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Session of 2025
SENATE BILL No. 115
By Committee on Federal and State Affairs
1-30
AN ACT concerning precious metals; relating to gold and silver bullion
and specie; enacting the Kansas bullion depository act; authorizing the
state treasurer to establish, administer or contract for the administration
of bullion depositories; allowing state moneys to be deposited in such
bullion depositories and invested in specie legal tender; amending
K.S.A. 2024 Supp. 75-4209 and repealing the existing section.
Be it enacted by the Legislature of the State of Kansas:
New Section 1. The provisions of sections 1 through 10, and
amendments thereto, shall be known and may be cited as the Kansas
bullion depository act.
New Sec. 2. As used in the Kansas bullion depository act:
(a) "Act" means the Kansas bullion depository act.
(b) "Administrator" means the individual or entity appointed by the
state treasurer to oversee the operation and management of the
depositories.
(c) "Bullion" means refined gold or silver in any shape or form with
uniform content and purity, including, but not limited to, coins, rounds,
bars, ingots or any other product that is:
(1) Stamped or imprinted with the weight and purity of the gold or
silver that it contains; and
(2) valued primarily based on its metal content and not on its form
and function.
(d) "Depository" means a bullion depository established by section 9,
and amendments thereto, or established by and located in another
jurisdiction and designated as a depository by the state treasurer pursuant
to section 3, and amendments thereto.
(e) "Depository account" means an account established with a
depository to facilitate the storage, transfer and exchange of bullion.
(f) "Electronic currency" means a representation of actual precious
metals, specie or bullion held in a depository account that may be
transferred by electronic instruction. Such representation shall reflect the
exact units of physical precious metals, specie or bullion in such
depository account in its fractional troy ounce measurement as provided in
this act.
(g) "Precious metal" means gold or silver.
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(h) "Specie" means bullion fabricated into products of uniform shape,
size, design, content, weight and purity that is suitable for or customarily
used as currency, as a medium of exchange or as the medium for purchase,
sale, storage, transfer or delivery of precious metals in retail or wholesale
transactions.
(i) "Specie legal tender" means gold or silver coin or bullion,
including, but not limited to, gold or silver coin issued by the United
States.
New Sec. 3. (a) The state treasurer may:
(1) Establish and administer bullion depositories to provide a secure
location for the storage of bullion;
(2) contract with a third party to act as the administrator to manage
the day-to-day operations of bullion depositories located in this state and
implement the depositories' security, storage and transactional and
administrative procedures in accordance with this act; or
(3) contract with one or more bullion depositories established and
located in another jurisdiction for the secure storage and administration of
bullion deposits made in accordance with this act.
(b) If the state treasurer enters into a contract pursuant to subsection
(a)(3), the state treasurer shall designate the bullion depository named in
such contract as an official state bullion depository.
(c) As used in this section, "security" means physical, online and
logical security standards that meet generally accepted standards within
the information assurance industry.
New Sec. 4. (a) A person, an individual, a corporation, a partnership,
a company, an association, a trust, an estate and a governmental entity,
may establish a depository account by entering into a depository
agreement with a depository.
(b) A depository account holder may purchase, sell, deposit or
withdraw bullion through the holder's account in accordance with this
section and any rules and regulations adopted thereunder. A depository
shall have processes and systems to facilitate timely bullion purchases,
sales, deposits and withdrawals, including, but not limited to:
(1) Physical deposits and withdrawals to and from the depository's
physical location, or a partner organization such as a major mint or refiner
capable of providing bullion that meets standards established by the state
treasurer; and
(2) electronic systems that meet current industry standards for the
purchase and sale of bullion for depository account holders that cannot or
choose not to travel to the physical location.
(c) State agencies, counties, municipalities and other governmental
entities may use a depository for storing bullion. The state treasurer may
deposit a portion of state moneys into a depository in the form of bullion
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and such bullion shall be considered part of the state's official financial
reserves. The state treasurer shall develop guidelines for the state's use of
depositories. All deposits of state moneys into a depository shall be
secured by a pledge of securities as provided in K.S.A. 75-4218, and
amendments thereto.
(d) The administrator shall maintain a record of all depository
accounts and all transactions, deposits and withdrawals associated with
each account. Such records shall be provided to the state treasurer within
five business days after the state treasurer's request. All records shall be
kept and maintained, at a minimum, on an approved state computer system
for a period of at least seven years.
New Sec. 5. (a) The administrator shall ensure that a depository has
state-of-the-art security measures to prevent theft, fraud or other
unauthorized access or removal of bullion.
(b) A depository shall maintain insurance coverage sufficient to cover
the full value of all bullion stored at the depository. Such insurance shall
be provided by an insurer that is rated "A" or higher by am best company
or an equivalent rating by another national rating service acceptable to the
administrator.
(c) An independent third party shall conduct audits at least twice a
year to verify the amount and value of bullion stored in a depository and to
inspect the security measures and protocols in place. Such independent
third party shall be an established provider with a good history of
providing such auditing service. Documentation of audit results shall be
made available within a reasonable timeframe to the public upon request.
Documentation shall include, at a minimum, summary totals of precious
metal amounts assessed, as well as documentation of any discrepancies
found during the audit.
(d) A depository shall comply all with federal and state laws
pertaining to bullion storage, management and transactions. The
administrator shall consult regularly with legal counsel to ensure that each
depository remains compliant with evolving laws and regulations.
New Sec. 6. (a) An employee or official associated with the oversight
or operation of a depository shall:
(1) Have no financial interests in companies or entities that produce,
sell or manage bullion; and
(2) disclose any potential conflict of interest to the state treasurer
immediately upon discovery.
(b) A violation of this section may result in the employee's or
official's removal from position, fines or other legal penalties as
determined by the state treasurer.
New Sec. 7. The state treasurer shall have all authority necessary to
enter into contractual agreements with third parties to administer this act.
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The administrator may enter into contractual agreements with private
entities for the provision of services for bullion storage, transportation or
security. All contractual agreements shall be reviewed and approved by the
state treasurer to ensure that such agreements align with the state's interests
and security requirements.
New Sec. 8. (a) A depository shall not be terminated or transferred to
a private entity unless such termination or transfer is approved by an act of
the legislature. A depository termination or transfer shall ensure the
security of the bullion, the rights of account holders and the financial
interests of the state.
(b) The administrator shall provide a quarterly report to the state
treasurer detailing the operations, transactions and financial status of each
depository.
(c) The state treasurer shall provide an annual report to the legislature
on or before the first day of the regular session of the legislature regarding
the operations and financial status of each depository.
New Sec. 9. The state treasurer shall adopt rules and regulations
necessary to administer the provisions of this act, including, but not
limited to, rules and regulations for the establishment, operation, security
and administration of a depository.
New Sec. 10. (a) A purported confiscation, requisition, seizure or
other attempt to control the ownership, disposition or proceeds of a
withdrawal, transfer, liquidation or settlement of a depository account or
an electronic currency account, including the precious metals represented
by the balance of a depository account or an electronic currency account, if
effected by a governmental or quasi-governmental authority other than an
authority of this state or by a financial institution or other person acting on
behalf of or pursuant to a directive or authorization issued by a
governmental or quasi-governmental authority other than an authority of
this state, in the course of a generalized declaration of illegality or
emergency relating to the ownership, possession or disposition of one or
more precious metals, contracts or other rights to the precious metals,
contracts or derivatives of the ownership, possession, disposition, contracts
or other rights, is hereby declared to be null and void and shall have no
force or effect.
(b) A depository in the case of receiving notice of a purported
confiscation, requisition, seizure or other attempt to control the ownership,
disposition or proceeds of a withdrawal, transfer, liquidation or settlement
of a depository account or an electronic currency account, including the
precious metals represented by the balance of a depository account or an
electronic currency account, if effected by a governmental or quasi-
governmental authority other than an authority of this state or by a
financial institution or other person acting on behalf of or pursuant to a
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directive or authorization issued by a governmental or quasi-governmental
authority other than an authority of this state, in the course of a generalized
declaration of illegality or emergency relating to the ownership, possession
or disposition of one or more precious metals, contracts or other rights to
the precious metals, contracts or derivatives of the ownership, possession,
disposition, contracts or other rights, shall not recognize the governmental
or quasi-governmental authority, financial institution or other person
acting as the lawful successor of the registered holder of the depository
account or the electronic currency account in question.
(c) Upon receipt of notice of any transaction described in subsection
(a), with respect to all or any portion of the balance of a depository
account or an electronic currency account, a depository shall suspend
withdrawal privileges associated with the balances of the depository
account or electronic currency account until suitable substitute
arrangements may be effected in accordance with rules and regulations of
the state treasurer to enable the registered account holder to take delivery
of the precious metals represented by the account balances in question. A
voluntary transfer of a depository account or an electronic currency
account balance or of a depository account or an electronic currency
account among depository account or electronic currency account holders
may continue to take place unaffected by the suspension, and the
depository shall recognize such voluntary transfer to the full extent
authorized by this section and rules and regulations adopted under this act.
(d) The state treasurer shall refer any matter relating to an action
described in subsection (a) to the attorney general for resolution.
Sec. 11. 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
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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; and
(5) specie legal tender, as defined in section 2, and amendments
thereto.
(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
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
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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
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
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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
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 Investments in specie legal tender under subsection (a)(5) shall
not exceed 20% of the total amount of the pooled money investment
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portfolio at the time such investment is made.
Sec. 12. K.S.A. 2024 Supp. 75-4209 is 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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