Currently, county bond investments are limited to AAA or AA ratings and notes that mature within a maximum of two years. If enacted, House Bill 46 would allow county treasurers to also invest in A rated bonds and notes that mature within three years.
“The problem is that the very small number of securities available has concentrated portfolios into only a few issues, limiting the effectiveness of having corporate paper in the portfolio. House Bill 46 will provide county treasurers the authority to diversify their portfolios and increase yields on commercial paper,” said Representative Sprague.
“The bill makes a small, reasonable expansion of the investment options available to county treasurers,” said Barney Wright, Treasurer-Elect of Warren County. “It offers those treasurers who choose to use it a substantial increase in the yield on a part of their portfolio. The increased risk associated with the newly approved investments is so small it almost defies measurement.”
Proponents of House Bill 46 say the bill’s approach can increase revenue for local governments, without reforming tax codes or asking voters to pass a ballot measure.
“My conservative estimate is that this could mean an additional $100,000 to $150,000 for Montgomery County,” said Treasurer Carolyn Rice. “I wholeheartedly endorse this bill and know these proposed changes are prudent. Every additional dollar we can earn in investment income helps make a difference in our community.”
County treasurers throughout Ohio, along with their association, support House Bill 46 and feel that it will benefit local governments.
“This bill will provide county treasurers with a greater opportunity for investing,” says Hancock County Treasurer Steve Welton. “Also, our legislative committee voted to support HB 46.”
Nancy Nix, Butler County Treasurer and 2nd Vice President of the County Treasurers Association of Ohio, supports the bill, stating, “This legislation provides an additional expansion of investment options for the investment of county funds. Lengthening the final maturity of corporate obligations by one year with a minimum ratings criteria is reasonable and will provide more alternatives for consideration by county treasurers.”
House Bill 46 was passed by the Ohio House and will now be considered in the Ohio Senate.