Ohio Revised Code
Chapter 135 | Uniform Depository Act
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.

Structure Ohio Revised Code

Ohio Revised Code

Title 1 | State Government

Chapter 135 | Uniform Depository Act

Section 135.01 | Uniform Depository Act Definitions.

Section 135.02 | State Board of Deposit.

Section 135.03 | Institutions Eligible as Public Depositories.

Section 135.032 | Disqualification as Depository.

Section 135.04 | Eligibility for State Deposits - Warrant Clearance Accounts.

Section 135.05 | Estimate of Inactive Deposits.

Section 135.06 | Application for Inactive Deposits.

Section 135.07 | Award of Inactive Deposits.

Section 135.08 | Application for Interim Deposits.

Section 135.09 | Award of Interim Deposits.

Section 135.10 | Application for Active Deposits.

Section 135.101 | Savenow Program Definitions.

Section 135.102 | Purpose of Savenow Program.

Section 135.103 | Investment in Savenow Linked Deposits.

Section 135.104 | Resident Participation in Savenow Program.

Section 135.105 | Offer of Savenow Accounts to Residents.

Section 135.106 | Immunity of State - Effect of Misconduct on Deposit Agreement.

Section 135.11 | Exemption From Prohibition Against Interest in Contract.

Section 135.12 | Designating Depositories Biennially.

Section 135.13 | Evidence of Inactive and Interim Deposits.

Section 135.14 | Investing Interim Moneys of Public Subdivisions.

Section 135.141 | Municipal Corporation May Invest Interim Moneys in Linked Deposits.

Section 135.142 | Board of Education Investment of Interim Moneys.

Section 135.143 | Investment Authority for State Interim Funds.

Section 135.144 | Investment of Interim Moneys in Federally Insured Certificates of Deposit.

Section 135.145 | Redeposit of Interim Moneys Moneys.

Section 135.15 | Transferring Funds From One Classification to Another.

Section 135.16 | Payment of Interest.

Section 135.17 | Cash Reserve.

Section 135.18 | Security for Repayment of Public Moneys.

Section 135.181 | Optional Pledging Requirements.

Section 135.182 | Ohio Pooled Collateral Program.

Section 135.19 | Failure of Public Depository.

Section 135.20 | Proportion of Deposits in Various Banks Subject to Reasonable Variation.

Section 135.21 | Investment Earnings Apportionment and Crediting.

Section 135.22 | Annual Continuing Education Programs for Treasurers.

Section 135.31 | County Depository Definitions.

Section 135.32 | Institutions Eligible as County Public Depositories.

Section 135.321 | Disqualification as County Depository.

Section 135.33 | Designating County Depositories Every Four Years.

Section 135.34 | Review of Investment Procedures Semiannually.

Section 135.341 | County Investment Advisory Committee.

Section 135.35 | County Inactive Moneys.

Section 135.351 | Crediting Interest.

Section 135.352 | County Library and Local Government Support Fund.

Section 135.353 | County May Invest Inactive Moneys in Linked Deposits.

Section 135.354 | Redeposit of Inactive Moneys.

Section 135.36 | Transferring County Funds From One Classification to Another.

Section 135.37 | Security for Repayment of County Public Moneys.

Section 135.38 | Exemption of County Officials From Prohibition Against Interest in Contract.

Section 135.39 | Exemption of County Officials From Liability.

Section 135.40 | County Cash Reserve.

Section 135.45 | State Treasurer's Investment Pool.

Section 135.451 | Investments of History Connection and Capitol Square Review and Advisory Board.

Section 135.46 | Investment Pools for Temporary Investment of Bond Proceeds.

Section 135.47 | Securities Lending Program - Fund.

Section 135.48 | Adoption of Rules.

Section 135.51 | Bank Defaulting as Public Depository; Retention and Disposition of Securities.

Section 135.52 | Bonds May Be Used in Anticipation of Collections - Maturity - Limitation - Distribution of Proceeds From Sale.

Section 135.53 | Surplus Assigned and Delivered to Defaulting Bank or Building and Loan Association.

Section 135.54 | Possession and Control of Securities Vested in Authorized Agent - Powers.

Section 135.61 | Linked Deposit Program Definitions.

Section 135.62 | Purpose of Linked Deposit Program.

Section 135.63 | Investing in Linked Deposit Programs.

Section 135.64 | Review of Loan Applications.

Section 135.65 | Accepting or Rejecting Loan Package.

Section 135.66 | Loan Rate - Monitoring Compliance.

Section 135.67 | Liability of State and State Treasurer.

Section 135.68 | Short-Term Installment Loan Linked Deposit Definitions.

Section 135.69 | Short-Term Installment Loan Linked Deposit Program.

Section 135.70 | Acceptance of Loan Package - Certificates of Deposit.

Section 135.71 | Agricultural Linked Deposit Definitions.

Section 135.72 | Purpose of Agricultural Linked Deposit Program.

Section 135.73 | Review of Loan Applications.

Section 135.74 | Accepting or Rejecting Loan Package.

Section 135.75 | Lending of Funds; Monitoring Compliance.

Section 135.76 | Liability of State and State Treasurer.

Section 135.77 | Definitions Regarding Business Linked Deposit Program.

Section 135.771 | Statement of Policy.

Section 135.772 | Participation by Lending Institutions.

Section 135.773 | Acceptance or Rejection by Treasurer of State.

Section 135.774 | Loan Rates; Implementation; Liability.

Section 135.78 | Adoption of Rules; Payment of Interest.

Section 135.79 | Adoption Linked Deposit Program-Definitions.

Section 135.791 | Legislative Findings and Intent.

Section 135.792 | Loan Applications and Packages.

Section 135.793 | Loan Package Review and Deposit Agreements.

Section 135.794 | Loan Execution and Treasurer's Oversight.

Section 135.795 | Rules.

Section 135.796 | State Protected From Default.

Section 135.80 | Municipal, Port or Lake Facilities Authority, and County Linked Deposit Program.

Section 135.801 | Adopting Resolution Implementing Residential Facility Linked Deposit Program.

Section 135.802 | Contents of Resolution Implementing Residential Facility Linked Deposit Program.

Section 135.803 | Certifying Availability of Public Moneys.

Section 135.804 | Property Tax Payment Linked Deposit Programs Definitions.

Section 135.805 | Property Tax Payment Linked Deposit Programs.

Section 135.806 | Duties of Lending Institution on Receipt of Rc 135.805 Certificate.

Section 135.807 | Delivery of Lien Certificate to Eligible Lending Institution.

Section 135.81 | Housing Linked Deposit Program Definitions.

Section 135.82 | Purpose of Housing Linked Deposit Program.

Section 135.83 | Applying for Formation of Partnership With Treasurer of State.

Section 135.84 | Accepting or Rejecting Application.

Section 135.85 | Lending Institution - Duties Upon Placement of Housing Linked Deposit.

Section 135.86 | Monitoring Compliance.

Section 135.87 | Liability of State and State Treasurer.

Section 135.91 | Assistive Technology Device Linked Deposit Definitions.

Section 135.92 | Deposit Agreements.

Section 135.93 | Review of Loan Applications.

Section 135.94 | Loan Rate.

Section 135.95 | Accepting or Rejecting Loan Package.

Section 135.96 | Implementing Program.

Section 135.97 | Immunity.