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Treasurer's office and sponsor outline SB300 changes to custodial fund rules, reporting and fees
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Summary
Sponsor and Treasurer's Office staff told the Finance Committee SB300 modernizes portions of the Ohio Revised Code to clarify custodial funds, simplify reporting, allow education fee structures for local treasurers, and standardize treatment of pension custodial accounts; a substitute bill was adopted as the working document.
Senator Rogner and representatives of the State Treasurer's office told the Senate Finance Committee that Senate Bill 300 would modernize numerous sections of the Ohio Revised Code governing how the Treasurer's office handles deposits, custodial funds and related administrative functions.
Senator Rogner described the bill as a mixture of technical fixes and substantial clarifications, including that custodial funds are not public money for purposes of certain deposit rules, clarifying that custody does not equal ownership, and authorizing custodial funds to be held with qualified custodians designated by the Treasurer. She also said the bill updates fee administration and continuing education provisions and streamlines audit reporting by replacing triplicate written certificates with direct electronic reporting to the Treasurer, Auditor and Governor.
Zach Prouty, deputy chief of staff for the Treasurer's Office, provided operational context and large‑scale figures for fiscal year 2025 to illustrate the office's scope: the office deposited about $95.5 billion in the state treasury, actively managed roughly $50 billion in investment portfolios, oversaw an $8.8 billion debt portfolio, and served as custodian for about $288 billion in assets (most of which are pension funds). Prouty said the bill amends nearly 40 code sections to align statute with current practice and to give the Treasurer more flexibility for contracting custodial services and investment‑related custodial arrangements.
Prouty and the sponsor addressed a committee question about STRS (State Teachers Retirement System) accounts and why STRS holdings are treated differently: Prouty said STRS holds commercial properties that generate rent through separate bank accounts and that the bill will include an amendment to standardize treatment across all five pension funds so custodial roles are clearer and so operational language is consistent. "So it's really just giving them the independence and flexibility back to the fund," Prouty said, adding that the change would remove the Treasurer's office from day‑to‑day investment management of those funds.
Before testimony, Vice Chair Chavez moved to adopt substitute bill 1652‑1 as the working document on the sponsor's request; the chair asked for objections and, seeing none, declared the substitute the working document going forward. The committee received proponent testimony from the Treasurer's office and concluded the first hearing on SB300 without a committee vote on final passage.
The sponsor and Treasurer's Office indicated additional amendments are expected to address pension custodial language. Committee staff and members requested clarifications about specific custodial holdings and operational details as the bill moves forward.
