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Session of 2025
HOUSE BILL No. 2281
By Committee on Financial Institutions and Pensions
Requested by Representative Hoheisel on behalf of the 2024 Special Committee on
Centralized Pooled Collateral and PMIB Modernization
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AN ACT concerning public moneys; establishing the Kanbucks program;
authorizing the state treasurer to invest in linked deposits with eligible
financial institutions to provide linked deposit loans to eligible
borrowers; abolishing the Kansas agricultural production loan deposit
program, the Kansas housing loan deposit program, the extraordinary
utility costs loan deposit program, the Kansas economic recovery loan
deposit program and the city utility low-interest loan program;
providing for the continuation of existing linked deposit loans;
amending K.S.A. 2024 Supp. 75-4209 and 75-4237 and repealing the
existing sections; also repealing K.S.A. 75-4268, 75-4269, 75-4270,
75-4271, 75-4272, 75-4273, 75-4274, 75-4275, 75-4276, 75-4277, 75-
4278, 75-4279, 75-4280, 75-4281 and 75-4282 and K.S.A. 2024 Supp.
75-4283, 75-4284, 75-4285, 75-4286, 75-4287, 75-4288, 75-4289, 75-
4290, 75-4291, 75-4292, 75-4293, 75-4294, 75-4295, 75-4296, 75-
4297, 75-4298, 75-4299, 75-42,100, 75-42,101 and 75-42,102.
Be it enacted by the Legislature of the State of Kansas:
New Section 1. (a) The provisions of sections 1 through 8, and
amendments thereto, shall be known and may be cited as the Kanbucks
program.
(b) The Kanbucks program shall be for the purpose of providing
incentives for the making of loans to eligible borrowers for:
(1) Agricultural production;
(2) housing and adult care home construction or development;
(3) business purposes; or
(4) extraordinary natural gas costs incurred during the extreme winter
weather event of February 2021.
New Sec. 2. For the purposes of the Kanbucks program:
(a) "Adult care home" means the same as defined in K.S.A. 39-923,
and amendments thereto.
(b) "Director of investments" means the person appointed as the
director of investments pursuant to K.S.A. 75-4222, and amendments
thereto.
(c) "Eligible borrower" means any:
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(1) Individual, limited liability agricultural company, limited
agricultural partnership or family farm corporation as defined in K.S.A.
17-5903, and amendments thereto, involved in farming;
(2) person, firm or corporation building new houses or not-for-profit
adult care homes or rehabilitating existing houses or not-for-profit adult
care homes;
(3) individual or entity operating a business primarily for commercial
or agricultural purposes with not more than 200 full-time employees
maintaining offices or operating facilities and transacting business in the
state of Kansas and is not an individual obtaining a loan primarily for
personal, family or household purposes; or
(4) wholesale natural gas customer located in the state of Kansas that
incurs extraordinary natural gas costs due to the extreme winter weather
event of February 2021 and is not an individual obtaining a loan for
personal, family or household purposes.
(c) "Eligible lending institution" means:
(1) A bank as defined in K.S.A. 75-4201, and amendments thereto,
that agrees to participate in the program and is eligible to be a depository
of state funds;
(2) a credit union as defined in K.S.A. 17-2231, and amendments
thereto, that agrees to participate in the program and that provides
securities acceptable to the pooled money investment board pursuant to
article 42 of chapter 75 of the Kansas Statutes Annotated, and amendments
thereto; or
(3) an institution of the farm credit system organized under the
federal farm credit act of 1971 (12 U.S.C. § 2001), as in effect on July 1,
2025, that agrees to participate in the program and provides securities
acceptable to the pooled money investment board pursuant to article 42 of
chapter 75 of the Kansas Statutes Annotated, and amendments thereto.
(d) "House" means a single-family or multi-family dwelling that
initially sells or is appraised at or below the average area purchase price
safe harbor for the state of Kansas as established by the state treasurer
through rules and regulations based on the requirements of section 143(e)
of the federal internal revenue code for homes that are eligible for
mortgage revenue bonds.
(e) "Linked deposit loan" or "loan" means a loan made by an eligible
lending institution to an eligible borrower from the eligible lending
institution's loan deposit as part of the program.
(f) "Loan deposit" means an investment account placed by the
director of investments under the provisions of article 42 of chapter 75 of
the Kansas Statutes Annotated, and amendments thereto, with an eligible
lending institution for the purpose of carrying out the intent of the
program.
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(g) "Loan deposit loan package" means the forms provided by the
state treasurer for the purpose of applying for a loan deposit.
(h) "Program" means the Kanbucks program.
New Sec. 3. (a) The state treasurer is hereby authorized to invest in
linked deposits. Except as provided in subsection (c), the total amount so
deposited at any one time shall not exceed 5% of the pooled money
investment portfolio. Such deposits shall be used for linked deposits to
eligible borrowers. Linked deposit loans may be made to eligible
borrowers from such aggregate deposits. The state treasurer may
disseminate information and provide economic recovery loan deposit loan
packages to the lending institutions eligible for participation in the
program. A loan deposit loan package shall be completed by the eligible
borrower before being forwarded to the eligible lending institution for
consideration.
(b) (1) No single linked deposit loan to an eligible borrower for
agricultural production or business purposes shall exceed $2,500,000.
(2) No loan for a house shall be amortized for a period of more than
15 years.
(c) The state treasurer may invest additional amounts in linked
deposits beyond the limit established in subsection (a) if the state treasurer
receives approval from the pooled money investment board for each such
additional linked deposit.
New Sec. 4. (a) An eligible lending institution that agrees to receive a
loan deposit shall accept and review applications for loans from eligible
borrowers. The lending institution shall apply all usual lending standards
to determine the credit worthiness of an eligible borrower.
(b) An eligible borrower shall certify on the loan application the
purpose for which such loan will be used.
(c) The eligible lending institution may approve or reject a loan
application based on the lending institution's evaluation of the eligible
borrower, the amount of the loan and other appropriate considerations.
(d) The eligible lending institution shall forward to the state treasurer,
an approved loan deposit loan package in the manner prescribed by the
state treasurer. The package shall include information regarding the
amount of the loan requested by each eligible borrower and such other
information regarding each eligible borrower the state treasurer requires,
including a certification by the applicant that such applicant is an eligible
borrower.
New Sec. 5. (a) The state treasurer may accept or reject a loan deposit
loan package based on the state treasurer's evaluation of whether the loan
to the eligible borrower meets the purposes of this program. If sufficient
funds are not available for a loan deposit, then the applications may be
considered in the order received when funds are once again available
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subject to a review by the eligible lending institution.
(b) Upon acceptance, the state treasurer shall certify to the director of
investments the amount required for such loan deposit loan package and
the director of investments shall place a loan deposit in the amount
certified by the state treasurer with the eligible lending institution at an
interest rate that is 2% below the market rate provided in K.S.A. 75-4237,
and amendments thereto, and that shall be recalculated on the first
business day of January and July of each year using the market rate then in
effect. The minimum interest rate shall be 0.25%, if the market rate is
below 2.25%. When necessary, the state treasurer may request the director
of investments to place such loan deposit with the eligible lending
institution prior to acceptance of a loan deposit loan package.
(c) The eligible lending institution shall enter into a loan deposit
agreement with the state treasurer. Such agreement shall include
requirements necessary to implement the purposes of the program. Such
requirements shall include an agreement by the eligible lending institution
to lend an amount equal to the loan deposit to eligible borrowers at an
interest rate that is not more than 3% greater than the interest rate on loan
deposits as provided in subsection (b). Such rate shall be recalculated on
the first business day of January of each year using the market rate then in
effect. The agreement shall include provisions for the loan deposit to be
placed for a period of time not to exceed 10 years that is considered
appropriate in coordination with the underlying loan. The agreement shall
include provisions for the reduction of the loan deposit in an amount equal
to any payment of loan principal by the eligible borrower.
New Sec. 6. Upon the placement of an economic recovery loan
deposit with an eligible lending institution, such eligible lending institution
shall fund the loan to each approved eligible borrower listed in the
economic recovery deposit loan package in accordance with the economic
recovery loan deposit agreement between the eligible lending institution
and the state treasurer. The loan shall be at a rate as provided in section
5(c), and amendments thereto. The eligible lending institution shall submit
in the manner prescribed by the state treasurer a certification of
compliance with this section.
New Sec. 7. The state and the state treasurer shall not be liable to any
eligible lending institution in any manner for payment of the principal or
interest on a loan to an eligible borrower. Any delay in payments or default
on the part of an eligible borrower does not in any manner affect the loan
deposit agreement between the eligible lending institution and the state
treasurer.
New Sec. 8. (a) The state treasurer shall adopt rules and regulations to
administer and carry out the provisions of the program.
(b) The state treasurer shall submit an annual report outlining the
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status of the program to the governor and the legislature.
New Sec. 9. Any outstanding linked deposit loans in existence on
July 1, 2025, under the provisions of K.S.A. 75-4268 through 75-4274 or
75-4290 through 75-4296, prior to their repeal, shall be continued under
the terms of the linked deposit loan program in existence prior to the
repeal of such statutes.
Sec. 10. K.S.A. 2024 Supp. 75-4209 is hereby amended to read as
follows: 75-4209. (a) The director of investments may invest and reinvest
state moneys eligible for investment which are not invested in accordance
with K.S.A. 75-4237, and amendments thereto, in the following
investments:
(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 the United States sponsored enterprises which
under federal law may be accepted as security for public funds, on and
after the effective date of this act moneys available for investment under
this subsection shall not be invested in mortgage-backed securities of such
enterprises and of the government national mortgage association, except
that any such mortgage-backed securities held prior to the effective date of
this act may be held to maturity;
(2) repurchase agreements with a bank or a primary government
securities dealer which 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 States government or any
agency thereof and obligations and securities of United States government
sponsored enterprises which under federal law may be accepted as security
for public funds;
(3) 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; and
(4) corporate bonds which have received one of the two highest
ratings by a nationally recognized investment rating firm.
(b) When moneys are available for deposit or investments, the
director of investments may invest in SKILL act projects and bonds
pursuant to K.S.A. 74-8920, and amendments thereto, and in state agency
bonds and bond projects.
(c) When moneys are available for deposits or investments, the
director of investments may invest in preferred stock of Kansas venture
capital, inc., under terms and conditions prescribed by K.S.A. 74-8203,
and amendments thereto, but such investments shall not in the aggregate
exceed a total amount of $10,000,000.
(d) When moneys are available for deposits or investments, the
director of investments may invest in loans pursuant to legislative
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mandates, except that not more than the greater of 10% or $140,000,000 of
the state moneys shall be invested. The provisions of this subsection shall
not apply to the provisions of subsection (m).
(e) Interest on investment accounts in banks is to be paid at maturity,
but not less than annually.
(f) Investments made by the director of investments under the
provisions of this section shall be made with judgment and care, under
circumstances then prevailing, which persons of prudence, discretion and
intelligence exercise in the management of their own affairs, not for
speculation, but for investment, considering the probable safety of their
capital as well as the probable income to be derived.
(g) Investments under subsection (a) or (b) or under K.S.A. 75-4237,
and amendments thereto, shall be for a period not to exceed four years,
except that linked deposits authorized under the provisions of K.S.A. 2-
3703 through 2-3707, and amendments thereto, shall not exceed a period
of 10 years ; agricultural production loan deposits authorized under the
provisions of K.S.A. 75-4268 through 75-4274, and amendments thereto,
shall not exceed a period of eight years and housing loan deposits
authorized under K.S.A. 75-4276 through 75-4282, and amendments
thereto, shall not exceed a period of five years or 20 years, as applicable
pursuant to K.S.A. 75-4279, and amendments thereto.
(h) Investments in securities under subsection (a)(1) shall be limited
to securities which 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.
(i) The director of investments shall not invest state moneys eligible
for investment under subsection (a), in the municipal investment pool
fund, created under K.S.A. 12-1677a, and amendments thereto.
(j) The director of investments shall not invest moneys in the pooled
money investment portfolio in derivatives. As used in this subsection,
"derivatives" means a financial contract whose value depends on the value
of an underlying asset or index of asset values.
(k) Moneys and investments in the pooled money investment
portfolio shall be invested and reinvested by the director of investments in
accordance with investment policies developed, approved, published and
updated on an annual basis by the board. Such investment policies shall
include at a minimum guidelines which identify credit standards, eligible
instruments, allowable maturity ranges, methods for valuing the portfolio,
calculating earnings and yields and limits on portfolio concentration for
each type of investment. Any changes in such investment policies shall be
approved by the pooled money investment board. Such investment policies
may specify the contents of reports, methods of crediting funds and
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accounts and other operating procedures.
(l) The board shall adopt rules and regulations to establish an overall
percentage limitation on the investment of moneys in investments
authorized under subsection (a)(3), and within such authorized investment,
the board shall establish a percentage limitation on the investment in any
single business entity.
(m) (1) During the fiscal year ending June 30, 2017, the director of
the budget shall estimate on or before June 27, 2017, the amount of the
unencumbered ending balance in the state general fund for fiscal year
2017. If the amount of such unencumbered ending balance in the state
general fund is less than $50,000,000, the director of the budget shall
certify the difference between $50,000,000, and the amount of such
unencumbered ending balance to the pooled money investment board.
Upon the liquidation of all investments and reinvestments of state moneys
pursuant to K.S.A. 75-2263(j), and amendments thereto, and upon receipt
of such certification by the director of the budget, during the fiscal year
ending June 30, 2017, the pooled money investment board shall authorize
the director of accounts and reports to transfer an amount equal to the
amount certified by the director of the budget pursuant to this subsection
from the pooled money investment portfolio to the state general fund.
Upon receipt of such authorization, the director of accounts and reports
shall make such transfer. The chairperson of the pooled money investment
board shall transmit a copy of such authorization to the director of
legislative research and the director of the budget.
(2) (A) On or before June 30, 2019, the director of accounts and
reports shall transfer an amount equal to 1/6 of the amount transferred
pursuant to subsection (m)(1) from the state general fund to the pooled
money investment portfolio.
(B) On or before June 30, 2020, the director of accounts and reports
shall transfer an amount equal to 1/2 of the amount transferred pursuant to
subsection (m)(1), reduced by the amount transferred pursuant to
subsection (m)(2)(A) from the state general fund to the pooled money
investment portfolio.
(C) On or before June 30, 2021, and June 30, 2022, during each such
fiscal year, the director of accounts and reports shall transfer an amount
equal to 1/2 of the amount transferred pursuant to subsection (m)(1),
reduced by the amount transferred pursuant to subsection (m)(2)(A) and
(m)(2)(B) from the state general fund to the pooled money investment
portfolio.
(3) During the fiscal year ending June 30, 2018, after any transfer
made pursuant to subsection (m)(1), the pooled money investment board
shall authorize the director of accounts and reports to transfer the
remaining amount of all investments and reinvestments of state moneys
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liquidated pursuant to K.S.A. 75-2263(j), and amendments thereto, from
the pooled money investment portfolio to the state general fund. Upon
receipt of such authorization, the director of accounts and reports shall
make such transfer. The chairperson of the pooled money investment
board shall transmit a copy of such authorization to the director of
legislative research and the director of the budget.
(4) (A) On or before June 30, 2019, the director of accounts and
reports shall transfer an amount equal to 1/6 of the amount transferred
pursuant to subsection (m)(3) from the state general fund to the pooled
money investment portfolio.
(B) On or before June 30, 2020, the director of accounts and reports
shall transfer an amount equal to 1/2 of the amount transferred pursuant to
subsection (m)(3), reduced by the amount transferred pursuant to
subsection (m)(4)(A) from the state general fund to the pooled money
investment portfolio.
(C) On or before June 30, 2021, and June 30, 2022, during each such
fiscal year, the director of accounts and reports shall transfer an amount
equal to 1/2 of the amount transferred pursuant to subsection (m)(3),
reduced by the amount transferred pursuant to subsection (m)(4)(A) and
(m)(4)(B) from the state general fund to the pooled money investment
portfolio.
Sec. 11. K.S.A. 2024 Supp. 75-4237 is hereby amended to read as
follows: 75-4237.(a) The director of investments shall accept requests
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 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.
(b) 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) (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
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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 linked deposit loans made pursuant to the
provisions of K.S.A. 75-4268 through 75-4274 sections 1 through 8 , 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) (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
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) The pooled money investment board shall establish procedures for
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administering reciprocal deposit programs in its investment policies, as
authorized by K.S.A. 75-4232, and amendments thereto.
Sec. 12. K.S.A. 75-4268, 75-4269, 75-4270, 75-4271, 75-4272, 75-
4273, 75-4274, 75-4275, 75-4276, 75-4277, 75-4278, 75-4279, 75-4280,
75-4281 and 75-4282 and K.S.A. 2024 Supp. 75-4209, 75-4237, 75-4283,
75-4284, 75-4285, 75-4286, 75-4287, 75-4288, 75-4289, 75-4290, 75-
4291, 75-4292, 75-4293, 75-4294, 75-4295, 75-4296, 75-4297, 75-4298,
75-4299, 75-42,100, 75-42,101 and 75-42,102 are hereby repealed.
Sec. 13. This act shall take effect and be in force from and after its
publication in the statute book.
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