited into the state treasury to the credit of the administrative fund created in section 113.20 of the Revised Code.

(N) The treasurer of state may adopt rules necessary for the implementation of this section and sections 135.18 and 135.181 of the Revised Code. Such rules shall be adopted in accordance with Chapter 119. of the Revised Code.

Last updated September 8, 2023 at 10:51 AM

Section 135.19 | Failure of public depository.

• Effective: March 17, 1989
• Latest Legislation: House Bill 584 - 117th General Assembly

(A) A treasurer and his bondsmen or surety shall be relieved from any liability for the loss of any public moneys deposited by him in a public depository in compliance with sections 135.01 to 135.21 of the Revised Code, if occasioned by the failure of the public depository.

(B) In addition to the relief from liability provided in division (A) of this section, the treasurer of state, deputy treasurer of state, and any executive director, director, or other person employed by the treasurer of state or a bondsman or surety of any of these are relieved from any liability for the loss of any public moneys deposited or invested pursuant to law by the treasurer of state, deputy treasurer of state, and any executive director, director, or other person employed by the treasurer of state; but, in no event, shall liability attach to the treasurer of state, deputy treasurer of state, or any executive director, director, or other person employed by the treasurer of state, or a bondsman or surety of any of these when the proximate cause of loss is due to any investment transaction made pursuant to law or to any risk arising from any investment transaction or investment made pursuant to law.

Section 135.20 | Proportion of deposits in various banks subject to reasonable variation.

• Effective: June 11, 1968
• Latest Legislation: Senate Bill 321 - 107th General Assembly

Except as regards initial deposits at the beginning of a period of designation, the requirements of sections 135.01 to 135.21, inclusive, of the Revised Code, respecting the proportions in which deposits in more than one public depository of the state or of the same subdivision are to be made and maintained, are subject to such reasonable variations as the exigencies of public business require.

Any public depository deeming itself aggrieved by reason of discrimination against it and in favor of any other such public depository may complain thereof to the proper governing board. Such board after giving one week's notice to such treasurer and to such other public depositories as are specified in such complaint, shall hear such complaint. If it finds that there has been and is such discrimination, it shall direct the treasurer to transfer public deposits among such public depositories by making withdrawals and deposits as specified in the order of the board. The treasurer shall comply with such order.

Section 135.21 | Investment earnings apportionment and crediting.

• Effective: March 30, 1999
• Latest Legislation: House Bill 674 - 122nd General Assembly

All investment earnings on money included within a public deposit of a subdivision and belonging to undivided tax funds shall, except as otherwise expressly provided by law, be apportioned by the auditor pro rata among the separate funds or taxing districts in the proportions in which they are entitled to receive distribution of such undivided tax funds, due allowance being made for sums transferred in advance of settlements. All investment earnings from other moneys deposited by a treasurer, which by reason of being custodial funds, or funds belonging in the treasury of a taxing, assessment, or other district of which the treasurer is acting as ex officio treasurer, or for any other reason, do not belong in the treasury of the state or subdivision shall, except as provided in section 135.351 of the Revised Code, be apportioned among and credited to the funds to which the principal sums of such deposits or investments belong. All other investment earnings, except as provided in section 135.351 of the Revised Code and by resolution adopted pursuant to section 3315.01 or 3375.391 of the Revised Code, shall be credited to the general fund of the county, municipal corporation, township, taxing district, assessment district, or other local authority to which the principal sum thereof belongs.

All investment earnings on money included within the state treasury shall be credited as provided in section 113.09 of the Revised Code.

The director of budget and management shall inform the treasurer of state in writing of the amount apportioned by the director to each fund or account in the state treasury. The auditor of a subdivision shall inform the treasurer of the subdivision in writing of the amount apportioned by the auditor to each fund, district, or account.

Section 135.22 | Annual continuing education programs for treasurers.

• Effective: September 29, 2013
• Latest Legislation: House Bill 59 - 130th General Assembly

(A) For purposes of this section:

(1) "Treasurer" has the same meaning as in section 135.01 of the Revised Code, but does not include a county treasurer or the treasurer of state. "Treasurer" includes any person whose duties include making investment decisions with respect to the investment or deposit of interim moneys.

(2) "Subdivision" has the same meaning as in section 135.01 of the Revised Code.

(B) To enhance the background and working knowledge of treasurers in investments, cash management, the collection of taxes, ethics, and in any other subject area that the treasurer of state determines is reasonably related to the duties of a treasurer, the treasurer of state shall provide annual continuing education programs for treasurers. A treasurer annually shall complete the continuing education programs described in this section, unless the treasurer annually provides a notice of exemption described in division (E) of this section.

(C) The treasurer of state shall determine the manner, content, and length of the continuing education programs after consultation with appropriate statewide organizations of local government officials.

(D) Upon successful completion of a continuing education program required by this section, the treasurer of state shall issue a certificate indicating that the treasurer has successfully completed the continuing education program prescribed by the treasurer of state. The treasurer of state shall forward to the auditor of state any certificates issued pursuant to this division by the treasurer of state. The auditor of state shall maintain in the auditor's records any certificates forwarded by the treasurer of state pursuant to this division. As part of the auditor of state's audit of the subdivision conducted in accordance with section 117.11 of the Revised Code, the auditor of state shall report whether the treasurer is in compliance with this section of the Revised Code.

(E) Division (B) of this section does not apply to any treasurer who annually provides a notice of exemption to the auditor of state. The notice shall be certified by the treasurer of state and shall provide that the treasurer is not subject to the continuing education requirements set forth in division (B) of this section, because the treasurer invests or deposits public moneys in the following investments only:

(1) Interim deposits pursuant to division (B)(3) of section 135.14 or section 135.145 of the Revised Code;

(2) No-load money market mutual funds pursuant to division (B)(5) of section 135.14 of the Revised Code;

(3) The Ohio subdivision's fund pursuant to division (B)(6) of section 135.14 of the Revised Code.

(F) In carrying out the duties required by this section, the treasurer of state may charge the subdivision served by the treasurer a registration fee that will meet actual and necessary expenses in connection with the training of the treasurer, including instruction fees, site acquisition costs, and the cost of course materials. Any necessary personal expenses of a treasurer incurred as a result of attending the continuing education courses shall be borne by the subdivision represented by the treasurer.

(G) The treasurer of state may allow any other interested person to attend any of the continuing education programs that are held pursuant to this section, provided that before attending any such continuing education program, the interested person has paid to the treasurer of state the full registration fee set for the continuing education program.

(H) All funds collected pursuant to this section shall be paid into the county treasurer education fund created pursuant to section 321.46 of the Revised Code, and the actual and necessary expenses of the treasurer of state in conducting the continuing education programs required by this section shall be paid from this fund.

(I) The treasurer of state may adopt reasonable rules not inconsistent with this section for the implementation of this section.

Section 135.31 | County depository definitions.

• Effective: October 3, 2023
• Latest Legislation: House Bill 33 - 135th General Assembly

As used in sections 135.31 to 135.40 of the Revised Code:

(A) "Active moneys" means an amount of public moneys in public depositories determined to be necessary to meet current demands upon a county treasury, and deposited in any of the following:

(1) A commercial account and withdrawable, in whole or in part, on demand;

(2) A negotiable order of withdrawal account as authorized in the "Consumer Checking Account Equity Act of 1980," 94 Stat. 146, 12 U.S.C.A. 1832(a);

(3) A money market deposit account as authorized in the "Garn-St. Germain Depository Institutions Act of 1982," 96 Stat. 1501, 12 U.S.C. 3503.

(B) "Inactive moneys" means all public moneys in public depositories in excess of the amount determined to be needed as active moneys.

(C) "Investing authority" means the treasurer, except as provided in section 135.34 of the Revised Code.

(D) "Public deposits" means public moneys deposited in a public depository pursuant to sections 135.31 to 135.40 of the Revised Code.

(E) "Public moneys" means all moneys in the treasury of a county or moneys coming lawfully into the possession or custody of the treasurer.

(F) "Treasurer" means the county treasurer.

(G) "No-load money market mutual fund" means a no-load money market mutual fund that is registered as an investment company under the "Investment Company Act of 1940," 54 Stat. 789, 15 U.S.C.A. 80a-1 to 80a-64, and that has the highest letter or numerical rating provided by at least one nationally recognized statistical rating organization.

Last updated September 8, 2023 at 10:52 AM

Section 135.32 | Institutions eligible as county public depositories.

• Effective: January 1, 2018
• Latest Legislation: House Bill 49 - 132nd General Assembly

(A) Any national bank, any bank doing business under authority granted by the superintendent of financial institutions, or any bank doing business under authority granted by the regulatory authority of another state of the United States, located in this state, is eligible to become a public depository, subject to sections 135.31 to 135.40 of the Revised Code. No bank shall receive or have on deposit at any one time public moneys, including public moneys as defined in section 135.01 of the Revised Code, in an aggregate amount in excess of thirty per cent of its total assets, as shown in its latest report to the comptroller of the currency, the superintendent of financial institutions, the federal deposit insurance corporation, or the board of governors of the federal reserve system.

(B) Any federal savings association or any savings and loan association or savings bank doing business under authority granted by the regulatory authority of another state of the United States, located in this state, and authorized to accept deposits is eligible to become a public depository, subject to sections 135.31 to 135.40 of the Revised Code. No savings association, savings and loan association, or savings bank shall receive or have on deposit at any one time public moneys, including public moneys as defined in section 135.01 of the Revised Code, in an aggregate amount in excess of thirty per cent of its total assets, as shown in its latest report to the former office of thrift supervision, the comptroller of the currency, the superintendent of financial institutions, the federal deposit insurance corporation, or the board of governors of the federal reserve system.

Section 135.33 | Designating county depositories every four years.

• Effective: June 15, 2000
• Latest Legislation: House Bill 473 - 123rd General Assembly

(A) The board of county commissioners shall meet every 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 four-year period commencing on the date of expiration of the preceding period.

At least sixty days before 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 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. 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.

Section 135.34 | Review of investment procedures semiannually.

• Effective: March 17, 1987
• Latest Legislation: Senate Bill 317 - 116th General Assembly

The board of county commissioners may review semiannually the investment procedures of the investing authority and the investing authority shall provide the necessary information to accomplish such review. When it is determined that the investing authority has failed to invest the inactive moneys of the county as provided by law, or in documented substantial, material, and continuing disregard of the advice or written policies of the county investment advisory committee pursuant to section 135.341 of the Revised Code, the board shall inform, by written notice, the investing authority of its finding. When, at the time of the next succeeding semiannual review, the board finds that such procedures, as included in the written notice, have not been corrected, the board may designate, by resolution, the board as a whole, one of its members, or one of its employees as the investing authority, and thereafter, until such action is rescinded by resolution of the board, the investing authority shall be as designated by the board.

Section 135.341 | County investment advisory committee.

• Effective: April 7, 2009
• Latest Legislation: Senate Bill 353 - 127th General Assembly

(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) The committee shall act as the investing authority in place of the treasurer for purposes of investing county funds and managing the county portfolio when this authority is transferred to it pursuant to divisions (E)(1) and (F)(2) of section 321.46 of the Revised Code or when ordered to do so by a court pursuant to section 321.47 of the Revised Code. For these purposes, the committee shall retain the services of an investment advisor described in division (D) of this section.

(F) 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.

(G) The committee of a county in which a county land reutilization corporation is organized under Chapter 1724. of the Revised Code may enter into a current unpaid or delinquent tax line of credit with the county treasurer for the purposes set forth in section 321.36 of the Revised Code if all of the following apply:

(1) The county treasurer requests in writing that the committee enter into a current unpaid or delinquent tax line of credit with the county treasurer.

(2) The committee approves, by affirmative vote of the two county commissioners designated to sit on the committee, the form of the current unpaid or delinquent tax line of credit and the execution of the current unpaid or delinquent tax line of credit.

(3) The maximum aggregate available amount under the current unpaid or delinquent tax line of credit shall not exceed fifteen per cent of the county's total average portfolio of inactive moneys as of the date of execution and delivery of the line of credit.

(4) The maximum term during which draws on the line of credit can be made shall be five years; provided, however, that nothing in this division prohibits the execution and delivery of another current unpaid or delinquent tax line of credit at the end of the term of a line of credit, if at that time no unreimbursed draws, plus accrued but unpaid interest thereon, have been outstanding beyond the last day of the second year immediately following the year in which the draw was made.

(5) Repayment in full of each draw on the line of credit, plus any accrued and unpaid interest thereon, shall be made not later than the last day of the second calendar year after the year in which the draw is made.

Section 135.35 | County inactive moneys.

• Effective: October 3, 2023
• Latest Legislation: House Bill 33 - 135th General Assembly

(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 public library 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, any other obligation guaranteed as to principal or interest by the United States, or any book entry, zero-coupon United States treasury security that is a direct obligation of the United States.

Nothing in the classification of eligible securities and obligations set forth in divisions (A)(2) to (10) 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, and government national mortgage 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 the bonds or other obligations of political subdivisions mature within ten years from the date of settlement;

(5) No-load money market mutual funds rated in the highest category at the time of purchase by at least one nationally recognized statistical rating organization or consisting exclusively of obligations described in division (A)(1), (2), or (6) of section 135.143 of the Revised Code 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 or with any recognized United States government securities dealer meeting the description in division (J)(1) of this section, under the terms of which agreements the investing authority lends securities and the eligible 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 inactive moneys of the county or moneys of a county public library fund. The investment of cash collateral received pursuant to a securities lending agreement may be invested only in instruments specified by the investing authority in the written investment policy described in division (K) of this section.

(8) Up to forty 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 or division (E) of section 1706.01 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 statistical rating organizations.

(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 two hundred seventy days after purchase.

(iv) The investment in commercial paper notes of a single issuer shall not exceed in the aggregate five per cent of interim moneys available for investment at the time of purchase.

(b) Bankers acceptances of banks that are insured by the federal deposit insurance corporation and that 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 treasurer of state and may be conducted by or provided under the supervision of the treasurer of state.

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

(a) The notes are rated in the three highest categories by at least two nationally recognized statistical rating organizations at the time of purchase.

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

(10) Debt interests rated at the time of purchase in the three highest categories by two nationally recognized statistical rating organizations and issued by foreign nations diplomatically recognized by the United States government. All interest and principal shall be denominated and payable in United States funds. The investments made under division (A)(10) of this section shall not exceed in the aggregate two per cent of a county's total average portfolio.

The investing authority 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, there is no prior history of default, and the debt interest matures not later than five years after purchase. For purposes of division (A)(10) of this section, a debt interest is rated in the three highest categories by two nationally recognized statistical rating organizations 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 statistical rating organizations.

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

(B) Nothing in the classifications of eligible obligations and securities set forth in divisions (A)(1) to (10) 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 public library 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. A treasury inflation-protected security shall not be considered a derivative, provided the security matures not later than five years after purchase.

(C) Except as provided in division (A)(4) or (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 or to a specific obligation or debt of a political subdivision of this state, 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 divisions (D)(1) to (5), except letters of credit described in division (D)(2), of 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 written repurchase agreement must exceed the principal value of the overnight written repurchase agreement, by at least two per cent. A written repurchase agreement shall not exceed thirty days, and the market value of securities subject to a written repurchase agreement must exceed the principal value of the 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 public library 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, the officer shall be credited with, and the officer's successor shall be charged with, the amount of moneys evidenced by such documents.

(J)(1) All investments, except for investments in securities described in divisions (A)(5), (6), and (11) of this section, shall be made only through a member of the financial industry regulatory authority (FINRA), 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 investing authority shall sign the investment policy of that investing authority. All brokers, dealers, and financial institutions, described in division (J)(1) of this section, initiating transactions with the investing authority by giving advice or making investment recommendations shall sign the investing 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 investing 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 public library fund only in time certificates of deposits or savings or deposit accounts pursuant to division (A)(3) of this section, no-load money market mutual funds pursuant to division (A)(5) 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 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 shall be a public record and available for inspection under section 149.43 of the Revised Code.

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

(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 public library fund, or agrees to provide investment advice to the investing authority.

(N)(1) An investment held in the county portfolio on September 27, 1996, that was a legal investment under the law as it existed before September 27, 1996, may be held until maturity.

(2) An investment held in the county portfolio on September 10, 2012, that was a legal investment under the law as it existed before September 10, 2012, may be held until maturity.

Last updated September 8, 2023 at 10:54 AM

Section 135.351 | Crediting interest.

• Effective: April 7, 2009
• Latest Legislation: Senate Bill 353 - 127th General Assembly

(A) Except as provided in sections 135.352 and 1545.22 of the Revised Code, all interest earned on money included within the county treasury shall be credited to the general fund of the county.

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

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

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

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

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

Section 135.352 | County library and local government support fund.

• Effective: June 20, 2008
• Latest Legislation: Senate Bill 185 - 127th General Assembly

The investment authority shall invest all moneys in the county public library fund that are not distributed due to an appeal of the budget commission's allocation of such fund. Interest earned on such investments shall be credited to the fund and distributed in accordance with section 5747.48 of the Revised Code.

Section 135.353 | County may invest inactive moneys in linked deposits.

• Effective: September 29, 2015
• Latest Legislation: House Bill 64 - 131st General Assembly

(A) In addition to the investments specified in section 135.35 of the Revised Code, the investing authority of a county may do all of the following:

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

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

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

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

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

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

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

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

(B) Inactive moneys deposited or invested in accordance with division (A)(3) of this section are not subject to any pledging requirements described in section 135.181, 135.182, or 135.37 of the Revised Code.

Section 135.354 | Redeposit of inactive moneys.

• Effective: September 29, 2015
• Latest Legislation: House Bill 64 - 131st General Assembly

(A) In addition to the authority provided in section 135.35 of the Revised Code for the investment or deposit of inactive moneys, the investing authority of a county, upon the deposit of active or inactive moneys with an eligible public depository described in section 135.32 of the Revised Code and selected by the investing authority, may authorize the public depository to arrange for the redeposit of such public moneys in accordance with the following conditions:

(1) The public depository, on or after the date the public moneys are received, arranges for the redeposit of the moneys into deposit accounts in one or more federally insured banks, savings banks, or savings and loan associations that are located in the United States, and acts as custodian of the moneys deposited or redeposited under this section.

(2) If the amount of the public moneys deposited with and held at the close of business by the public depository exceeds the amount insured by the federal deposit insurance corporation, the excess amount is subject to the pledging requirements described in section 135.181, 135.182, or 135.37 of the Revised Code.

(3) The full amount of the public moneys redeposited by the public depository into deposit accounts in banks, savings banks, or savings and loan associations, plus any accrued interest, is insured by the federal deposit insurance corporation.

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

(5) The public depository provides to the investing authority an account statement at least monthly and access to daily reporting that include the amount of its funds deposited and held at each bank, savings bank, or savings and loan association for which the public depository acts as a custodian pursuant to this section.

(B) Except as provided in division (A)(2) of this section, public moneys deposited in accordance with this section are not subject to the pledging requirements described in section 135.181, 135.182, or 135.37 of the Revised Code.

Section 135.36 | Transferring county funds from one classification to another.

• Effective: March 15, 1982
• Latest Legislation: House Bill 230 - 114th General Assembly

Whenever any deposit or investment acquired under section 135.35 of the Revised Code matures and becomes due and payable, the investing authority shall present it for payment according to its terms and shall collect the moneys payable thereon, provided that the principal may be reinvested without withdrawal. The money so collected shall be public moneys.

Whenever the board of county commissioners, county treasurer, or the investing authority determines that the actual amount of active moneys available is insufficient to meet the anticipated demands upon the treasury, the investing authority shall sell or liquidate such deposits or investments in an amount sufficient to meet such demands, and deposit such moneys in an active moneys deposit account. No deposit or investment so sold may be sold for less than the current market value. Neither the investing authority nor members of the board shall be held accountable for any loss occasioned by sale or liquidation of deposits or investments. Any loss or expense caused by such sale is payable as other expenses of the county.

Section 135.37 | Security for repayment of county public moneys.

• Effective: September 29, 2015
• Latest Legislation: House Bill 64 - 131st General Assembly

(A) Except as provided in section 135.353 or 135.354 of the Revised Code, any institution described in section 135.32 of the Revised Code in receipt of a deposit of public moneys under section 135.33 or 135.35 of the Revised Code shall provide security for the repayment of all public moneys deposited in the public depository by selecting one of the following methods:

(1) Securing all uninsured public deposits of each investing authority separately as set forth in divisions (B) to (I) of this section;

(2) Securing all uninsured public deposits of every public depositor pursuant to section 135.181 or 135.182 of the Revised Code, as applicable, by establishing and pledging to the treasurer of state a single pool of collateral for the benefit of each public depositor at the public depository.

(B) If a public depository elects to provide security pursuant to division (A)(1) of this section, the public depository shall pledge to the investing authority, as security for the repayment of all public moneys deposited in the public depository during the period of designation pursuant to an award made under section 135.33 of the Revised Code or pursuant to section 135.35 of the Revised Code, eligible securities of aggregate market value at all times equal to at least one hundred five per cent of the total amount of the investing authority's uninsured public deposits. Any securities listed in division (D) of section 135.18 of the Revised Code are eligible for such purpose.

(C) In order for a public depository to receive public moneys under this section, the public depository and the investing authority shall first execute an agreement that sets forth the entire arrangement among the parties and that meets the requirements described in 12 U.S.C. 1823(e). In addition, the agreement shall authorize the investing authority to obtain control of the collateral pursuant to division (D) of section 1308.24 of the Revised Code.

(D) An institution designated as a public depository shall designate a qualified trustee and place the eligible securities with the trustee for safekeeping. The trustee shall hold the eligible securities in an account indicating the investing authority's security interest in the securities. The trustee shall report to the investing authority information relating to the securities pledged to secure the public deposits in the manner and frequency requested by the investing authority.

(E) The qualified trustee shall enter into a custodial agreement with the investing authority and public depository in which the trustee agrees to comply with entitlement orders originated by the investing authority without further consent by the public depository or, in the case of collateral held by the public depository in an account at a federal reserve bank, the investing authority shall have the investing authority's security interest marked on the books of the federal reserve bank where the account for the collateral is maintained. If the public depository fails to pay over any part of the public deposits made by the investing authority therein as provided by law, the investing authority shall give written notice of this failure to the qualified trustee holding the securities pledged against its public deposits, and at the same time shall send a copy of this notice to the public depository. Upon receipt of this notice, the trustee shall transfer to the investing authority for sale, the securities that are necessary to produce an amount equal to the public deposits made by the investing authority and not paid over, less the portion of the deposits covered by any federal deposit insurance, plus any accrued interest due on the deposits. The investing authority shall sell any of the bonds or other securities so transferred. When a sale of bonds or other securities has been so made and upon payment to the investing authority of the purchase money, the investing authority 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 investing authority and expenses of sale shall be paid to the public depository.

(F) When the public depository has placed eligible securities described in division (D)(1) of section 135.18 of the Revised Code with a trustee for safekeeping, the public depository may at any time substitute or exchange eligible securities described in division (D)(1) of section 135.18 of the Revised Code 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 the investing authority of any such substitution or exchange.

(G) When the public depository has placed eligible securities described in divisions (D)(2) to (9) of section 135.18 of the Revised Code 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 from the investing authority of any such substitution or exchange only if one of the following applies:

(1) The investing authority 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. The authorization may be effected by the investing authority 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 this notice and upon the period of authorization stated therein and upon the period of designation stated therein.

(2) The public depository notifies the investing authority and the trustee of an intended substitution or exchange, and the investing authority does not object to the trustee as to the eligibility or market value of the securities being substituted within three business days after the date appearing on the notice of proposed substitution. The notice to the investing authority and to the trustee shall be given in writing and delivered electronically. The trustee may assume in any case that the notice has been delivered to the investing authority. In order for objections of the investing authority to be effective, receipt of the objections must be acknowledged in writing by the trustee.

(3) The investing authority gives written authorization for a substitution or exchange of specific securities.

(H) The public depository shall notify any investing authority of any substitution or exchange under division (G)(1) or (2) of this section.

(I) Any federal reserve bank or branch thereof located in this state or federal home loan bank, 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 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 under this section, other than those belonging to itself or to an affiliate as defined in section 1101.01 of the Revised Code.

Notwithstanding the fact that a public depository is required to pledge eligible securities in certain amounts to secure deposits of public moneys, a trustee has 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 investing authority or to any officer of the investing authority. 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 the securities of the investing authority. The treasurer and the treasurer's bonders or surety shall be relieved from any liability to the investing authority or to the public depository for the loss or destruction of any securities deposited with a qualified trustee pursuant to this section.

Section 135.38 | Exemption of county officials from prohibition against interest in contract.

• Effective: March 15, 1982
• Latest Legislation: House Bill 230 - 114th General Assembly

An officer, director, stockholder, employee, or owner of any interest in a public depository receiving public deposits pursuant to sections 135.31 to 135.40 of the Revised Code shall not be deemed to be interested, either directly or indirectly, as a result of such relationship, in the deposit of such public moneys for the purpose of any law of this state prohibiting an officer of any county from being interested in any contract of the county.

Section 135.39 | Exemption of county officials from liability.

• Effective: March 15, 1982
• Latest Legislation: House Bill 230 - 114th General Assembly

A county treasurer, county deputy treasurer, or members of a board of county commissioners, when acting as investing authorities, and their bondsmen or sureties shall be relieved from any liability for the loss of any public moneys deposited or invested by them when they have acted pursuant to law or an ordinance or resolution adopted by a county pursuant to a charter adopted under Article X, Ohio Constitution, but in no event shall liability attach to a treasurer, deputy treasurer, or member of a board where the proximate cause of the loss is due to a risk arising from an investment reasonably made under their authority as investing authorities.

Section 135.40 | County cash reserve.

• Effective: March 15, 1982
• Latest Legislation: House Bill 230 - 114th General Assembly

A county treasurer may keep at all times in the vaults of his office such amount of public moneys, as a cash reserve, as he deems to be necessary to transact the business of his office, which amount shall not be required to be deposited in public depositories. All the remaining public moneys in his possession shall be deposited in public depositories in accordance with sections 135.31 to 135.40 of the Revised Code.

Section 135.45 | State treasurer's investment pool.

• Effective: April 30, 2024
• Latest Legislation: House Bill 101 - 135th General Assembly

(A) Subject to division (B) of this section, a treasurer, governing board, or investing authority of a subdivision may pay public moneys of the subdivision into the Ohio subdivision's fund, which may be established in the custody of the treasurer of state. The treasurer of state shall invest the moneys in the fund in separately managed accounts and pooled accounts, including the state treasurer's investment pool, in the same manner, in the same types of instruments, and subject to the same limitations provided for the deposit and investment of interim moneys of the state, except that the fund shall not be invested in the linked deposits authorized under section 135.61 of the Revised Code.

(B)(1) On and after July 1, 1997, a treasurer, governing board, or investing authority of a subdivision that has not entered into an agreement with the treasurer of state under division (C) of this section shall not invest public moneys of the subdivision in a pooled account of the Ohio subdivision's fund under division (B)(6) of section 135.14 of the Revised Code or division (A)(6) of section 135.35 of the Revised Code if the pool does not maintain the highest letter or numerical rating provided by at least one nationally recognized statistical rating organization.

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

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

(C) A treasurer, governing board, or investing authority of a subdivision that wishes to invest public moneys of the subdivision in a separately managed account or pooled account of the Ohio subdivision's fund may enter into an agreement with the treasurer of state that sets forth the manner in which the money is to be invested. The treasurer of state shall invest the moneys in accordance with the agreement, subject to the limitations set forth in division (A) of this section. For purposes of this division, the limitation on investments in debt interests provided in division (A)(11)(a) of section 135.143 of the Revised Code shall not apply to a subdivision's excess reserves.

(D) The treasurer of state shall adopt such rules as are necessary for the implementation of this section, including the efficient administration of and accounting for the separately managed accounts and pooled accounts, including the state treasurer's investment pool, and the specification of minimum amounts that may be paid into such pools and minimum periods of time for which such payments shall be retained in the pools. The rules shall provide for the administrative expenses of the separately managed accounts and pooled accounts, including the state treasurer's investment pool, to be paid from the earnings and for the interest earnings in excess of such expenses to be credited to the several treasurers, governing boards, and investing authorities participating in a pool in a manner which equitably reflects the differing amounts of their respective investments in the pool and the differing periods of time for which such amounts are in the pool.

(E) The treasurer of state shall give bond with sufficient sureties, payable to the treasurers, governing boards, and investing authorities of subdivisions participating in the fund, for the benefit of the subdivisions whose moneys are paid into the fund for investment, in the total penal sum of two hundred fifty thousand dollars, conditioned for the faithful discharge of the treasurer of state's duties in relation to the fund.

(F) The treasurer of state and the treasurer of state's bonders or surety are liable for the loss of any interim moneys of the state and subdivisions invested under this section to the same extent the treasurer of state and the treasurer of state's bonders or surety are liable for the loss of public moneys under section 135.19 of the Revised Code.

(G) As used in this section:

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

(2)(a) "Subdivision" has the same meaning as in section 135.01 of the Revised Code, but also includes a county, a municipal corporation that has adopted a charter under Article XVIII, Ohio Constitution, or any government entity for which the fund is a permissible investment.

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

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

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

(5) "Excess reserves" means the amount of a subdivision's public moneys that exceed the average of a subdivision's annual operating expenses in the immediately preceding three fiscal years.

Last updated February 7, 2024 at 10:19 AM

Section 135.451 | Investments of history connection and capitol square review and advisory board.

• Effective: September 29, 2015
• Latest Legislation: House Bill 141 - 131st General Assembly

The Ohio history connection and the capitol square review and advisory board shall be eligible to pay any of their moneys into the Ohio subdivision's fund, to be invested by the treasurer of state in the same manner and subject to the same terms and conditions as public moneys of subdivisions paid into the fund under section 135.45 of the Revised Code.

Section 135.46 | Investment pools for temporary investment of bond proceeds.

• Effective: October 3, 2023
• Latest Legislation: House Bill 33 - 135th General Assembly

(A) The treasurer of state may create a taxable investment pool or a tax-exempt investment pool, or both, for the purpose of providing a procedure for the temporary investment of bond proceeds. The pool shall be in the custody of the treasurer of state.

(B) A treasurer, governing board, or investing authority of a subdivision, or any agency of the state that has debt-issuing authority may pay bond proceeds into either or both of the pools authorized under division (A) of this section.

(C) The treasurer of state shall invest the funds of the taxable investment pool authorized under division (A) of this section in the same manner, in the same types of instruments, and subject to the same limitations provided for the deposit and investment of interim moneys of the state and subdivisions under sections 135.14 and 135.143 of the Revised Code. The treasurer also may invest in any other taxable obligations issued by any political subdivision of the state.

(D) The treasurer of state shall invest the funds of the tax-exempt investment pool in debt obligations and participation interests in such obligations, if all of the following apply:

(1) The obligations are issued by or on behalf of any state of the United States, or any political subdivision, agency, or instrumentality of any such state;

(2) The interest on such obligations is exempt from federal income taxation;

(3) The obligations are rated in either of the two highest classifications established by at least one nationally recognized statistical rating organization.

(E)(1) The treasurer of state shall, pursuant to Chapter 119. of the Revised Code, adopt such rules as are necessary to carry out the purposes of this section and for the efficient administration and accounting of a pool established pursuant to division (A) of this section.

(2) The rules shall provide for the administrative expenses of such pool to be paid from its earnings and for the interest earnings in excess of such expenses to be credited to the several treasurers, governing boards, investing authorities, and agencies of the state participating in the pool in a manner that equitably reflects the differing amounts of their respective investments in the pool and the differing periods of time for which such amounts are in the pool.

(3) The rules shall establish standards governing pools authorized under division (A) of this section, taking into consideration all federal rebate and yield restrictions and the objective of maintaining a high degree of safety and liquidity.

(F) Upon creating a pool authorized under division (A) of this section, the treasurer of state shall give bond with sufficient sureties, payable to the treasurers, governing boards, and investing authorities of subdivisions and agencies of the state participating in the pool, for the benefit of the participating subdivisions and agencies, in the total penal sum of two hundred fifty thousand dollars, conditioned for the faithful discharge of the treasurer of state's duties in relation to the pool.

(G) The treasurer of state and the treasurer of state's bonders or surety are liable for the loss of any moneys of the state invested under this section through a pool established under division (A) of this section to the same extent the treasurer of state and the treasurer of state's bonders or surety are liable for the loss of public moneys under section 135.19 of the Revised Code.

(H) As used in this section:

(1) "Governing board" has the same meaning as in section 135.01 of the Revised Code.

(2) "Interim moneys" has the same meaning as in section 135.01 of the Revised Code.

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

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

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

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

Last updated September 8, 2023 at 10:56 AM

Section 135.47 | Securities lending program - fund.

• Effective: October 3, 2023
• Latest Legislation: House Bill 33 - 135th General Assembly

(A) There is hereby created the securities lending program.

(B) There is hereby created in the state treasury the securities lending program fund. Income from the interest earnings of the securities lending program in an amount calculated pursuant to division (D) of this section shall be credited to the fund. All other such income shall be credited to the general revenue fund.

(C) The treasurer of state may use the securities lending program fund for operations of the office of the treasurer of state or may transfer unexpended amounts in the fund to the treasurer's information technology reserve fund created under section 113.22 of the Revised Code.

(D) The amount of income from the interest earnings of the securities lending program that shall be paid into the securities lending program fund shall not exceed an amount based on an annual rate of one-quarter of one per cent of the total average daily par value of assets in the securities lending program, as determined and calculated by the treasurer of state. Such income shall be paid on a monthly basis.

Last updated September 8, 2023 at 10:57 AM

Section 135.48 | Adoption of rules.

• Effective: September 4, 2014
• Latest Legislation: Senate Bill 287 - 130th General Assembly

The state board of deposit may adopt rules under section 111.15 of the Revised Code that are necessary to implement this chapter.

Section 135.51 | Bank defaulting as public depository; retention and disposition of securities.

• Effective: January 1, 2018
• Latest Legislation: House Bill 49 - 132nd General Assembly

In case of any default on the part of a bank in its capacity as depository of the money of any county, municipal corporation, township, or school district, the board of county commissioners, the legislative authority of such municipal corporation, the board of township trustees, and the board of education of such school district, in lieu of immediately selling the securities received and held as security for the deposit of such money under authority of any section of the Revised Code, may retain the same, collect the interest and any installments of principal thereafter falling due on such securities, and refund, exchange, sell, or otherwise dispose of any of them, at such times and in such manner as such board of county commissioners, legislative authority, board of township trustees, or board of education determines to be advisable with a view to conserving the value of such securities for the benefit of such county, municipal corporation, township, or school district, and for the benefit of the depositors, creditors, and stockholders or other owners of such bank.

Section 135.52 | Bonds may be used in anticipation of collections - maturity - limitation - distribution of proceeds from sale.

• Effective: January 1, 2018
• Latest Legislation: House Bill 49 - 132nd General Assembly

In anticipation of the collection of the principal and interest of securities, or other disposition of them, as authorized by section 135.51 of the Revised Code, and of the payment of dividends in the liquidation of the depository bank, and for the purpose of providing public money immediately available for the needs of the county, municipal corporation, township, or school district, the taxing authority may issue bonds of the county, municipal corporation, township, or school district, in an amount not exceeding the moneys on deposit in the depository bank, the payment of which is secured by such securities, after crediting to such moneys the amount realized from the sale or other disposition of any other securities pledged or deposited for such moneys, or in an amount not exceeding the value or amount ultimately to be realized from such securities to be determined by valuation made under oath by two persons who are conversant with the value of the assets represented by such securities, whichever amount is the lesser, plus an amount equal to the interest accruing on such securities during one year from and after the date of default of such bank in its capacity as a depository. The maturity of such bonds shall not exceed ten years and they shall bear interest at a rate not exceeding the rate determined as provided in section 9.95 of the Revised Code. Such bonds shall be the general obligations of the county, municipal corporation, township, or school district issuing them. The legislation under which such bonds are issued shall comply with Section 11 of Article XII, Ohio Constitution. The amount of such bonds issued or outstanding shall not be considered in ascertaining any of the limitations on the net indebtedness of such county, municipal corporation, township, or school district prescribed by law. In all other respects, the issuance, maturities, and sale of such bonds shall be subject to Chapter 133. of the Revised Code.

A sufficient amount of the moneys received from principal on the sale of such bonds to cover the interest accruing on such securities for one year, to the extent determined by the authority issuing such bonds in the resolution or ordinance of issuance under this section, shall be paid into the bond retirement fund from which the bonds are to be redeemed, together with premiums and accrued interest. The balance of such principal shall be credited to the funds to which the moneys represented by such depository balance belong, and in the respective amounts of such funds.

Section 135.53 | Surplus assigned and delivered to defaulting bank or building and loan association.

• Effective: January 1, 2018
• Latest Legislation: House Bill 49 - 132nd General Assembly

All principal and interest collected by the proper officer or agent of the county, municipal corporation, township, or school district, on account of the securities mentioned in section 135.51 of the Revised Code, the proceeds of any sale or other disposition of any of such securities, and any dividends received from the liquidation of the defaulting bank, shall be paid into the bond retirement fund from which the bonds provided for in section 135.52 of the Revised Code are to be redeemed, until the aggregate of such payments equals the requirements of such fund, whereupon such securities, and any remaining depository balance, not anticipated by such bonds, to the extent then retained by such county, municipal corporation, township, or school district, shall be assigned and delivered to the defaulting bank, to its liquidating officer, or to its successor or assignee, together with a release or other instrument showing full satisfaction of the claim of such county, municipal corporation, township, or school district against such bank or officer.

Section 135.54 | Possession and control of securities vested in authorized agent - powers.

• Effective: March 15, 1982
• Latest Legislation: House Bill 230 - 114th General Assembly

Immediately upon the issuance and sale of bonds as authorized by section 135.52 of the Revised Code, the possession, management, and control of the securities mentioned in section 135.51 of the Revised Code, subject to the further disposition of such securities pursuant to sections 135.51 and 135.53 of the Revised Code, shall be transferred to and vested in the authority of the county, municipal corporation, township, or school district having charge of the administration of the bond retirement fund of such subdivision. Such authority shall have and exercise all the powers, rights, privileges, and immunities of an owner with respect to such securities, subject to the control of the board of county commissioners, the legislative authority of the municipal corporation, the board of township trustees, and the board of education, and unless otherwise specified in any resolution of such board of county commissioners, legislative authority, board of township trustees, or board of education, may, in case such securities consist of first mortgages accepted pursuant to section 131.09 of the Revised Code, pay taxes, insurance premiums, and repairs and maintenance of property covered by any such mortgage from the proceeds of such securities, in case of default in any such respect on the part of the mortgagor or owner of the property. Such payments shall be made, subject in all cases to reimbursement by the person primarily liable for such taxes, insurance premiums, and repairs and maintenance, from the fund for the retirement of such bonds.

Section 135.61 | Linked deposit program investments and rules.

• Effective: April 30, 2024
• Latest Legislation: House Bill 101 - 135th General Assembly

(A) For the purposes of this section:

(1) "Eligible borrower," "eligible credit union," and "eligible lending institution" have the same meanings as in section 135.62 of the Revised Code.

(2) "Eligible participant" and "eligible savings institution" have the same meanings as in section 135.70 of the Revised Code.

(B) The treasurer of state may invest in linked deposits under sections 135.61 to 135.66 and 135.70 to 135.71 of the Revised Code, provided that at the time any such linked deposits are placed, purchased, or designated, 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 any linked deposits, the treasurer of state shall give priority to the investment, liquidity, and cash flow needs of the state.

(C) The treasurer of state may, in accordance with section 111.15 of the Revised Code, adopt rules necessary for the implementation and administration of linked deposits authorized by this section, including, but not limited to, the manner in which an eligible lending institution or eligible savings institution is designated, and the manner in which linked deposits are placed, purchased, designated, held, and collateralized.

(D) Notwithstanding any contrary provision of the Revised Code, the treasurer of state may require an eligible credit union that holds linked deposits authorized under this section to pay interest at a rate not lower than the product of the interest rate set in the deposit agreement, as required by sections 135.623 and 135.703 of the Revised Code, multiplied by the sum of one plus the treasurer of state's assessment rate. The treasurer of state may, in accordance with section 119.03 of the Revised Code, adopt rules necessary for the implementation of this division.

(E)(1) Records of the treasurer of state, an eligible lending institution, or an eligible savings institution are not public records within the meaning of section 149.43 of the Revised Code if any of the following apply:

(a) The record is provided by an eligible borrower to an eligible lending institution, or by an eligible participant to an eligible savings institution, to obtain a financial service or product from such institution.

(b) The record results from a transaction between the eligible borrower and the eligible lending institution, or the eligible participant and the eligible savings institution, involving a financial product or service.

(c) An eligible lending institution or eligible savings institution otherwise obtains the record about an eligible borrower or eligible participant in connection with providing a financial product or service.

(2) The records specified in division (E)(1) of this section may include names, addresses, telephone numbers, social security numbers, income, credit scores, information obtained through cookies and other internet collection devices, loan amounts, contributors to a linked deposit savings account, and amounts contributed to, earned by, or distributed from a linked deposit savings account.

Last updated February 7, 2024 at 10:20 AM

Section 135.62 | Linked deposit program definitions.

• Effective: October 3, 2023
• Latest Legislation: House Bill 33 - 135th General Assembly

As used in sections 135.62 to 135.66 of the Revised Code:

(A) "Discount interest rate" means an interest rate below the prevailing interest rate that the treasurer of state determines eligible lending institutions are willing to pay to hold linked deposits.

(B) "Eligible borrower" means a borrower that has met all the requirements necessary to participate in the adoption linked deposit program under section 135.63 of the Revised Code, agricultural linked deposit program under section 135.64 of the Revised Code, small business linked deposit program under section 135.65 of the Revised Code, or home improvement linked deposit program under section 135.66 of the Revised Code.

(C) "Eligible credit union" means, notwithstanding any contrary provision of sections 135.01 to 135.21 of the Revised Code, a federal credit union, a foreign credit union licensed pursuant to section 1733.39 of the Revised Code, or a credit union as defined in section 1733.01 of the Revised Code, located in this state.

(D) "Eligible lending institution" means a financial institution that is eligible to make loans, agrees to participate in the applicable linked deposit program, and is one of the following:

(1) A public depository of state funds, or an eligible credit union designated under division (A) of section 135.12 of the Revised Code;

(2) For the agricultural linked deposit program, notwithstanding any contrary provision of sections 135.01 to 135.21 of the Revised Code, an institution of the farm credit system organized under the federal "Farm Credit Act of 1971," 85 Stat. 583, 12 U.S.C. 2001, as amended.

(E) "Homestead" means a dwelling owned and occupied in this state as a single-family primary residence by an individual for the purpose of qualifying for the home improvement linked deposit program. "Homestead" includes a house, condo, a unit in a multiple-unit dwelling, manufactured home or mobile home taxed as real property pursuant to division (B) of section 4503.06 of the Revised Code, or any other building with a residential classification, as allowed by the treasurer of state. "Homestead" includes so much of the land surrounding the dwelling as is reasonably necessary for the use of the dwelling as a residence, as determined by the treasurer of state.

(F) "Linked deposit" means a certificate of deposit, a share certificate, other financial institution instrument, or portion of an existing deposit of interim funds made in accordance with section 135.09 of the Revised Code placed, purchased, or designated by the treasurer of state with an eligible lending institution; provided the institution agrees to lend up to the value of such certificate of deposit, share certificate, or other financial institution instrument, or designated portion of an existing deposit to eligible borrowers for applicable linked deposit programs at the rate established in division (A) of section 135.624 of the Revised Code, and in accordance with the deposit agreement provided in section 135.623 of the Revised Code.

(G) "Linked deposit program" means a program authorized under sections 135.61 to 135.66 of the Revised Code and established by the treasurer of state pursuant to such sections.

(H) "Loan" means a contractual agreement under which an eligible lending institution agrees to lend money to an eligible borrower in the form of an upfront lump sum, a line of credit, or any other reasonable arrangement approved by the treasurer of state.

(I) "Manufactured home" has the same meaning as in section 3781.06 of the Revised Code.

(J) "Mobile home" has the same meaning as in section 4501.01 of the Revised Code.

(K) "Other financial institution instrument" means:

(1) For the agricultural linked deposit program under section 135.64 of the Revised Code, an investment by the treasurer of state in bonds, notes, debentures, or other obligations or securities issued by the federal farm credit bank with regard to an eligible lending institution;

(2) For all linked deposit programs other than the agricultural linked deposit program, a product that otherwise would pay the prevailing interest rate approved by the treasurer of state, for the purpose of providing eligible borrowers with the benefits of the applicable linked deposit program, and in accordance with the deposit agreement provided in section 135.623 of the Revised Code.

(L) "Owner" includes a holder of one of the several estates in fee, a vendee in possession under a purchase agreement or a land contract, a mortgagor, a life tenant, one or more tenants with a right of survivorship, tenants in common, a settlor of a revocable or irrevocable inter vivos trust holding the title to a homestead occupied by the settlor as of right under the trust, or any other determination as made by the treasurer of state.

(M) "Prevailing interest rate" means a current market interest rate selected by the treasurer of state that eligible lending institutions are willing to pay to hold deposits of the treasurer of state.

(N) "Qualifying adoption expense" means any expense incurred to legally adopt a child as described in division (C) of section 3107.055 of the Revised Code, including any costs incurred by the eligible borrower proximately relating to the completion and approval of the home study under section 3107.031 of the Revised Code, and any other expense as determined by the treasurer of state.

(O) "Treasurer of state's assessment rate" means a rate not exceeding ten per cent that is calculated in a manner determined by the treasurer of state and that seeks to account for the effect that varying tax treatment among different types of financial institutions has on the ability of financial institutions to pay competitive interest rates to hold deposits.

Last updated October 5, 2023 at 4:56 AM

Section 135.621 | Submission of linked deposit loan package.

• Effective: October 3, 2023
• Latest Legislation: House Bill 33 - 135th General Assembly

(A) An eligible lending institution that desires to receive a linked deposit shall accept and review applications for loans from eligible borrowers for linked deposit programs in which the eligible lending institution participates. The eligible lending institution shall apply all usual lending standards to determine the credit worthiness of each eligible borrower. No loan shall exceed the amount determined by the treasurer of state.

(B) An eligible borrower shall certify on its loan application that the reduced rate loan will be used exclusively for the purposes of the applicable linked deposit program, as described in section 135.63, 135.64, 135.65, or 135.66 of the Revised Code. Whoever knowingly makes a false statement concerning such application is guilty of the offense of falsification under section 2921.13 of the Revised Code.

(C) The eligible lending institution shall forward to the treasurer of state a linked deposit loan package, in the form and manner prescribed by the treasurer of state. The package shall include such information as required by the treasurer of state, including the amount of each loan requested by each eligible borrower and all other information as described in section 135.63, 135.64, 135.65, or 135.66 of the Revised Code for the applicable linked deposit program. The institution shall certify both of the following:

(1) That each applicant is an eligible borrower and, for each such eligible borrower, the present borrowing rate;

(2) That the eligible lending institution applied all of its usual lending standards to determine the credit worthiness of each eligible borrower.

(D) No fee shall be charged to any party for the preparation, processing, or reporting of any application to an eligible lending institution or the treasurer of state for participation in a linked deposit program.

Last updated September 11, 2023 at 3:52 PM

Section 135.622 | Accepting or rejecting a linked deposit loan package.

• Effective: October 3, 2023
• Latest Legislation: House Bill 33 - 135th General Assembly

(A) The treasurer of state may accept or reject a linked deposit loan package, or any portion of it, based on the treasurer of state's evaluation of the eligible borrowers included in the package, the amount of individual loans in the package, and the amount of state funds to be deposited with an eligible lending institution.

(B) Upon acceptance of the linked deposit loan package or any portion of it, the treasurer of state may place, purchase, or designate a linked deposit with the eligible lending institution at the discount interest rate, and in accordance with the deposit agreement required under section 135.623 of the Revised Code and the procedures established by the treasurer of state.

(C) Eligible lending institutions shall fully comply with this chapter.

Last updated September 11, 2023 at 3:57 PM

Section 135.623 | Deposit agreement.

• Effective: October 3, 2023
• Latest Legislation: House Bill 33 - 135th General Assembly

(A) An 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 135.62 to 135.66 of the Revised Code.

(B) The deposit agreement shall specify the maturity period of the linked deposit considered appropriate by the treasurer of state, which shall not exceed five years, as well as any other information, terms, or conditions the treasurer of state may require. Interest shall be paid by the eligible lending institution at times determined by the treasurer of state.

Last updated September 11, 2023 at 3:57 PM

Section 135.624 | Loan rates.

• Effective: October 3, 2023
• Latest Legislation: House Bill 33 - 135th General Assembly

(A) Upon the treasurer of state placing, purchasing, or designating a linked deposit, the eligible lending institution shall lend the corresponding funds to each approved eligible borrower listed in the accepted linked deposit loan package, and in accordance with the deposit agreement required by section 135.623 of the Revised Code. Unless otherwise specified in the deposit agreement, the interest rates on the loans to such eligible borrowers shall be at a rate equal to or greater than the present borrowing rate applicable to each specific eligible borrower in the accepted linked deposit loan package minus the difference between the prevailing interest rate and the discount interest rate at which the linked deposits were placed, made, or designated.

(B) The eligible lending institution shall provide to the treasurer of state a certificate of compliance with division (A) of this section, in the form and manner prescribed by the treasurer of state.

(C) Upon the conclusion of the maturity period, the treasurer of state may allow for the renewal of an application for a linked deposit program with the same terms for one or more additional maturity periods if certain requirements are met, as determined by the treasurer of state. In the event the treasurer of state does not allow for renewal, the requirements are not met, or the eligible borrower is not eligible for a renewal, an eligible borrower may submit a new application to participate in a linked deposit program.

(D) At the time of maturity or upon the repayment of a loan in its entirety, whichever is earlier, the eligible lending institution shall return the amount of the corresponding linked deposit to the treasurer of state in a timely manner, as prescribed by the treasurer of state.

(E) The treasurer of state shall take any and all steps necessary to implement and administer the linked deposit programs, including the development of guidelines as necessary.

Last updated September 11, 2023 at 3:57 PM

Section 135.625 | State not liable to borrowers or lenders.

• Effective: October 3, 2023
• Latest Legislation: House Bill 33 - 135th General Assembly

(A) The state and the treasurer of state are not liable to any eligible lending institution or any eligible borrower in any manner for payment of the principal or interest on a loan to an eligible borrower. Any delay in payments, default on the part of an eligible borrower, or misuse or misconduct on the part of an eligible lending institution or eligible borrower does not in any manner affect the deposit agreement required by section 135.623 of the Revised Code between the eligible lending institution and the treasurer of state.

(B) If an eligible lending institution changes the terms of a loan to an eligible borrower because of a delay in payments or default, the amount of the linked deposit associated with the loan plus applicable interest and without early withdrawal penalties shall be returned to the treasurer of state by the eligible lending institution in a timely manner as prescribed by the treasurer of state.

Last updated September 11, 2023 at 3:58 PM

Section 135.63 | Adoption linked deposit program.

• Effective: October 3, 2023
• Latest Legislation: House Bill 33 - 135th General Assembly

(A) The general assembly finds that strengthening families across Ohio is critical toward ensuring the long-term prosperity of the state. However, the upfront financial costs associated with adoption often deter families from pursuing the adoption process. Accordingly, it is declared to be the public policy of the state through the adoption linked deposit program to create the availability of reduced rate loans to reduce the financial burden of adoption and to strengthen families in this state.

(B) An eligible borrower for the adoption linked deposit program is an individual who is a resident of this state and to whom either of the following applies:

(1) The individual completes a home study pursuant to section 3107.031 of the Revised Code and is approved to adopt.

(2) The individual is pursuing an adoption through the public foster care system and meets the requirements set by the department of job and family services.

(C) An eligible lending institution for the adoption linked deposit program must be able to make secured or unsecured personal loans.

(D) An eligible borrower shall certify on the loan application that the reduced rate loan will be used exclusively to pay for qualifying adoption expenses.

Last updated February 8, 2024 at 3:30 PM

Section 135.64 | Agricultural linked deposit program.

• Effective: October 3, 2023
• Latest Legislation: House Bill 33 - 135th General Assembly

(A) The general assembly finds that Ohio's agricultural industry has long served as a critical component of the state's overall economy. However, an inadequate supply of affordable financing options that meet the needs of Ohio's agricultural community and other various economic pressures pose an ongoing challenge for farmers, agribusiness, and agricultural cooperatives as they work to grow or maintain sufficient operations throughout the year. Accordingly, it is declared to be the public policy of the state through the agricultural linked deposit program to create the availability of reduced rate loans to inject needed capital into the agricultural community, sustain or improve agricultural economic growth and profitability, and protect a core driver of the state's economy.

(B) An eligible borrower for the agricultural linked deposit program is any person engaged in agriculture that has all the following characteristics:

(1) Is headquartered or domiciled in this state;

(2) Maintains land or facilities for agricultural purposes in this state, provided that the land or facilities within this state comprise not less than fifty-one per cent of the total of all lands or facilities maintained by the person;

(3) Is either organized for profit or as an agricultural cooperative as defined in section 1729.01 of the Revised Code.

(C) An eligible lending institution for the agricultural linked deposit program must be able to make commercial loans.

(D) An eligible borrower shall certify on the loan application that the reduced rate loan will be used exclusively for agricultural purposes on land or in facilities owned or operated by the eligible borrower in this state and that the loan will materially contribute to the preservation or growth of the business.

Last updated October 5, 2023 at 4:55 AM

Section 135.65 | Small business linked deposit program.

• Effective: October 3, 2023
• Latest Legislation: House Bill 33 - 135th General Assembly

(A) The general assembly finds that small businesses make significant contributions to the state's economic well-being. However, various economic challenges, such as tightened capital availability, inflationary pressures, or rising interest rates, can cause disproportionate harm to small businesses and discourage aspiring job creators from taking root in Ohio. Accordingly, it is declared to be the public policy of the state through the small business linked deposit program to create the availability of reduced rate loans to inject needed capital into the business community, sustain or improve small business growth profitability, protect the jobs of residents, and foster economic growth and development within Ohio's small businesses.

(B) An eligible borrower for the small business linked deposit program is any person, including a person engaged in agriculture, that has all the following characteristics:

(1) Is headquartered or domiciled in this state;

(2) Maintains offices or operating facilities in this state, provided that the offices or operating facilities within the state comprise not less than fifty-one per cent of the total of all offices and operating facilities maintained by the business;

(3) Employs fewer than one hundred fifty employees, not less than fifty-one per cent of whom are residents of this state;

(4) Is organized for profit.

(C) An eligible lending institution for the small business linked deposit program must be able to make commercial loans.

(D) An eligible borrower shall certify on the loan application that the reduced rate loan will be used exclusively in this state to create new jobs, preserve existing jobs and employment opportunities, or materially contribute to the preservation or growth of the business.

Last updated October 5, 2023 at 4:55 AM

Section 135.66 | Home improvement linked deposit program.

• Effective: October 3, 2023
• Latest Legislation: House Bill 33 - 135th General Assembly

(A) The general assembly finds that making homeownership and maintenance costs more affordable is an important part of fostering a robust and lasting population across the state. However, homeowners often struggle to find adequate and affordable financing options to pursue home improvement, home restoration, or similar types of projects and upgrades aimed at maintaining or increasing the livability and value of a home. Accordingly, it is declared to be the public policy of the state through the home improvement linked deposit program to create the availability of reduced rate loans to improve, maintain, or restore an existing homestead.

(B) An eligible borrower for the home improvement linked deposit program is any individual who is a resident of this state and to whom both of the following apply:

(1) The individual is the owner of an existing homestead located in this state.

(2) The loan will be used to improve or maintain that existing homestead.

(C) An eligible lending institution for the home improvement linked deposit program must be able to make residential or secured or unsecured personal loans.

(D) An eligible borrower shall certify on the loan application that the reduced rate loan will be used exclusively to improve, maintain, or restore the eligible borrower's existing homestead, in accordance with the program goals outlined in division (A) of this section.

(E) An eligible borrower shall include in the loan application official estimates or receipts for the total amount of the loan.

Last updated October 5, 2023 at 4:55 AM

Section 135.70 | Homeownership savings linked deposit program definitions.

• Effective: April 30, 2024
• Latest Legislation: House Bill 101 - 135th General Assembly

As used in sections 135.70 to 135.71 of the Revised Code:

(A) "Closing costs" means a disbursement listed on a closing disclosure for the purchase of a home by an eligible participant.

(B) "Closing disclosure" means the statement of receipts and disbursements for a transaction related to real estate, including a statement prescribed under the Real Estate Settlement Procedures Act of 1974, 12 U.S.C. 2601 et seq., as amended, and the regulations thereunder.

(C) "Discount interest rate" means an interest rate below the prevailing interest rate that the treasurer of state determines eligible savings institutions are willing to pay to hold linked deposits.

(D) "Eligible credit union" has the same meaning as in section 135.62 of the Revised Code.

(E) "Eligible expenses" has the same meaning as in section 5747.85 of the Revised Code.

(F) "Eligible home costs" means the down payment, eligible expenses, and closing costs for the purchase of a home by an eligible participant, or the transfer of funds from one homeownership savings account to another homeownership savings account at a different eligible savings institution.

(G) "Eligible participant" means an individual who has met all of the requirements necessary to participate in the specific linked deposit program for which they have applied.

(H) "Eligible program costs" means costs corresponding to the purpose of the eligible linked deposit program.

(I) "Eligible savings institution" means a financial institution that:

(1) Offers accounts to residents of this state to save for the purposes related to the applicable linked deposit program;

(2) Agrees to participate in the applicable linked deposit program;

(3) Is a public depository of state funds, or an eligible credit union designated under division (A) of section 135.12 of the Revised Code.

(J) "Home" means "primary residence" as defined by section 5747.85 of the Revised Code.

(K) "Homeownership savings account" means a linked deposit savings account opened exclusively for the purpose of paying eligible home costs and in compliance with the requirements of section 135.71 of the Revised Code.

(L) "Linked deposit" means a certificate of deposit, share certificate, other financial institution instrument, or portion of an existing deposit of interim funds made in accordance with section 135.09 of the Revised Code that is placed, purchased, or designated by the treasurer of state with an eligible savings institution; provided the institution agrees to pay the premium savings rate to approved eligible participants, in accordance with the deposit agreement required by section 135.703 of the Revised Code.

(M) "Linked deposit program" means a program authorized under section 135.61 and sections 135.70 to 135.71 of the Revised Code and established by the treasurer of state pursuant to those sections.

(N) "Linked deposit savings account" means an interest-bearing account that is opened by an eligible participant at an eligible savings institution exclusively for the purpose of the applicable linked deposit program.

(O) "Other financial institution instrument" means a product that otherwise would pay the prevailing interest rate approved by the treasurer of state, for the purpose of providing eligible participants with the benefits of the applicable linked deposit program, and in accordance with the deposit agreement under section 135.703 of the Revised Code.

(P) "Premium savings rate" means a rate, established under section 135.704 of the Revised Code, that reflects the percentage rate increase above the present savings rate, as determined by the eligible savings institution, applicable to each eligible participant.

(Q) "Prevailing interest rate" means a current market interest rate selected by the treasurer of state that eligible savings institutions are willing to pay to hold deposits of the treasurer of state.

(R) "Program period" means five years from the date the eligible participant opens a linked deposit savings account with the eligible savings institution.

(S) "Treasurer of state's assessment rate" has the same meaning as in section 135.62 of the Revised Code.

Last updated February 7, 2024 at 10:25 AM

Section 135.701 | Submission of linked deposit savings package.

• Effective: October 3, 2023
• Latest Legislation: House Bill 33 - 135th General Assembly

(A) An eligible savings institution that desires to receive a linked deposit shall accept and review applications for a linked deposit savings account from eligible participants for linked deposit programs in which the eligible savings institution participates.

(B)(1) An eligible participant shall certify on its linked deposit savings account application all of the following:

(a) The eligible participant is a resident of this state.

(b) The funds in the linked deposit savings account shall be used exclusively for eligible program costs of the applicable linked deposit program.

(c) The eligible participant shall hold not more than one linked deposit savings account per program period at any eligible savings institution.

(2) Whoever knowingly makes a false statement concerning such application is guilty of the offense of falsification under section 2921.13 of the Revised Code.

(C) The eligible savings institution shall forward to the treasurer of state a linked deposit savings package, in the form and manner as prescribed by the treasurer of state. The package shall include such information as required by the treasurer of state. The institution shall certify that each applicant included in the linked deposit savings package is an eligible participant.

(D) No fee shall be charged to any party for the preparation, processing, or reporting of any application to an eligible savings institution for participation in a linked deposit program.

Last updated September 11, 2023 at 4:29 PM

Section 135.702 | Accepting or rejecting a linked deposit savings package.

• Effective: October 3, 2023
• Latest Legislation: House Bill 33 - 135th General Assembly

(A) The treasurer of state may accept or reject a linked deposit savings package, or any portion of it, based on the treasurer of state's evaluation of the amount of state funds to be deposited with an eligible savings institution.

(B) Upon acceptance of the linked deposit savings package or any portion of it, the treasurer of state may place, purchase, or designate a linked deposit with the eligible savings institution at the discount interest rate, and in accordance with the deposit agreement required under section 135.703 of the Revised Code and the procedures established by the treasurer of state.

(C) Eligible savings institutions shall fully comply with this chapter.

Last updated September 11, 2023 at 4:29 PM

Section 135.703 | Deposit agreement.

• Effective: October 3, 2023
• Latest Legislation: House Bill 33 - 135th General Assembly

(A) An eligible savings institution shall enter into a deposit agreement with the treasurer of state, which shall include the requirements necessary to carry out the purposes of sections 135.70 to 135.71 of the Revised Code.

(B) The deposit agreement shall specify the maturity period of the linked deposit considered appropriate by the treasurer of state, which shall not exceed the length of the program period, as well as any other information, terms, or conditions the treasurer of state may require. Interest shall be paid by the eligible savings institution at the times determined by the treasurer of state.

Last updated September 11, 2023 at 4:30 PM

Section 135.704 | Premium savings rate.

• Effective: October 3, 2023
• Latest Legislation: House Bill 33 - 135th General Assembly

(A)(1) Upon the treasurer of state placing, purchasing, or designating a linked deposit, the eligible savings institution shall offer the premium savings rate on a linked deposit savings account to each approved eligible participant listed in the accepted linked deposit savings package, and in accordance with the deposit agreement required by section 135.703 of the Revised Code. The premium savings rate shall apply to a linked deposit savings account as determined by the treasurer of state. Unless otherwise specified in the deposit agreement, the premium savings rate shall be at a rate equal to or greater than the present savings rate applicable to each specific eligible participant in the accepted linked deposit savings package plus the difference between the prevailing interest rate and the discount interest rate at which the linked deposits were placed, made, or designated.

(2) The premium savings rate shall only apply to a linked deposit savings account for the duration of the program period. After such time, the eligible participant's savings account is no longer a linked deposit savings account, and the eligible savings institution may determine and apply a market interest rate to the account.

(B) The eligible savings institution shall provide to the treasurer of state a certificate of compliance with division (A) of this section in the form and manner prescribed by the treasurer of state.

(C) At the time of maturity, the eligible savings institution shall return the amount of the corresponding linked deposit to the treasurer of state in a timely manner, as prescribed by the treasurer of state.

(D) The treasurer of state shall take any and all steps necessary to implement and administer the linked deposit programs, including the development of any guidelines as necessary.

Last updated September 11, 2023 at 4:30 PM

Section 135.705 | State not liable to participant or savings institution.

• Effective: October 3, 2023
• Latest Legislation: House Bill 33 - 135th General Assembly

(A) The state and the treasurer of state are not liable to any eligible savings institution or any eligible participant in any manner for the terms associated with a linked deposit savings account. Any misuse or misconduct on the part of an eligible savings institution or eligible participant does not in any manner affect the deposit agreement required by section 135.703 of the Revised Code between the eligible savings institution and the treasurer of state.

(B) If an eligible savings institution changes the terms of an eligible participant's linked deposit savings account, the amount of the linked deposit associated with the linked deposit savings account plus applicable interest and without early withdrawal penalties shall be returned to the treasurer of state by the eligible savings institution in a timely manner, as prescribed by the treasurer of state.

Last updated September 11, 2023 at 4:30 PM

Section 135.71 | Purpose of homeownership savings linked deposit program.

• Effective: April 30, 2024
• Latest Legislation: House Bill 101 - 135th General Assembly

(A) The general assembly finds that making homeownership more attainable is an important part of fostering a robust and lasting population across the state. However, individuals often struggle to accumulate the financial resources needed to purchase a home. Accordingly, it is declared to be the public policy of the state through the homeownership savings linked deposit program to make available premium rate savings accounts for the down payment and closing costs associated with the purchase of a home.

(B) An eligible participant for the homeownership savings linked deposit program is an individual who is a resident of this state and has applied for a homeownership savings account at an eligible savings institution.

(C) An eligible participant shall certify on the application that the funds in the homeownership savings account shall be used exclusively for eligible home costs.

(D) A homeownership savings account shall be owned by not more than one eligible participant and an eligible participant shall hold not more than one homeownership savings account per program period at any eligible savings institution.

(E) The treasurer of state shall report to the tax commissioner any information in the treasurer of state's possession deemed necessary by the tax commissioner to properly administer section 5747.85 of the Revised Code.

(F) Not later than January 31, 2027, the treasurer of state and the tax commissioner shall issue a report regarding the efficacy of the homeownership savings linked deposit program. The report shall include all of the following:

(1) The number of homeownership savings accounts created;

(2) The number of participating eligible savings institutions;

(3) The total amount contributed into the accounts;

(4) The average yield on the accounts;

(5) Any other information the treasurer of state or tax commissioner deems relevant.

The report shall be delivered to the governor, the speaker of the house of representatives, and the president of the senate.

Last updated February 7, 2024 at 10:26 AM

Section 135.80 | Municipal, port or lake facilities authority, and county linked deposit program.

• Effective: September 29, 2013
• Latest Legislation: House Bill 59 - 130th General Assembly

(A) The legislative authority of a municipal corporation, by ordinance; the board of directors of a port authority or a lake facilities authority, by resolution; or the board of county commissioners, by resolution, may establish a linked deposit program authorizing the treasurer or governing board of the municipal corporation, the board of directors of the port authority or lake facilities authority, or the investing authority of the county, as created or designated by the ordinance or resolution, to place certificates of deposit at up to three per cent below market rates with an eligible lending institution applying for interim moneys as provided in section 135.08 of the Revised Code, selected to invest port authority or lake facilities authority moneys in linked deposit programs pursuant to section 4582.54 or 353.15 of the Revised Code, or applying for inactive moneys as provided in section 135.32 of the Revised Code, provided the institution agrees to lend the value of such deposit to eligible borrowers at up to three per cent below the present borrowing rate applicable to each borrower. The ordinance or resolution shall include requirements and provisions that are necessary to establish the program, including, but not limited to:

(1) Eligibility requirements for borrowers who may receive reduced rate loans under the program;

(2) Application procedures for borrowers and institutions wishing to participate in the program;

(3) Review procedures for applications and criteria for acceptance or rejection of applications for reduced rate loans;

(4) Necessary agreements between the eligible lending institution and the treasurer or governing board of the municipal corporation, the board of directors of the port authority or lake facilities authority, or the investing authority of the county to carry out the purposes of the linked deposit program;

(5) Annual reports regarding the operation of the program to be made by the treasurer or governing board to the legislative authority, the eligible lending institution to the board of directors of the port authority or lake facilities authority, or the investing authority to the board of county commissioners.

(B) The municipal corporation and the treasurer or governing board, the port authority or lake facilities authority and the board of directors, and the county and the investing authority or the board of county commissioners, are not liable to any eligible lending institution in any manner for the payment of the principal or interest on any reduced rate loan made under the program, and any delay in payment or default on the part of any borrower does not in any manner affect the deposit agreement between the eligible lending institution and the treasurer or governing board, the board of directors, or the investing authority or board of county commissioners.

(C) For purposes of this section:

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

(2) "Port authority" means a port authority created in accordance with section 4582.22 of the Revised Code.

(3) "Lake facilities authority" means a lake facilities authority created in accordance with section 353.02 of the Revised Code.

Section 135.801 | Adopting resolution implementing residential facility linked deposit program.

• Effective: October 12, 2016
• Latest Legislation: House Bill 158 - 131st General Assembly

(A) As used in sections 135.801 to 135.803 of the Revised Code, "eligible lending institution," "eligible organization," "investing authority," "residential facility," and "residential facility linked deposit program" have the same meanings as in section 5126.51 of the Revised Code.

(B) The board of county commissioners may adopt a resolution implementing a residential facility linked deposit program under sections 5126.51 to 5126.62 of the Revised Code if it finds each of the following:

(1) The county board of developmental disabilities has adopted a resolution under section 5126.49 of the Revised Code.

(2) There is a shortage of residential facilities in the county for individuals with developmental disabilities.

(3) Eligible organizations, otherwise willing and able to develop residential facilities in the county, have been unable to do so because of high interest rates.

(4) Placement of residential facility linked deposits will assist in financing the development of residential facilities in the county that otherwise would not be developed because of high interest rates.

(5) Public moneys of the county are available for purposes of the residential facility linked deposit program.

(6) At least one eligible lending institution has an office located within the territorial limits of the county into which the board may deposit the public moneys of the county.

Section 135.802 | Contents of resolution implementing residential facility linked deposit program.

• Effective: October 6, 2009
• Latest Legislation: Senate Bill 79 - 128th General Assembly

The board of county commissioners shall include each of the following in a resolution implementing a residential facility linked deposit program under sections 5126.51 to 5126.62 of the Revised Code:

(A) Specific findings of fact justifying implementation of the residential facility linked deposit program in the county;

(B) Guidelines to be followed by the county board of developmental disabilities in establishing standards under section 5126.49 of the Revised Code for approving applications for linked deposit loans;

(C) Instructions to the county's investing authority as necessary for the placement and monitoring of, and for reporting with regard to, residential facility linked deposits under sections 5126.59 to 5126.61 of the Revised Code;

(D) Any information the board requires an applicant for a residential facility linked deposit loan to provide to the county board of developmental disabilities that would not otherwise be provided to that board by the applicant pursuant to sections 5126.51 to 5126.62 of the Revised Code.

The board shall transmit a certified copy of the resolution to the county board of developmental disabilities and the county's investing authority, unless the board is itself that authority.

Section 135.803 | Certifying availability of public moneys.

• Effective: October 6, 2009
• Latest Legislation: Senate Bill 79 - 128th General Assembly

On receiving a resolution from the county board of developmental disabilities approving under section 5126.55 of the Revised Code development of a proposed residential facility, the board of county commissioners shall determine whether public moneys of the county are available for a residential facility linked deposit and shall certify to the county board of developmental disabilities either that public moneys are available or that public moneys are not available. If public moneys are not available the certification shall indicate the date, if any, on which the board of county commissioners anticipates that public moneys will be available.

Section 135.804 | Property tax payment linked deposit programs definitions.

• Effective: April 7, 2009
• Latest Legislation: House Bill 130 - 127th General Assembly

As used in sections 135.804 to 135.807 of the Revised Code:

(A) "Taxes" has the same meaning as in section 323.01 of the Revised Code.

(B) "Eligible borrower" means a person meeting all of the following:

(1) The person is the owner of a homestead that is not charged with more than two years' worth of certified delinquent taxes.

(2) The person had total income in the year prior to submitting an application for a reduced rate loan under a property tax payment linked deposit program of the lesser of fifty thousand dollars or the total income limit established pursuant to section 135.805 of the Revised Code by the board of county commissioners as an eligibility requirement for participation in a property tax payment linked deposit program.

(3) The person meets all other eligibility requirements established pursuant to section 135.805 of the Revised Code by the board of county commissioners for participation in a property tax payment linked deposit program.

(C) "Eligible lending institution" means a financial institution that meets all of the following:

(1) The financial institution is eligible to make loans to individuals that are secured by mortgages, including mortgages commonly known as reverse mortgages.

(2) The financial institution has an office located within the territorial limits of the county.

(3) The financial institution is an eligible public depository described in section 135.32 of the Revised Code into which the county's investing authority may deposit the public moneys of the county.

(4) The financial institution has entered into an agreement described in division (B)(4) of section 135.805 of the Revised Code with the investing authority of the county to participate in the property tax payment linked deposit program.

(D)(1) "Homestead" means either of the following:

(a) A dwelling, including a unit in a multiple-unit dwelling and a manufactured home or mobile home taxed as real property pursuant to division (B) of section 4503.06 of the Revised Code, owned and occupied as a home by an individual whose domicile is in this state and who has not acquired ownership from a person, other than the individual's spouse, related by consanguinity or affinity for the purpose of qualifying for a property tax payment linked deposit program.

(b) A unit in a housing cooperative that is occupied as a home, but not owned, by an individual whose domicile is in this state.

(2) The homestead shall include so much of the land surrounding it, not exceeding one acre, as is reasonably necessary for the use of the dwelling or unit as a home. An owner includes a holder of one of the several estates in fee, a vendee in possession under a purchase agreement or a land contract, a mortgagor, a life tenant, one or more tenants with a right of survivorship, tenants in common, and a settlor of a revocable or irrevocable inter vivos trust holding the title to a homestead occupied by the settlor as of right under the trust.

(E) "Housing cooperative" means a housing complex of at least two units that is owned and operated by a nonprofit corporation that issues a share of the corporation's stock to an individual, entitling the individual to live in a unit of the complex, and collects a monthly maintenance fee from the individual to maintain, operate, and pay the taxes of the complex.

(F) "Investing authority" and "public moneys" have the same meanings as in section 135.31 of the Revised Code.

(G) "Lien certificate" means the certificate described in section 135.807 of the Revised Code.

(H) "Old age and survivors benefits received pursuant to the 'Social Security Act'" or "tier I railroad retirement benefits received pursuant to the 'Railroad Retirement Act'" means:

(1) Old age benefits payable under the social security or railroad retirement laws in effect on the last day of the calendar year prior to the year for which a reduced rate loan under a property tax payment linked deposit program is applied for, or, if no such benefits are payable that year, old age benefits payable the first succeeding year in which old age benefits under the social security or railroad retirement laws are payable, except in those cases where a change in social security or railroad retirement benefits results in a reduction in income.

(2) The lesser of:

(a) Survivors benefits payable under the social security or railroad retirement laws in effect on the last day of the calendar year prior to the year for which a reduced rate loan under a property tax payment linked deposit program is applied for, or, if no such benefits are payable that year, survivors benefits payable the first succeeding year in which survivors benefits are payable; or

(b) Old age benefits of the deceased spouse, as determined under division (H)(1) of this section, upon which the surviving spouse's survivors benefits are based under the social security or railroad retirement laws, except in those cases where a change in benefits would cause a reduction in income.

Survivors benefits are those described in division (H)(2)(b) of this section only if the deceased spouse received old age benefits in the year in which the deceased spouse died. If the deceased spouse did not receive old age benefits in the year in which the deceased spouse died, then survivors benefits are those described in division (H)(2)(a) of this section.

(I) "Permanently and totally disabled" means a person who, on the first day of January of the year that a reduced rate loan under a property tax payment linked deposit program is applied for, has some impairment in body or mind that makes the person unable to work at any substantially remunerative employment that the person reasonably is able to perform and that will, with reasonable probability, continue for an indefinite period of at least twelve months without any present indication of recovery therefrom or has been certified as permanently and totally disabled by a state or federal agency having the function of so classifying persons.

(J) "Property tax payment linked deposit program" means a countywide program authorized under section 135.805 of the Revised Code and established by the board of county commissioners of a county pursuant to that section.

(K) "Sixty-five years of age or older" means a person who has attained age sixty-four prior to the first day of January of the year of application for a reduced rate loan under a property tax payment linked deposit program.

(L) "Total income" means the adjusted gross income of the owner and the owner's spouse for the year preceding the year in which application for a reduced rate loan under a property tax payment linked deposit program is made, as determined under the "Internal Revenue Code of 1986," 100 Stat. 2085, 26 U.S.C.A. 1, as amended, adjusted as follows:

(1) Subtract the amount of disability benefits included in adjusted gross income, but not to exceed fifty-two hundred dollars;

(2) Add old age and survivors benefits received pursuant to the "Social Security Act" that are not included in adjusted gross income;

(3) Add retirement, pension, annuity, or other retirement payments or benefits not included in adjusted gross income;

(4) Add tier I and tier II railroad retirement benefits received pursuant to the "Railroad Retirement Act," 50 Stat. 307, 45 U.S.C.A. 228;

(5) Add interest on federal, state, and local government obligations;

(6) For a person who received a reduced rate loan under a property tax payment linked deposit program for a prior year on the basis of being permanently and totally disabled and whose current application for a reduced rate loan is made on the basis of age, subtract the following amount:

(a) If the person received disability benefits that were not included in adjusted gross income in the year preceding the first year in which the person applied for a reduced rate loan on the basis of age, subtract an amount equal to the disability benefits the person received in that preceding year, to the extent included in total income in the current year and not subtracted under division (L)(1) of this section in the current year;

(b) If the person received disability benefits that were included in adjusted gross income in the year preceding the first year in which the person applied for a reduced rate loan on the basis of age, subtract an amount equal to the amount of disability benefits that were subtracted pursuant to division (L)(1) of this section in that preceding year, to the extent included in total income in the current year and not subtracted under division (L)(1) of this section in the current year.

Disability benefits that are paid by the department of veterans affairs or a branch of the armed forces of the United States on account of an injury or disability shall not be included in total income.

Section 135.805 | Property tax payment linked deposit programs.

• Effective: March 30, 2007
• Latest Legislation: House Bill 293 - 126th General Assembly

(A) The general assembly finds that many low to moderateincome senior citizens and permanently and totally disabled citizens face financial hardship and find it difficult to timely pay property taxes on their homesteads, which can lead to delinquencies, penalties, declines in tax receipts, foreclosures, a loss of stable and affordable housing, a loss of neighborhoods and communities, and a decline in property values. Accordingly, it is declared to be the public policy of the state through property tax payment linked deposit programs established by counties to provide a source of low-cost funds for lending purposes to assist these citizens in timely paying property taxes on their homesteads.

(B) A board of county commissioners, by resolution, may establish for the benefit of persons sixty-five years of age or older, or persons who are permanently and totally disabled, or both groups of persons, a property tax payment linked deposit program. The program shall authorize the investing authority of the county, in accordance with division (A)(2) of section 135.353 of the Revised Code, to place certificates of deposit at up to three per cent below market rates with an eligible lending institution, provided that the eligible lending institution agrees to lend the value of such deposit to eligible borrowers at up to three per cent below the present borrowing rate applicable to each eligible borrower. The resolution shall include requirements, parameters, limitations, and other provisions that are consistent with sections 135.804 to 135.807 of the Revised Code and are necessary to establish and carry out the property tax payment linked deposit program, including, but not limited to, all of the following:

(1) Eligibility requirements for borrowers who may receive reduced rate loans under the property tax payment linked deposit program, including both of the following:

(a) A total income limit for a borrower to be eligible for such a loan;

(b) An indebtedness limit that a borrower may not exceed to be eligible for such a loan, under which the sum of all recorded liens on the homestead plus the amount of the reduced rate loan cannot exceed eighty per cent of the homestead's true value as most recently determined by the county auditor.

(2) Application procedures for eligible borrowers and eligible lending institutions wishing to participate in the property tax payment linked deposit program;

(3) Review procedures for applications and criteria for acceptance or rejection of applications for reduced rate loans under the property tax payment linked deposit program;

(4) Necessary agreements between the eligible lending institution and the investing authority of the county to carry out the purposes of the property tax payment linked deposit program, including procedures for the payment directly to the county treasurer by the eligible lending institution of the property taxes due on the homestead and delivery by the county treasurer to the eligible lending institution of the lien certificate as provided in section 135.807 of the Revised Code;

(5) Annual reports regarding the operation of the property tax payment linked deposit program to be made by the investing authority to the board of county commissioners.

(C) A board of county commissioners may appropriate funds from the general fund of the county or any other lawfully available funds of the county for the purpose of defraying some or all of the closing costs and expenses of reduced rate loans made by eligible lending institutions to eligible borrowers pursuant to the property tax payment linked deposit program.

(D) The county and its investing authority and the board of county commissioners are not liable to any eligible lending institution in any manner for the payment of the principal or interest on any reduced rate loan made under the property tax payment linked deposit program, and any delay in payment or default on the part of any borrower does not in any manner affect the deposit agreement between the eligible lending institution and the investing authority or board of county commissioners.

Section 135.806 | Duties of lending institution on receipt of RC 135.805 certificate.

• Effective: March 30, 2007
• Latest Legislation: House Bill 293 - 126th General Assembly

Upon placement of a certificate of deposit with an eligible lending institution pursuant to an agreement described in section 135.805 of the Revised Code, the eligible lending institution shall do both of the following:

(A) Lend funds pursuant to the agreement to an eligible borrower;

(B) Comply fully with the requirements of sections 135.804 to 135.807 of the Revised Code.

Section 135.807 | Delivery of lien certificate to eligible lending institution.

• Effective: January 30, 2014
• Latest Legislation: House Bill 72 - 130th General Assembly

(A) A property tax payment linked deposit program shall provide for the delivery of a lien certificate to an eligible lending institution making payment to the county treasurer, pursuant to a loan agreement between the eligible lending institution and eligible borrower, of some or all of the taxes then due on the homestead of that eligible borrower.

(B)(1) To ensure uniformity among all counties, the tax commissioner shall prescribe the form for a lien certificate delivered pursuant to division (A) of this section, which form shall include the identity of the homestead, the eligible borrower, the eligible lending institution, the amount of taxes paid by that eligible lending institution, and the tax year for which the taxes were paid. The tax commissioner shall distribute the forms to the county treasurers of all counties in which a property tax payment linked deposit program is established.

(2) A county treasurer shall use the lien certificate form prescribed by the tax commissioner, except that, prior to the time that a lien certificate form is prescribed and the forms are distributed by the tax commissioner, the form shall be prepared by the county treasurer of the county, contain the information required by division (B)(1) of this section, and include the following sentence: "This lien certificate is delivered pursuant to section 135.807 of the Revised Code and vests in the eligible lending institution the first lien held previously by the state and its taxing districts for the amount of taxes paid by the eligible lending institution, together with any and all unpaid interest thereon."

(C)(1) The delivery of the lien certificate pursuant to division (A) of this section vests in the eligible lending institution the first lien held previously by the state and its taxing districts for the amount of the taxes paid by the eligible lending institution, together with any unpaid interest thereon from the date of delivery at the interest rate specified in the loan agreement between the eligible lending institution and the eligible borrower. The lien is superior to any subsequent tax liens.

(2) Subject to division (C)(3) of this section, the lien certificate delivered pursuant to division (A) of this section is superior to all other liens and encumbrances upon the homestead described in that lien certificate, and the lien continues in full force and effect until the amount of all taxes paid by the eligible lending institution, together with any unpaid interest thereon, has been repaid to the eligible lending institution.

(3) With respect to the priority as among first liens of the state and its taxing districts, the priority is determined by the date that the first liens of the state and its taxing districts attached pursuant to section 323.11 of the Revised Code, with first priority to the earliest attached lien and each immediately subsequent priority based upon the next earliest attached lien.

(D) The eligible lending institution may record the lien certificate or memorandum thereof as a mortgage on the land in the office of the county recorder of the county in which the homestead is situated. The county recorder shall record the certificate in the official records provided for in section 317.08 of the Revised Code and shall index the certificate in the indexes provided for under section 317.18 of the Revised Code. If the lien subsequently is canceled, the cancellation also shall be recorded by the county recorder. When a loan is repaid in full, the eligible financial institution shall promptly record the full payment and cancel or otherwise release the lien. On repayment of the loan in full, the lien certificate shall be null and void.