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Substitute for HOUSE BILL No. 2152
AN A CT concerning public moneys; relating to the deposit and investment thereof;
mandating banks, savings and loan associations and savings banks to secure
governmental unit deposits in excess of the amount insured or guaranteed by the
federal deposit insurance corporation by utilizing the public moneys pooled method;
directing the state treasurer to establish procedures therefor; requiring financial
institutions to make certain reports upon the request of a governmental unit;
prohibiting investment advisers that execute bids for the investment of public moneys
from engaging in a principal transaction with a governmental unit directly related to
such public moneys; allowing governmental unit deposits to be invested in a financial
institution at a rate agreed upon by the governmental unit and the financial
institution; requiring certification from governmental units that deposits in the
municipal investment pool fund were first offered to a bank, savings and loan
association or savings bank in the preceding year; allowing eligible financial
institutions to file a complaint with the state treasurer upon the failure of a
governmental unit to comply with certain requirements; establishing the investment
rate for the pooled money investment board bank certificate of deposit program;
amending K.S.A. 9-1402, 12-1675, 12-1677a and 12-1677b and K.S.A. 2024 Supp.
75-4237 and repealing the existing sections.
Be it enacted by the Legislature of the State of Kansas:
New Section 1. (a) For purposes of sections 1 through 3, and
amendments thereto:
(1) "Administrator" means the treasurer or the treasurer's designee.
(2) "Governmental unit" means the state or any county,
municipality or other political subdivision thereof.
(3) "Public moneys" means the same as defined in K.S.A. 9-701,
and amendments thereto.
(4) "Public moneys pooled method" or "pool of securities" means
shares of investment companies registered under the federal investment
company act of 1940 when the investment companies' assets are limited
to obligations that are eligible for investment by the bank, savings and
loan association or savings bank and limited by their prospectuses to
owning securities enumerated in K.S.A. 9-1402(c), and amendments
thereto.
(5) "Treasurer" means the state treasurer.
(b) A bank, savings and loan association or savings bank
designated as a public depositary shall secure the deposit of public
moneys in excess of the amount insured or guaranteed by the federal
deposit insurance corporation pursuant to K.S.A. 9-1402 and 12-1675,
and amendments thereto, by the public moneys pooled method. A bank,
savings and loan association or savings bank designated as a public
depositary shall secure the deposits of one or more governmental units
by depositing, pledging or granting a security interest in a pool of
securities to secure the repayment of all public moneys deposited in
such bank, savings and loan association or savings bank by such
governmental units and not otherwise secured pursuant to law, if at all
times the aggregate market value on such pool of securities so
deposited, pledged or in which a security interest is granted is equal to
at least 102% of the amount on deposit that is in excess of the amount
so insured or guaranteed. Each such bank, savings and loan association
or savings bank shall carry on such bank's or association's accounting
records a general ledger or other appropriate accounting of the total
amount of all public moneys to be secured by the pool of securities as
determined at the opening of each business day and the aggregate
market value of the pool of securities deposited, pledged or in which a
security interest is granted to secure such public moneys.
(c) The treasurer may serve as the administrator with respect to a
public moneys pooled method or may designate a bank, savings and
loan association, savings bank, trust company or other qualified firm,
corporation or association that is authorized to transact business in this
state to serve as the administrator. The administrator shall not accept
public deposits from a governmental unit while administering the
public moneys pooled method pursuant to this section. The
administrator shall submit a formal conflict of interest document in a
manner prescribed by the treasurer. Expenses of such administrator
shall be paid by the office of the state treasurer.
(d) The administrator shall be tasked with assessing and managing
the sufficiency of the public moneys pooled method, including, but not
Sub for HOUSE BILL No. 2152—page 2
limited to, the compliance by a bank, savings and loan association or
savings bank that the aggregate market value of the pool of securities of
such bank, savings and loan association or savings bank is an amount
of not less than 102% of the total amount of public moneys or public
funds less the portion of such public moneys or funds insured or
guaranteed by the federal deposit insurance corporation and pursuant to
K.S.A. 9-1402 and 12-1675, and amendments thereto. To fulfill the
duties of sections 1 through 3, and amendments thereto, the treasurer
may adopt rules and regulations to administer and implement the
provisions of sections 1 through 3, and amendments thereto, including,
but not limited to, rules and regulations to assess and manage the
sufficiency of the public moneys pooled method.
(e) A bank, savings and loan association or savings bank in which
public moneys or public funds are deposited may at any time substitute,
exchange or release securities deposited if such substitution, exchange
or release does not reduce the aggregate market value of the pool of
securities to an amount that is less than 102% of the total amount of
public moneys or public funds less the portion of such public moneys
or funds insured or guaranteed by the federal deposit insurance
corporation and pursuant to K.S.A. 9-1402 and 12-1675, and
amendments thereto. Such bank, savings and loan association or
savings bank shall notify the administrator if additional collateral is
required to be pledged due to an increase in deposits placed by the
governmental unit. Such bank, savings and loan association or savings
bank shall notify the administrator if such bank, savings and loan
association or savings bank desires to release collateral due to a
reduction in governmental unit deposits.
(f) Each bank, savings and loan association or savings bank that
satisfies its requirement to secure the deposit of public moneys or
public funds in excess of the amount insured or guaranteed by the
federal deposit insurance corporation by depositing, pledging or
granting a security interest in a single pool of securities, or any
combination thereof, shall, on or before the 10 th day of each month,
render to the administrator a statement showing as of the last business
day of the previous month the:
(1) Amount of public moneys or public funds deposited in such
bank, savings and loan association or savings bank that is not insured
or guaranteed by the federal deposit insurance corporation by:
(A) Each governmental unit separately; and
(B) all governmental units in the aggregate;
(2) aggregate market value of the pool of securities; and
(3) name, phone number and email address of a representative of
each governmental unit represented in the pool.
(g) Not later than 20 days after the deadline for receiving the
statement required under subsection (f), the administrator shall provide
a report to each governmental unit listed in such statement reflecting:
(1) The amount of public moneys or public funds deposited in
such bank, savings and loan association or savings bank by each
governmental unit as of the last business day of the previous month that
is not insured or guaranteed by the federal deposit insurance
corporation and that is secured pursuant to K.S.A. 9-1402 and 12-1675,
and amendments thereto; and
(2) the aggregate market value of the pool of securities deposited
as of the last business day of the previous month.
Such report shall clearly notify the governmental unit if the value of
the securities did not meet the statutory requirement.
(h) If the administrator at any time determines that the value of the
securities does not meet the statutory requirement, the administrator
shall send notice to the bank, savings and loan association or savings
bank allowing such bank, savings and loan association or savings bank
up to five business days to adjust the securities to meet the statutory
requirement. If such bank, savings and loan association or savings bank
does not meet the statutory requirement within the required timeframe,
such bank, savings and loan association or savings bank shall be
Sub for HOUSE BILL No. 2152—page 3
subject to a fine and potential sanctions issued by the administrator
pursuant to rules and regulations adopted by the treasurer.
(i) The public moneys pooled method shall not be utilized by any
bank, savings and loan association or savings bank unless the treasurer
establishes a public moneys pooled method in accordance with this
section or designates an administrator pursuant to subsection (c).
(j) This section shall take effect on and after January 1, 2026.
New Sec. 2. (a) When the administrator determines that a bank,
savings and loan association or savings bank has experienced a default,
the administrator shall:
(1) Ascertain the aggregate amounts of public moneys secured
pursuant to K.S.A. 9-1402 and 12-1675, and amendments thereto, and
deposited in the defaulting bank, savings and loan association or
savings bank , as disclosed by the records of such bank, savings and
loan association or savings bank. The administrator shall determine for
each governmental unit for which public moneys are deposited in the
defaulting bank, savings and loan association or savings bank the
accounts and amount of federal deposit insurance or guarantee that is
available for each account. The administrator shall then determine for
each such governmental unit the amount of public moneys not insured
or guaranteed by the federal deposit insurance corporation and the
amount of public moneys secured by a pool of securities pledged. Upon
completion of such determination, the administrator shall provide each
such governmental unit with a statement that reports the amount of
public moneys deposited by such governmental unit in the defaulting
bank, savings and loan association or savings bank, the amount of
public moneys that may be insured or guaranteed by the federal deposit
insurance corporation and the amount of public moneys secured by a
pool of securities, or any combination thereof, pursuant to K.S.A. 9-
1402 and 12- 1675, and amendments thereto. Each such governmental
unit shall verify the information in such report with such governmental
unit's records within 10 business days after receiving the report and
information from the administrator; and
(2) shall repay each governmental unit for the public moneys not
insured or guaranteed by the federal deposit insurance corporation
deposited in the defaulting bank, savings and loan association or
savings bank by the governmental unit upon receipt of a verified report
from such governmental unit. The administrator may liquidate the
securities pledged for immediate distribution if the defaulting bank,
savings and loan association or savings bank is to be liquidated or if,
for any other reason, the administrator determines that public moneys
are not likely to be promptly paid upon demand. In the event that the
amount of the deposit guaranty bond or the proceeds of the securities
held by the administrator after liquidation is insufficient to cover all
public moneys not insured or guaranteed by the federal deposit
insurance corporation for all governmental units served by the
administrator, the administrator shall pay out to each governmental unit
available amounts pro rata in accordance with the respective public
moneys not insured or guaranteed by the federal deposit insurance
corporation for each such governmental unit.
(b) Any liquidation occurring under the provisions of this section
shall conform to the procedures established in this section. In the event
that a federal deposit insurance agency is appointed and acts as a
liquidator or receiver of any bank, savings and loan association or
savings bank under state or federal law, the duties under this section
that are specified to be performed by the administrator in the event of
default may be delegated to and performed by such federal deposit
insurance agency.
(c) This section shall take effect on and after January 1, 2026.
New Sec. 3. (a) A bank, savings and loan association or savings
bank, upon the request of a governmental unit, shall report as of the
date of such request the amount of public moneys deposited in such
bank, savings and loan association or savings bank that is not insured
or guaranteed by the federal deposit insurance corporation by:
Sub for HOUSE BILL No. 2152—page 4
(1) The governmental unit making the request; and
(2) the total amount for all other governmental units secured
pursuant to K.S.A. 9-1402 and 12-1675, and amendments thereto, and
the aggregate market value of the pool of securities deposited, pledged
or in which a security interest has been granted to secure public moneys
held by the bank, savings and loan association or savings bank,
including those public moneys deposited by the governmental unit.
Such report shall be made on or before the date that the
governmental unit specifies.
(b) The administrator , upon the request of a governmental unit,
shall report as of the date of such request the aggregate market value of
the pool of securities deposited, pledged or in which a security interest
has been granted by the bank, savings and loan association or savings
bank and provide an itemized list of the securities in such pool. The
governmental unit shall specify the date on which such report shall be
made by such qualified trustee.
(c) This section shall take effect on and after January 1, 2026.
New Sec. 4. (a) An investment adviser that executes bids for the
investment of public moneys on behalf of a governmental unit shall not
be permitted to engage in a principal transaction with the governmental
unit that is the same or directly related to the issue of securities or
financial product for which the investment adviser is providing or has
provided advice. Nothing in this section shall prevent governmental
units from engaging with a federally registered investment adviser.
(b) For purposes of this section:
(1) "Governmental unit" means the state or any county,
municipality or other political subdivision thereof; and
(2) "investment adviser" means the same as defined in K.S.A. 17-
12a102, and amendments thereto.
New Sec. 5. (a) If a bank, savings and loan association or savings
bank has a good faith reason to believe that a governmental unit has not
acted in compliance with K.S.A. 12-1675, 12-1677a or 12-1677b, and
amendments thereto, the eligible financial institution may file a
complaint with the state treasurer in writing and signed by an executive
officer of the eligible financial institution. The complaint shall be
submitted in the form prescribed by the state treasurer.
(b) Each filed complaint shall be confidential, not subject to the
open records act, K.S.A. 45-215 et seq., and amendments thereto, and
not be disclosed except as provided in this section. The provisions of
this subsection shall expire on July 1, 2030, unless the legislature
reviews and acts to continue such provisions pursuant to K.S.A. 45-
229, and amendments thereto, prior to July 1, 2030.
(c) If the state treasurer determines that such verified complaint
does allege facts, directly or upon information and belief, sufficient to
constitute a violation of the provisions of K.S.A. 12-1675, 12-1677a or
12-1677b, and amendments thereto, the state treasurer shall promptly
investigate the alleged violation.
(d) If, after the investigation, the state treasurer finds that probable
cause does not exist to believe the allegations of the complaint, the state
treasurer shall dismiss the complaint. If, after such preliminary
investigation, the state treasurer finds that probable cause exists to
believe the allegations of the complaint, such complaint shall no longer
be confidential and may be disclosed. Upon making any such finding,
the state treasurer shall fix a time for a hearing on the matter, which
shall be not more than 30 days after such finding. In either event the
state treasurer shall notify the complainant and the respondent of the
state treasurer's determination.
(e) The state treasurer shall notify the attorney general and the
pooled money investment board of any apparent violation of law that is
discovered during the course of any such investigation.
(f) Any governmental entity that knowingly violates the
provisions of K.S.A. 12-1675, 12-1677a or 12-1677b, and amendments
thereto, for a first violation shall be required to complete a training
approved by the state treasurer concerning the requirements of K.S.A.
Sub for HOUSE BILL No. 2152—page 5
12-1675, 12-1677a or 12-1677b, and amendments thereto. For a second
and each succeeding violation, the governmental entity shall be liable
for the payment of a civil penalty in an action brought by the attorney
general, in a sum set by the court of not to exceed $500 for each
violation. Any civil penalty sued for and recovered hereunder by the
attorney general shall be paid into the attorney general's open
government fund.
Sec. 6. K.S.A. 9-1402 is hereby amended to read as follows: 9-
1402. (a) Before any deposit of public moneys or funds shall be made
by any municipal corporation or quasi-municipal corporation
governmental unit of the state of Kansas with any bank, savings and
loan association or savings bank, such municipal or quasi-municipal
corporation governmental unit shall obtain security for such deposit in
one of the following manners prescribed by this section.
(b) Such bank, savings and loan association or savings bank may
give a corporate surety bond of some surety corporation authorized to
do business in this state, which. Such bond shall be in an amount equal
to the public moneys or funds on deposit at any given time less the
amount of such public moneys or funds which that is insured by the
federal deposit insurance corporation or its successor and such bond
shall be conditioned that such deposit shall be paid promptly on the
order of the municipal corporation or quasi-municipal corporation
governmental unit making such deposits.
(c) Such bank, savings and loan association or savings bank may
deposit, maintain, pledge, assign and grant a security interest in, or
cause its agent, trustee, wholly owned subsidiary or affiliate having
identical ownership to deposit, maintain, pledge, assign and grant a
security interest in, for the benefit of the governing body of the
municipal corporation or quasi-municipal corporation governmental
unit in the manner provided in this section, securities, security
entitlements, financial assets and securities accounts owned by the
depository institution directly or indirectly through the institution's
agent or trustee holding securities on the institution's behalf, or owned
by the depository institutions wholly owned subsidiary or by such
affiliate, the market value of which is equal to 100% of the total
deposits at any given time, and such securities, security entitlements,
financial assets and securities accounts, may be accepted or rejected by
the governing body of the municipal corporation or quasi-municipal
corporation governmental unit and shall consist of the following and
security entitlements thereto:
(1) Direct obligations of, or obligations that are insured as to
principal and interest by, the United States of America or any agency
thereof and obligations, including, but not limited to, letters of credit
and securities of United States sponsored States-sponsored corporations
which that under federal law may be accepted as security for public
funds;
(2) bonds of any municipal corporation or quasi-municipal
corporation governmental unit of the state of Kansas which that have
been refunded in advance of the bonds' maturity and are fully secured
as to payment of principal and interest thereon by deposit in trust, under
escrow agreement with a bank, of direct obligations of, or obligations
the principal of and the interest on which are unconditionally
guaranteed by, the United States of America;
(3) bonds of the state of Kansas;
(4) general obligation bonds of any municipal corporation or
quasi-municipal corporation governmental unit of the state of Kansas;
(5) revenue bonds of any municipal corporation or quasi-
municipal corporation governmental unit of the state of Kansas if
approved by the commissioner;
(6) temporary notes of any municipal corporation or quasi-
municipal corporation governmental unit of the state of Kansas which
that are general obligations of the municipal or quasi-municipal
corporation governmental unit issuing the same such temporary notes;
(7) warrants of any municipal corporation or quasi-municipal
Sub for HOUSE BILL No. 2152—page 6
corporation governmental unit of the state of Kansas the issuance of
which is authorized by the state board of tax appeals and which that are
payable from the proceeds of a mandatory tax levy;
(8) bonds of either a Kansas not-for-profit corporation or of a local
housing authority that are rated at least Aa by Moody's investors
service or AA by Standard & Poor's corp.;
(9) bonds issued pursuant to K.S.A. 12-1740 et seq., and
amendments thereto, that are rated at least MIG-1 or Aa by Moody's
investors service or AA by Standard & Poor's corp.;
(10) notes of a Kansas not-for-profit corporation that are issued to
provide only the interim funds for a mortgage loan that is insured by
the federal housing administration;
(11) bonds issued pursuant to K.S.A. 74-8901 through 74-8916,
and amendments thereto;
(12) bonds issued pursuant to K.S.A. 68-2319 through 68-2330,
and amendments thereto;
(13) commercial paper that does not exceed 270 days to maturity
and which has received one of the two highest commercial paper credit
ratings by a nationally recognized investment rating firm; or
(14) (A) negotiable promissory notes together with first lien
mortgages on one to four family residential real estate located in
Kansas securing payment of such notes when such notes or mortgages:
(i) Are underwritten by the federal national mortgage association,
the federal home loan mortgage corporation, the federal housing
administration or the veterans administration standards;
(ii) have been in existence with the same borrower for at least two
years and with no history of any installment being unpaid for 30 days
or more; and
(iii) are valued at not to exceed 50% of the lesser of the following
three values: Outstanding mortgage balance, current appraised value of
the real estate or discounted present value based upon current federal
national mortgage association or government national mortgage
association interest rates quoted for conventional, federal housing
administration or veterans administration mortgage loans.
(B) Securities under paragraph subparagraph (A) shall be taken at
their value for not more than 50% of the security required under the
provisions of this section.
(C) Securities under paragraph subparagraph (A) shall be
withdrawn immediately from the collateral pool if any installment is
unpaid for 30 days or more.
(D) A status report on all such loans shall be provided to the
investing governmental entity by the financial institution on a quarterly
basis.
(d) Such bank, savings and loan association or savings bank shall
secure the deposit of public moneys of one or more governmental units
through the public moneys pooled method pursuant to section 1, and
amendments thereto, for the benefit of the governmental unit having
public moneys with such bank, savings and loan association or savings
bank as provided in section 1, and amendments thereto.
(e) No such bank, savings and loan association or savings bank
may deposit and maintain for the benefit of the governing body of a
municipal or quasi-municipal corporation governmental unit of the
state of Kansas, any securities which that consist of:
(1) Bonds secured by revenues of a utility which that has been in
operation for less than three years; or
(2) bonds issued under K.S.A. 12-1740 et seq., and amendments
thereto, unless such bonds have been refunded in advance of their
maturity as provided in subsection (d) (c) or such bonds are rated at
least Aa by Moody's investors service or AA by Standard & Poor's
corp.
(e)(f) Any applicant requesting approval of a revenue bond
pursuant to subsection (c)(5) shall pay to the commissioner a fee in an
amount established pursuant to K.S.A. 9-1726, and amendments
thereto, to defray the expenses of the commissioner in the examination
Sub for HOUSE BILL No. 2152—page 7
and investigation of the application. The commissioner shall remit all
amounts received under this section to the state treasurer in accordance
with the provisions of K.S.A. 75-4215, and amendments thereto. Upon
receipt of each such remittance, the state treasurer shall deposit the
entire amount in the state treasury to the credit of the bank investigation
fund. The moneys in the bank investigation fund shall be used to pay
the expenses of the commissioner in the examination and investigation
of such applications and any unused balance shall be transferred to the
bank commissioner fee fund.
(g) For purposes of this section, "governmental unit" means the
state or any county, municipality or other political subdivision of the
state.
Sec. 7. K.S.A. 12-1675 is hereby amended to read as follows: 12-
1675. (a) The governing body of any county, city, township, school
district, area vocational-technical school, community college, firemen's
relief association, community mental health center, community facility
for people with intellectual disability or any other governmental entity,
unit or subdivision in the state of Kansas having authority to receive,
hold and expend public moneys or funds may invest any moneys which
that are not immediately required for the purposes for which the
moneys were collected or received, and the investment of which is not
subject to or regulated by any other statute.
(b) Such moneys shall be invested only:
(1) In temporary notes or no-fund warrants issued by such
investing governmental unit;
(2) in savings deposits, demand deposits, time deposit, open
accounts, certificates of deposit or time certificates of deposit with
maturities of not more than two years:
(A) In banks, savings and loan associations and savings banks ,
which that have main or branch offices located in such investing
governmental unit; or
(B) if no main or branch office of a bank, savings and loan
association or savings bank is located in such investing governmental
unit, then in banks, savings and loan associations and savings banks ,
which that have main or branch offices in the county or counties in
which all or part of such investing governmental unit is located.
(C) In selecting a bank, savings and loan association or savings
bank pursuant to subparagraphs (A) and (B), the investing
governmental unit may accept any rate agreed upon by the
governmental unit and the eligible bank, savings and loan association
or savings bank. If a bank, savings and loan association or savings
bank eligible for an investment deposit pursuant to subparagraphs (A)
and (B) will make such deposits available to the investing
governmental unit at interest rates equal to or greater than the
investment rate, as defined in K.S.A. 12-1675a(g), and amendments
thereto, the investing governmental unit shall select one or more of
such eligible banks, savings and loan associations or savings banks;
(3) in repurchase agreements with:
(A) Banks, savings and loan associations and savings banks,
which that have main or branch offices located in such investing
governmental unit, for direct obligations of, or obligations that are
insured as to principal and interest by, the United States government or
any agency thereof; or
(B) (i) if no main or branch office of a bank, savings and loan
association or savings bank, is located in such investing governmental
unit; or
(ii) if no such bank, savings and loan association or savings bank
having a main or branch office located in such investing governmental
unit is willing to enter into such an agreement with the investing
governmental unit at an interest rate equal to or greater than the
investment rate, as defined in subsection (g) of K.S.A. 12-1675a (g),
and amendments thereto, then such repurchase agreements may be
entered into with banks, savings and loan associations or savings banks
which that have main or branch offices in the county or counties in
Sub for HOUSE BILL No. 2152—page 8
which all or part of such investing governmental unit is located; or
(C) if no bank, savings and loan association or savings bank,
having a main or branch office in such county or counties is willing to
enter into such an agreement with the investing governmental unit at an
interest rate equal to or greater than the investment rate, as defined in
subsection (g) of K.S.A. 12-1675a (g), and amendments thereto, then
such repurchase agreements may be entered into with banks, savings
and loan associations or savings banks located within this state.
(D) In selecting a bank, savings and loan association or savings
bank pursuant subparagraphs (A), (B) and (C), the governmental unit
may accept any rate agreed upon by the governmental unit and the
eligible bank, savings and loan association or savings bank;
(4) in direct obligations of or obligations that are insured as to
principal and interest by the United States or any agency thereof, not
including mortgage-backed securities with maturities as the governing
body shall determine, but not exceeding two years. Such investment
transactions shall only be conducted with:
(A) Banks, savings and loan associations and savings banks;
(B) the federal reserve bank of Kansas City, Missouri; or with
(C) primary government securities dealers which that report to the
market report division of the federal reserve bank of New York, or any
broker-dealer engaged in the business of selling government securities
which that is registered in compliance with the requirements of section
15 or 15C of the securities exchange act of 1934 and registered
pursuant to K.S.A. 17-12a401, and amendments thereto;
(5) in the municipal investment pool fund established in K.S.A.
12-1677a, and amendments thereto;
(6) in the investments authorized and in accordance with the
conditions prescribed in K.S.A. 12-1677b, and amendments thereto;
(7) in multiple municipal client investment pools managed by the
trust departments of banks which that have main or branch offices
located in the county or counties where such investing governmental
unit is located or with trust companies incorporated under the laws of
this state which that have contracted to provide trust services under the
provisions of K.S.A. 9-2107, and amendments thereto, with banks
which that have main or branch offices located in the county or
counties in which such investing governmental unit is located. Public
moneys invested under this paragraph shall be secured in the same
manner as provided for under K.S.A. 9-1402, and amendments thereto.
Pooled investments of public moneys made by trust departments under
this paragraph shall be subject to the same terms, conditions and
limitations as are applicable to the municipal investment pool
established by K.S.A. 12-1677a, and amendments thereto; or
(8) municipal bonds or other obligations issued by any
municipality of the state of Kansas as defined in K.S.A. 10-1101, and
amendments thereto, which that are general obligations of the
municipality issuing the same.
(c) The investments authorized in paragraphs (4), (5), (6), (7) or
(8) of subsection (b) (4), (5), (6), (7) or (8) shall be utilized only if the
banks, savings and loan associations and savings banks eligible for
investments authorized in paragraph (2) of subsection (b)(2), cannot or
will not make the investments authorized in paragraph (2) of subsection
(b)(2) available to the investing governmental unit at interest rates
equal to or greater than the investment rate, as defined in subsection (g)
of K.S.A. 12-1675a(g), and amendments thereto.
(d) In selecting a depository pursuant to paragraph (2) of
subsection (b), if a bank, savings and loan association or savings bank
eligible for an investment deposit thereunder has an office located in
the investing governmental unit and such financial institution will make
such deposits available to the investing governmental unit at interest
rates equal to or greater than the investment rate, as defined in
subsection (g) of K.S.A. 12- 1675a, and amendments thereto, and such
financial institution otherwise qualifies for such deposit, the investing
governmental unit shall select one or more of such eligible financial
Sub for HOUSE BILL No. 2152—page 9
institutions for deposit of funds pursuant to this section. If no such
financial institution qualifies for such deposits, the investing
governmental unit may select for such deposits one or more eligible
banks, savings and loan associations or savings banks which have
offices in the county or counties in which all or a part of such investing
governmental unit is located which will make such deposits available to
the investing governmental unit at interest rates equal to or greater than
the investment rate, as defined in subsection (g) of K.S.A. 12-1675a,
and amendments thereto, and which otherwise qualify for such
deposits.
(e)(d) (1) All security purchases and repurchase agreements shall
occur on a delivery versus payment basis.
(2) All securities, including those acquired by repurchase
agreements, shall be perfected in the name of the investing
governmental unit and shall be delivered to the purchaser or a third-
party custodian, which may be the state treasurer.
(f)(e) Public moneys deposited pursuant to subsection (b)(2) of
K.S.A. 12-1675, and amendments thereto, by the governing body of
any governmental unit listed in subsection (a) of K.S.A. 12-1675, and
amendments thereto, through a selected bank, savings and loan
association or savings bank which that is part of a reciprocal deposit
program in which the bank, savings and loan association or savings
bank:
(1) Receives reciprocal deposits from other participating
institutions located in the United States in an amount equal to the
amount of funds deposited by the municipal corporation or quasi-
municipal corporation investing governmental unit; and
(2) for which the total cumulative amount of each deposit does not
exceed the maximum deposit insurance amount for one depositor at one
financial institution as determined by the federal deposit insurance
corporation.
Such deposits shall not be treated as securities and need not be
secured as provided in this or any other act statute.
(f) Public moneys deposited pursuant to subsection (b)(2) by the
governing body of any investing governmental unit specified in
subsection (a) through a selected bank, savings and loan association or
savings bank shall be secured by the public moneys pooled method
pursuant to section 1, and amendments thereto, for the benefit of such
investing governmental unit having public moneys with such bank,
savings and loan association or savings bank as provided in section 1,
and amendments thereto.
(g) In selecting a depository institution pursuant to subsection (b)
(2), an investing governmental unit shall allow an eligible financial
institution two business days to respond to the bid.
Sec. 8. K.S.A. 12-1677a is hereby amended to read as follows: 12-
1677a. (a) Moneys deposited by any municipality with the state
treasurer for investment authorized in paragraph (5) of subsection (b) of
K.S.A. 12- 1675(b)(5), and amendments thereto, shall be deposited in
the municipal investment pool fund, which is hereby created in the state
treasury. The state treasurer shall provide the board a monthly record of
the deposits and withdrawals of municipalities. Such record may
include the amount of the deposit, the date of the deposit and such other
information as the pooled money investment board may require.
(b) The director of investments may invest and reinvest moneys in
the municipal investment pool fund in accordance with investment
policies established by the pooled money investment board under
K.S.A. 75-4232, and amendments thereto, and in accordance with
K.S.A. 75-4234 and 75-4209, and amendments thereto.
(c) The director of investments shall apportion earnings and losses
among the accounts of the depositors in the various investment options
of the municipal investment pool in accordance with policies approved
and published by the board. A statement for each municipality
participating unit account showing deposits, withdrawals, earnings and
losses distributions shall be provided monthly to the municipality. The
Sub for HOUSE BILL No. 2152—page 10
director of investments shall make comprehensive reports monthly to
those municipalities participating in the municipal investment pool
fund and to other interested parties requesting such reports. Such
reports shall include a summary of transactions for the month, the
current market value of the pooled money investment portfolio
investments, the weighted average maturity of the portfolio, the original
costs of the investments in the portfolio, including any fees associated
with such investments and such other relevant information the director
of investments may wish to include in such report.
(d) The municipal investment pool reserve fund is abolished
effective July 1, 1996, and any unencumbered balance remaining
therein shall be applied to net losses in the municipal investment pool
fund. The municipal investment pool fund fee fund is abolished on July
1, 1997, and any unencumbered balance remaining therein shall be
transferred to the pooled money investment portfolio fee fund and such
amounts shall be applied to net losses, as of July 1, 1996, in the
municipal investment pool fund.
(e) The pooled money investment board may adopt rules and
regulations necessary for the administration and operation of the
municipal investment pool fund and may enter into agreements with
any municipality as to methods of deposits, withdrawals and
investments.
(f) Deposits in the municipal investment pool fund: (1) May only
be made for the same maturity as the maturity which that is offered
under paragraph (2) of subsection (b) of K.S.A. 12-1675 (b)(2), and
amendments thereto; and (2) upon the maturity of such deposits, such
moneys shall be offered for investment under paragraph (2) of
subsection (b) of K.S.A. 12- 1675(b)(2), and amendments thereto, and
may be reinvested in such fund only if the conditions contained in
subsection (c) of K.S.A. 12-1675 (c), and amendments thereto, have
been satisfied ; and (3) shall be accompanied with a certification to
prove compliance with K.S.A. 12- 1675(c), and amendments thereto,
and a listing of the banks, savings and loan associations and savings
banks from which the governmental unit requested bids.
(g) Moneys and investments in the municipal investment pool
fund shall be managed by the pooled money investment board in
accordance with investment policies provided for in K.S.A. 75-4209,
and amendments thereto. A copy of such published policies shall be
distributed to all municipalities participating in the municipal
investment pool fund and to other interested persons requesting a copy
of such policies. The pooled money investment board shall not contract
for management of investments by a money manager.
Sec. 9. K.S.A. 12-1677b is hereby amended to read as follows: 12-
1677b. (a) The governing body of any city, county or school district
which that has a written investment policy approved by the governing
body of such city, county or school district and such written investment
policy is approved by the pooled money investment board as provided
in subsection (b) may invest and reinvest pursuant to the approved
investment policy in the following investments, as authorized under
paragraph (6) of subsection (b) of K.S.A. 12-1675 (b)(6), and
amendments thereto:
(1) Direct obligations of, or obligations that are insured as to
principal and interest by, the United States of America or any agency
thereof and obligations and securities of United States sponsored
government-sponsored enterprises which that under federal law may be
accepted as security for public funds, except that such investments shall
not be in mortgage-backed securities;
(2) interest-bearing time deposits in any banks, savings and loan
associations and savings banks; or
(3) repurchase agreements with banks, savings and loan
associations and savings banks, or with a primary government
securities dealer which that reports to the market reports division of the
federal reserve bank of New York for direct obligations of, or
obligations that are insured as to principal and interest by, the United
Sub for HOUSE BILL No. 2152—page 11
States government or any agency thereof and obligations and securities
of United States government sponsored government-sponsored
enterprises which that under federal law may be accepted as security
for public funds.
(b) In approving the investment policy of any city, county or
school district, the pooled money investment board shall require that
such policy addresses liquidity, diversification, safety of principal,
yield, maturity and quality and capability of investment management
staff. In addition, the policy shall provide procedures for compliance
with subsection (c) of K.S.A. 12-1675(c), and amendments thereto, and
a certification from the investment management staff that those
procedures have been followed.
(c) The investment policy of any city, county or school district
approved by the pooled money investment board under this section
shall be reviewed and approved at least annually by such board or when
such city, county or school district makes changes in such investment
policy. On condition of approving the investment policy, the pooled
money investment board shall review the policy to assure that it
addresses liquidity, diversification, safety of principal, yield, maturity
and quality and capability of investment management staff. In addition,
the policy shall provide procedures for compliance with subsection (c)
of K.S.A. 12-1675(c), and amendments thereto, a certification from the
investment management staff that those procedures have been followed
and:
(1) A listing of the banks, savings and loan associations and
savings banks from which the city, county or school district requested
bids in the preceding year;
(2) an annual portfolio holdings report in a form prescribed by
the pooled money investment board; and
(3) any fee or cost that the city, county or school district is paying
for investment adviser services.
(d) The pooled money investment board shall report annually to
the legislature a list of cities, counties and school districts that have
been approved under this section, including the documents provided in
subsection (c).
(e) (1) All security purchases shall occur on a delivery versus
payment basis.
(2) All securities shall be perfected in the name of the city, county
or school district and shall be delivered to the purchaser or a third party
third-party custodian, which may be the state treasurer.
(3) Investment transactions shall only be conducted with banks,
savings and loan associations and savings banks; or, with primary
government securities dealers which that report to the market report
division of the federal reserve bank of New York ;, or any broker-dealer
which that is registered in compliance with the requirements of section
15C of the securities exchange act of 1934 and registered pursuant to
K.S.A. 17-12a401, and amendments thereto.
(4) The maximum maturity for investments under subsection (a)
shall be four years.
(e)(f) Investments in securities under paragraph (1) of subsection
(a)(1) shall be limited to securities which that do not have any more
interest rate risk than do direct United States government obligations of
similar maturities. For purposes of this subsection, "interest rate risk"
means market value changes due to changes in current interest rates.
(f)(g) A city, county or school district which that violates
subsection (c) or (d) of K.S.A. 12-1675(c), and amendments thereto, or
the rules and regulations of the pooled money investment board shall
forfeit its rights under this section for a two year period and shall be
reinstated only after a complete review of its investment policy as
provided for in subsection (b). Such forfeiture shall be determined by
the pooled money investment board after notice and opportunity to be
heard in accordance with the Kansas administrative procedure act.
Sec. 10. K.S.A. 2024 Supp. 75-4237 is hereby amended to read as
follows: 75-4237. (a) The director of investments shall accept requests
Sub for HOUSE BILL No. 2152—page 12
from banks interested in obtaining investment accounts of state
moneys. Such requests may be submitted any business day and shall
specify the dollar amount and maturity. The director of investments is
authorized to award the investment account to the requesting bank at
the market investment rate established by subsection (b). Awards of
investment accounts pursuant to this section shall be subject to
investment policies of the pooled money investment board. When
multiple requests are received and are in excess of the amount available
for investment that day for any maturity, awards shall be made
available in ascending order from smallest to largest dollar amount
requested, subject to investment policies of the board. The maximum
dollar amount invested in any one bank shall not exceed 2.5% of the
bank certificate of deposit program.
(b) The investment rate shall be determined each business day by
the director of investments, in accordance with any procedures
established by the pooled money investment board, at an interest rate
that is up to 2% less than the market rate provided by this section.
(c) The market rate shall be determined each business day by the
director of investments, in accordance with any procedures established
by the pooled money investment board. Subject to any policies of the
board, the market rate shall reflect the highest rate at which state
moneys can be invested on the open market in investments authorized
by K.S.A. 75-4209(a), and amendments thereto, for equivalent
maturities.
(c)(d) (1) Notwithstanding the provisions of this section, linked
deposits made pursuant to the provisions of K.S.A. 2-3703 through 2-
3707, and amendments thereto, shall be at an interest rate that is 2%
less than the market rate determined under this section and that shall be
recalculated on the first business day of each calendar year using the
market rate then in effect.
(2) Notwithstanding the provisions of this section, agricultural
production loan deposits made pursuant to the provisions of K.S.A. 75-
4268 through 75-4274, and amendments thereto, shall be at an interest
rate that is 2% less than the market rate provided by this section and
that shall be recalculated on the first business day of each calendar year
using the market rate then in effect.
(3) Notwithstanding the provisions of this section, loan deposits
made pursuant to the city utility low-interest loan program shall be at
an interest rate that is 2% less than the market rate provided by this
section and that shall be recalculated on the first business day of each
calendar year using the market rate then in effect.
(4) Notwithstanding the provisions of this section, economic
recovery loan deposits made pursuant to the Kansas economic recovery
loan deposit program shall be at an interest rate that is 2% less than the
market rate provided by this section and that shall be recalculated on
the first business day of each calendar year using the market rate then
in effect.
(5) Notwithstanding the provisions of this section, extraordinary
utility costs loan deposits made pursuant to the Kansas extraordinary
utility costs loan deposit program shall be at an interest rate that is 2%
less than the market rate provided by this section and that shall be
recalculated on the first business day of each calendar year using the
market rate then in effect.
(d)(e) (1) The director of investments may place deposits through
a selected bank, savings and loan association or savings bank that is
part of a reciprocal deposit program in which the bank, savings and
loan association or savings bank:
(A) Receives reciprocal deposits from other participating
institutions located in the United States in an amount equal to the
amount of funds deposited by the municipal corporation or quasi-
municipal corporation; and
(B) for which the total cumulative amount of each deposit does
not exceed the maximum deposit insurance amount for one depositor at
one financial institution as determined by the federal deposit insurance
Sub for HOUSE BILL No. 2152—page 13
corporation.
(2) Such deposits shall not be treated as securities and need not be
secured as provided in this or any other act, except that such deposits
shall be secured as provided in K.S.A. 75-4218, and amendments
thereto, when they are held by the selected financial institution prior to
placement with reciprocal institutions or upon maturity.
(e)(f) The pooled money investment board shall establish
procedures for administering reciprocal deposit programs in its
investment policies, as authorized by K.S.A. 75-4232, and amendments
thereto.
Sec. 11. K.S.A. 9-1402, 12-1675, 12-1677a and 12-1677b and
K.S.A. 2024 Supp. 75-4237 are hereby repealed.
Sec. 12. This act shall take effect and be in force from and after its
publication in the statute book.
I hereby certify that the above BILL originated in the House, and passed
that body
HOUSE concurred in
SENATE amendments __________________________________________________________________
Speaker of the House.
Chief Clerk of the House.
Passed the SENATE
as amended
President of the Senate.
Secretary of the Senate.
APPROVED ______________________________________________________________________________
Governor.