(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.

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(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.