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SENATE BILL No. 435
AN ACT concerning state-managed investments; relating to deposits, procedures, standards
and requirements therefor and certain retirement benefits therefrom; requiring banks,
savings and loan associations and savings banks to enter into a written agreement
with the state treasurer to be a depository of public moneys; increasing the market
value of securities necessary to secure the deposit of public moneys; providing
procedures for when a depository fails to follow the requirements of the state
treasurer; authorizing the state treasurer to assess a fee to operate the public moneys
pooled method; creating the public moneys fee fund of the state treasurer; providing
exceptions to the public moneys pooled method; making and concerning
appropriations for the fiscal year ending June 30, 2027, for the office of the state
treasurer; authorizing a certain transfer from the state general fund to the public
moneys fee fund; modifying investment standards for the board of trustees of the
Kansas public employees retirement system of moneys certified by the state treasurer
as equivalent to the aggregate net amount received for unclaimed property and
authorizing investments in certain foreign governments; authorizing the board of
trustees to elect the vice chairperson of the board; requiring newly affiliated
employers of the Kansas police and firemen's retirement system to contribute at the
actuarial required rate for past and future service; repealing certain working after
retirement statutes for state and local elected officials; amending K.S.A. 9-1401, 9-
1403, 9-1405, 9-1406, 9-1407, 9-1408, 74-4967 and 75-4201 and K.S.A. 2025 Supp.
9-1402, 9-1410, 12-1675, 74-4905, 75-2263 and 75-4218 and repealing the existing
sections; also repealing K.S.A. 74-4915b and 74-4915c.
Be it enacted by the Legislature of the State of Kansas:
New Section 1.
OFFICE OF THE STATE TREASURER
(a) There is appropriated for the above agency from the following
special revenue fund or funds for the fiscal year ending June 30, 2027,
all moneys now or hereafter lawfully credited to and available in such
fund or funds, except that expenditures shall not exceed the following:
Public moneys fee fund............................................................... No limit
(b) On July 1, 2026, or as soon thereafter as moneys are available,
the director of accounts and reports shall transfer $250,000 from the
state general fund to the public moneys fee fund.
Sec. 2. K.S.A. 9-1401 is hereby amended to read as follows: 9-
1401. (a) The governing body of any municipal corporation or quasi-
municipal corporation shall designate by official action , recorded upon
the governing body's minutes , the banks, savings and loan associations
and savings banks which that shall serve as depositories of the
governing body's funds, and the officer and official having the custody
of such funds shall not deposit such funds other than at such designated
banks, savings and loan associations and savings banks. The 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
municipal corporation or quasi-municipal corporation is located shall
be designated as such official depositories if the municipal or quasi-
municipal corporation can obtain satisfactory security therefor.
(b) Every officer or person depositing public funds shall deposit
all such public funds coming into the officer's or person's possession in
their name and official title as such officer. If the governing body of the
municipal corporation or quasi-municipal corporation fails to designate
an official depository or depositories, the officer thereof having custody
of the governing body's funds shall deposit such funds with one or
more banks, savings and loan associations or savings banks which that
have main or branch offices in the county or counties in which all or
part of such municipal corporation or quasi-municipal corporation is
located if satisfactory security can be obtained therefor. If the officer
having custody is unable to obtain satisfactory security at a depository
within the county or counties where the governing body is located, then
the officer may deposit funds elsewhere. If the governing body's funds
are deposited elsewhere, the officer shall serve notice in writing on the
governing body showing the names and locations of the banks, savings
and loan associations and savings banks where the funds are deposited,
and upon so doing the officer having custody of the funds shall not be
SENATE BILL No. 435—page 2
liable for the loss of any portion thereof except for official misconduct
or for the misappropriation of such funds by such officer.
(c) If eligible banks, savings and loan associations or savings
banks under subsections subsection (a) or (b) cannot or will not provide
an acceptable bid, which shall include services, for the depositing of
public funds under this section, then banks, savings and loan
associations or savings banks which that have main or branch offices in
an adjoining county to the county in which all or part of such municipal
or quasi-municipal corporation is located may receive deposits of such
municipal corporation or quasi-municipal corporation, if such banks,
savings and loan associations or savings banks have been designated as
official depositories under subsection (a) , and the municipal
corporation or quasi-municipal corporation can obtain state treasurer
may receive satisfactory security therefor.
(d) The depository bank, savings and loan association or savings
bank and any agent, trustee, wholly owned subsidiary or affiliate
having identical ownership granting a security interest shall enter into a
written agreement with the municipal corporation or quasi-municipal
corporation which so state treasurer in accordance with K.S.A. 2025
Supp. 9-1410, and amendments thereto, that designates the bank as a
depository for the municipal corporation or quasi-municipal
corporation's public moneys.
(1) The agreement shall secure the public moneys of the municipal
corporation or quasi-municipal corporation by granting a security
interest in securities held by the depository bank, savings and loan
association or savings bank and any agent, trustee, wholly owned
subsidiary or affiliate having identical ownership pursuant to K.S.A. 9-
1402, and amendments thereto.
(2) The depository bank, savings and loan association or savings
bank and any agent, trustee, wholly owned subsidiary or affiliate
having identical ownership shall perfect the security interest causing
control to be given to the municipal corporation or quasi-municipal
corporation state treasurer in accordance with the Kansas uniform
commercial code K.S.A. 2025 Supp. 9-1410, and amendments thereto.
(3) The security agreement shall be in writing, executed by all
parties thereto, maintained as part of the parties' official records, and
except for the municipal corporations or quasi-municipal corporations,
approved by the boards of directors or loan committees, which
approvals shall be reflected in the minutes of the boards or committees.
Sec. 3. K.S.A. 2025 Supp. 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 governmental unit of the state of Kansas with any
bank, savings and loan association or savings bank, such 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. 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 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
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
governmental unit municipal corporation or quasi-municipal
SENATE BILL No. 435—page 3
corporation 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 institution's wholly owned subsidiary or
by such affiliate, the market value of which is equal to 100% 102% 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 governmental unit pooled
money investment board 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 corporations that under
federal law may be accepted as security for public funds;
(2) bonds of any governmental unit municipal corporation or
quasi-municipal corporation of the state of Kansas 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 governmental unit municipal
corporation or quasi-municipal corporation of the state of Kansas;
(5) revenue bonds of any governmental unit municipal
corporation or quasi-municipal corporation of the state of Kansas if
approved by the commissioner;
(6) temporary notes of any governmental unit municipal
corporation or quasi-municipal corporation of the state of Kansas that
are general obligations of the governmental unit municipal corporation
or quasi-municipal corporation issuing such temporary notes;
(7) warrants of any governmental unit municipal corporation or
quasi-municipal corporation of the state of Kansas the issuance of
which is if issuance are authorized by the state board of tax appeals and
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 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;
SENATE BILL No. 435—page 4
(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 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 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 K.S.A. 2025
Supp. 9-1410, 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 K.S.A. 2025 Supp. 9-
1410, 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
governmental unit of the state of Kansas, any securities that consist of:
(1) Bonds secured by revenues of a utility 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 (c) or such bonds are rated at least
Aa by Moody's investors service or AA by Standard & Poor's corp.
(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 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
stateIn cases where a depository fails to meet the requirements
established by the state treasurer, the state treasurer shall instruct the
governmental unit that such governmental unit shall select one of the
following options:
(1) Close the account for the full amount, including accrued
interest, without penalty if the deposit exceeds seven days; or
(2) convert the account to a repurchase agreement under terms
acceptable to the state treasurer.
Sec. 4. K.S.A. 9-1403 is hereby amended to read as follows: 9-
1403. (a) During the periods of peak deposits occurring at tax paying
SENATE BILL No. 435—page 5
time and tax distributing time and continuing for a period of not to
exceed 60 continuous days at any given time and not to exceed 120
days in any calendar year , the amount of security for the deposits of
municipal corporations or quasi-municipal corporations governmental
units as required under K.S.A. 9-1402, and amendments thereto, may
be reduced by up to 50% of the amount on deposit during the peak
period.
(b) If the custodian of the funds of each municipal corporation or
quasi-municipal corporation governmental unit together with an officer
of the depository bank, savings and loan association or savings bank
and the state treasurer agree to reduce the amount of security as
provided in subsection (a), then the parties shall enter into an
agreement which that designates in writing the beginning and end of
each such period, and a copy thereof, fully executed, shall be kept on
file in the:
(1) Office of the governing body of such municipal corporation or
quasi-municipal corporation and in the governmental unit;
(2) files of such bank, savings and loan association or savings
bank; and
(3) office of the state treasurer.
Sec. 5. K.S.A. 9-1405 is hereby amended to read as follows: 9-
1405. (a) All bonds and securities given by any bank, savings and loan
association or savings bank to secure public moneys of the United
States or any board, commission or agency thereof , shall be deposited
as required by the United States government or any designated federal
agencies.
(b) All securities, security entitlements and financial assets
securing the deposits of any municipal corporation or quasi-municipal
corporation governmental unit shall be deposited as described in
subsection (c) or (d) or in a securities account with one of the following
custodial banks or trust companies:
(1) A Kansas state bank;
(2) a Kansas national bank;
(3) a state bank organized in another state and which that has a
branch office in this state;
(4) a trust company incorporated under the laws of this state or
another state; or
(5) the federal home loan bank of Topeka.
(c) Securities, security entitlements and financial assets securing
the deposits of any municipal corporation or quasi-municipal
corporation governmental unit may be deposited with the state treasurer
pursuant to a written custodial agreement and a receipt issued with one
copy going to the municipal corporation or quasi-municipal corporation
governmental unit making the public deposit and one copy going to the
bank, savings and loan association or savings bank which that has
secured such public deposits. The receipt shall identify the securities,
security entitlements and financial assets which that are subject to a
security interest to secure payment of the deposits of the municipal
corporation or quasi-municipal corporation governmental unit.
(d) Securities, security entitlements and financial assets securing
the deposits of any municipal corporation or quasi-municipal
corporation governmental unit may be deposited with the federal
reserve bank of Kansas City to be there held in such manner, under
regulations and operating letters of the federal reserve bank of Kansas
City, as to secure payment of the deposits of the municipal corporation
or quasi-municipal corporation governmental unit in the depository
institution.
(e) This section shall not prohibit any custodial bank or trust
company from depositing securities, security entitlements and financial
SENATE BILL No. 435—page 6
assets in the custodial bank or trust company's account if:
(1) The custodial bank or trust company's account is located at a
bank or trust company organized under the laws of any state, the United
States or any centralized securities depository wherever located within
the United States; and
(2) the custodial bank or trust company issues a receipt which that
identifies the securities, security entitlements and financial assets on
deposit at the custodial bank or trust company.
(f) No securities, security entitlements and financial assets
securing public deposits shall be deposited in any custodial bank or
trust company which that has the following commonalities with the
depository bank, savings and loan association or savings bank:
(1) Direct or indirect ownership by any parent corporation;
(2) common controlling shareholders;
(3) common majority of the board of directors; or
(4) common directors with the ability to control or influence
directly or indirectly the acts or policies of the depository bank, savings
and loan association or savings bank securing such public deposits.
(g) When securities, security entitlements and financial assets are
deposited with the state treasurer as authorized by this section, the state
treasurer shall make a charge for such service which that is equivalent
to the reasonable and customary charge made therefor.
(h) The custodial agreement shall be in writing, executed by all
parties thereto, maintained as part of the parties' official records , and,
except for the municipal corporations or quasi-municipal corporation
governmental unit, approved by the boards of directors or loan
committees, which. Such approvals shall be reflected in the minutes of
the boards or committees.
(i) A bank, savings and loan association or savings bank which
that fails to pay any deposit of public moneys of any municipal or
quasi-municipal corporation governmental unit according to the terms
of the security agreement shall immediately take action to enable bonds
and securities pledged to secure the deposit to be sold to satisfy the
bank's or association's obligation to the municipal or quasi-municipal
corporation governmental unit.
Sec. 6. K.S.A. 9-1406 is hereby amended to read as follows: 9-
1406. No public officer nor or the sureties upon such officer's bond
shall be liable for any loss sustained by the failure or default of any
designated depository or depositories after a deposit or deposits have
been made in an officially designated bank, savings and loan
association or savings bank as provided in this act article 14 of chapter
9 of the Kansas Statutes Annotated, and amendments thereto. This Such
exemption from liability shall apply even though other statutes shall
require the furnishing of a bond or other securities by the designated
depositories of public moneys. This Such exemption shall also apply
whenever a public officer , municipal corporation or quasi-municipal
corporation or governmental unit has acted in good faith to comply
with the provisions of this act article 14 of chapter 9 of the Kansas
Statutes Annotated, and amendments thereto.
Sec. 7. K.S.A. 9-1407 is hereby amended to read as follows: 9-
1407. (a) That portion of any deposit of public moneys or funds which
that is insured by the federal deposit insurance corporation , or its
successor, need not be secured as provided in article 14 of chapter 9 of
the Kansas Statutes Annotated, and amendments thereto.
(b) Public moneys or funds deposited by a municipal corporation
or quasi-municipal corporation governmental unit in a selected bank,
savings and loan association or savings bank which that are part of a
reciprocal deposit program shall not be treated as securities and need
not be secured as provided in article 14 of chapter 9 of the Kansas
SENATE BILL No. 435—page 7
Statutes Annotated, and amendments thereto, if the:
(1) Bank, savings and loan association or savings bank 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
governmental unit; and
(2) 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.
Sec. 8. K.S.A. 9-1408 is hereby amended to read as follows: 9-
1408. As used in article 14 of chapter 9 of the Kansas Statutes
Annotated, and amendments thereto:
(a) "Branch" means any office within this state or another state,
other than the main office, that is approved as a branch by a federal or
state supervisory agency and at which deposits are received, checks
paid or money lent. "Branch" does not include an automated teller
machine, remote service unit or similar device, a loan production office
or a deposit production office;
(b) "centralized securities depository" means a clearing agency
registered with the securities and exchange commission which that
provides safekeeping and book-entry settlement services to the agency's
participants;
(c) "governmentgovernmental unit" means any state, county,
municipality or other political subdivision thereof;
(d) "Kansas national bank" means a federally chartered bank
which that has a main office or branch located in this state;
(e) "Kansas state bank" means a Kansas state chartered bank;
(f) "main office" means the place of business specified in the
articles of association, certificate of authority or similar document
where the business of the institution is carried on and which is not a
branch;
(g) "municipal corporation" or "quasi-municipal corporation"
includes each investing governmental unit under K.S.A. 12-1675, and
amendments thereto;
(h) "savings and loan association" means any savings and loan
association incorporated under the laws of this state or any other state
or organized under the laws of the United States and which has a main
or branch office in this state;
(i) "savings bank" means any savings bank organized under the
laws of the United States and which has a main or branch office in this
state; and
(j) "securities," "security entitlements," "financial assets,"
"securities account," "security agreement," "security interest,"
"perfection" and "control" shall have the meanings given such terms
under mean the same as defined in the Kansas uniform commercial
code.
Sec. 9. K.S.A. 2025 Supp. 9-1410 is hereby amended to read as
follows: 9-1410. (a) For purposes of K.S.A. 2025 Supp. 9-1410 through
9-1412, 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)(3) "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
SENATE BILL No. 435—page 8
prospectuses to owning securities enumerated in K.S.A. 9-1402(c) a
pool of eligible securities used by a bank, savings and loan association
or savings bank to 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.
(5)(4) "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
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 K.S.A. 2025 Supp. 9-1410 through 9-1412, and amendments
thereto, the treasurer may adopt rules and regulations to administer and
implement the provisions of K.S.A. 2025 Supp. 9-1410 through 9-
1412, 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
SENATE BILL No. 435—page 9
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
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 On
and after July 1, 2027, t he treasurer may assess a fee to be used solely
to operate the public moneys pooled method. Such fee shall be
equivalent to the reasonable and customary charge made therefor and
shall be adopted through rules and regulations. All such fees received
shall be deposited in the state treasury to the credit of the public
moneys fee fund, which is hereby created. All expenditures from the
SENATE BILL No. 435—page 10
public moneys fee fund shall be made in accordance with appropriation
acts upon warrants of the director of accounts and reports issued
pursuant to vouchers approved by the treasurer or the treasurer's
designee.
Sec. 10. K.S.A. 2025 Supp. 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 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) (A) 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)(i) In banks, savings and loan associations and savings banks
that have main or branch offices located in such investing
governmental unit; or
(B)(ii) 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
that have main or branch offices in the county or counties in which all
or part of such investing governmental unit is located.
(C)(B) In selecting a bank, savings and loan association or savings
bank pursuant to subparagraphs subparagraph (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
subparagraph (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, 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 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 that have main or
branch offices in the county or counties in 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
SENATE BILL No. 435—page 11
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
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 to 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
(C) primary government securities dealers 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
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 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
that have contracted to provide trust services under the provisions of
K.S.A. 9-2107, and amendments thereto, with banks 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, that are general obligations of the municipality
issuing the same.
(c) The investments authorized in 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 subsection (b)(2),
cannot or will not make the investments authorized in subsection (b)(2)
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.
(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.
(e) Public moneys deposited pursuant to subsection (b)(2) by the
governing body of any governmental unit listed in subsection (a)
SENATE BILL No. 435—page 12
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:
(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 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 statute.
(f) (1) Except as provided in paragraph (2), 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 K.S.A. 2025
Supp. 9-1410, 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 K.S.A.
2025 Supp. 9-1410, and amendments thereto.
(2) The provisions of paragraph (1) shall not apply to an account
of a governmental unit if such account is subject to a conflicting
federal law.
(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.
Section 11. K.S.A. 2025 Supp. 74-4905 is hereby amended to read
as follows: 74-4905. (a) On July 1, 1993, the board of trustees of the
Kansas public employees retirement system, as such board existed on
June 30, 1993, is hereby abolished. On July 1, 1993, there is hereby
established a new board of trustees of the Kansas public employees
retirement system. Such board established on July 1, 1993, shall consist
of nine members, as follows:
(1) Six appointed members, four appointed by the governor
subject to confirmation by the senate as provided in K.S.A. 75-4315b,
and amendments thereto, one appointed by the president of the senate
and one appointed by the speaker of the house of representatives.
Except as provided by K.S.A. 46-2601, and amendments thereto, no
person appointed to the board whose appointment is subject to
confirmation, shall exercise any power, duty or function as a member
of the board until confirmed by the senate. No more than two members
of the board whose appointment is subject to confirmation shall be
from the same political party;
(2) two retirement system members elected by the members and
retirants of the system as provided in K.S.A. 74-4909(12), and
amendments thereto. As provided in this subsection, only active and
retired members of the system shall be eligible to be elected to the
board and only active and retired members of the system shall be
eligible to elect the two retirement system members pursuant to this
subsection. Inactive members shall not be eligible to be elected to the
board nor to elect the two retirement system members elected pursuant
to this subsection. If a member elected to the board as provided in this
subsection becomes inactive, such member is disqualified from service
on the board and such member's board position shall be vacant and
such vacancy shall be filled as provided in subsection (b)(1). Of the
two retirement system members elected pursuant to this subsection, one
shall be a member of the retirement system who is in school
employment as provided in K.S.A. 74-4931 et seq., and amendments
SENATE BILL No. 435—page 13
thereto and one shall be a member of the retirement system other than a
member who is in school employment. For purposes of this subsection,
retirement system means the Kansas public employees retirement
system, the Kansas police and firemen's retirement system and the
retirement system for judges; and
(3) the state treasurer.
(b) (1) Except as provided by this paragraph and paragraph (2), all
members of the board as provided in subsection (a)(1) and (a)(2) shall
serve four-year terms, except that of the members first appointed by the
governor, two shall be appointed for two-year terms and the member
appointed by the speaker of the house of representatives shall be
appointed for a two-year term. The governor shall designate the term
for which each of the members first appointed shall serve. All members
appointed to fill vacancies in the membership of the board and all
members appointed to succeed members appointed to membership on
the board shall be appointed in like manner as that provided for the
original appointment of the member succeeded. All members appointed
to fill vacancies of a member of the board appointed by the governor,
the president of the senate or the speaker of the house of representatives
shall be appointed to fill the unexpired term of such member. All
vacancies on the board by a member elected by the members and
retirants of the system shall be filled by the board as provided by rules
and regulations adopted as provided in K.S.A. 74-4909(12), and
amendments thereto.
(2) Except as provided in K.S.A. 46-2601, and amendments
thereto, no person appointed to the board by the governor shall exercise
any power, duty or function as a member of the board until confirmed
by the senate. The terms of members appointed by the governor who
are serving on the board on the effective date of this act shall expire on
January 15, of the year in which such member's term would have
expired under the provisions of this section prior to amendment by this
act. Thereafter, members shall be appointed for terms of four years and
until their successors are appointed and confirmed.
(c) The board shall elect a chairperson of the board at the first
regular meeting held on or after July 1, 1993, and at each annual
meeting thereafter from the members of the board. The chairperson
shall preside over meetings of the board and perform such other duties
as required by the board.
(d) TheFollowing the election of a chairperson , the board shall
appoint elect another board member as vice-chairperson vice
chairperson, and the vice-chairperson vice chairperson shall perform
the duties of chairperson in the absence of the chairperson or upon the
chairperson's inability or refusal to act.
(e) The six members appointed pursuant to subsection (a)(1) shall
have demonstrated experience in the financial affairs of a public or
private organization or entity which that employs 100 or more
employees or had at least five years' experience in the field of
investment management or analysis, actuarial analysis or
administration of an employee benefit plan.
(f) No person shall serve on the board if such person has
knowingly acquired a substantial interest in any nonpublicly traded
investment made with moneys of the fund. Any such person who
knowingly acquires such an interest shall vacate such member's
position on the board and shall be guilty of a class A misdemeanor. For
purposes of this subsection, "substantial interest" means any of the
following:
(1) If an individual or an individual's spouse, either individually or
collectively, has owned within the preceding 12 months a legal or
equitable interest exceeding $5,000 or 5% of any business, whichever
SENATE BILL No. 435—page 14
is less, the individual has a substantial interest in that business.
(2) If an individual or an individual's spouse, either individually or
collectively, has received during the preceding calendar year
compensation which that is or will be required to be included as taxable
income on federal income tax returns of the individual and spouse in an
aggregate amount of $2,000 from any business or combination of
businesses, the individual has a substantial interest in that business or
combination of businesses.
(3) If an individual or an individual's spouse holds the position of
officer, director, associate, partner or proprietor of any business, the
individual has a substantial interest in that business, irrespective of the
amount of compensation received by the individual or individual's
spouse.
(4) If an individual or an individual's spouse receives
compensation which that is a portion or percentage of each separate fee
or commission paid to a business or combination of businesses, the
individual has a substantial interest in any client or customer who pays
fees or commissions to the business or combination of businesses from
which fees or commissions the individual or the individual's spouse,
either individually or collectively, received an aggregate of $2,000 or
more in the preceding calendar year.
(5) If an individual or an individual's spouse has received a loan
from or received financing from any bank, savings and loan, credit
union or any other financial institution in an amount which that
exceeds $2,000, the individual has a substantial interest in that financial
institution.
(6) As used in this subsection, "client or customer" means a
business or combination of businesses.
(7) Any person who serves on the board shall fully disclose any
substantial interest that such person has in any publicly traded
investment made with moneys of the fund.
(g) No person who serves on the board shall be employed for a
period of two years commencing on the date the person no longer
serves on the board and ending two years after such date with any
organization in which moneys of the fund were invested, except that
the employment limitation contained in this subsection shall not apply
if such person's employment is with an organization whose stock or
other evidences of ownership are traded on the public stock or bond
exchanges.
(h) All members of the board named, appointed or elected to the
board shall be fingerprinted and to submit to a state and national
criminal background check in accordance with K.S.A. 2025 Supp. 22-
4714, and amendments thereto. The committee, in accordance with
K.S.A. 75-4319, and amendments thereto, shall recess for a closed or
executive meeting to receive and discuss information received by the
committee pursuant to this subsection.
(i) All of the powers, duties and functions of the board of trustees
of the Kansas public employees retirement system as such board
existed prior to July 1, 1993, are hereby transferred to and conferred
and imposed upon the board of trustees established pursuant to this act.
The board of trustees of the Kansas public employees retirement
system established pursuant to this act shall be the successor in every
way of the powers, duties and functions of the board of trustees
existing prior to July 1, 1993, in which the same were vested prior to
July 1, 1993.
Sec. 12. K.S.A. 74-4967 is hereby amended to read as follows: 74-
4967. (1) Upon the basis of an annual actuarial valuation and appraisal
of the system conducted in the manner provided for in K.S.A. 74-4908,
and amendments thereto, the board shall certify, on or before July 15 of
SENATE BILL No. 435—page 15
each year to each participating employer an actuarially determined
estimate of the rate of contribution which that shall be required to be
paid by each such participating employer to pay all of the liabilities
which that shall accrue under the system from and after the entry date
as determined by the board, upon recommendation of the actuary. Such
rate shall be uniform for all participating employers, and shall be
comprised of a rate for benefits accruing after June 30, 1993, and a rate
for amortization of the additional liability for benefits provided by this
act which that is attributable to service rendered before July 1, 1993.
Such additional liability shall be amortized as determined by the board.
The employer's rate of contribution determined under this section shall
not include the costs of administration of the system.
(2) The board shall determine for each employer separately an
amount sufficient to amortize all liabilities for past service costs which
that shall have accrued at the time of entry into the system. On the basis
of such determination the board shall annually certify to each
participating employer separately an actuarially determined estimate of
the rate of contribution which that shall be required to be paid by that
participating employer to pay all of the liabilities for such past service
costs. Such rate shall be termed the employer's prior service
contribution. The board may enter into agreements with any
participating employer which that has employees or retirants under the
special pension systems established under K.S.A. 13-14a01 to through
13-14a14, inclusive, and amendments thereto or K.S.A. 14-10a01 to
through 14-10a15, inclusive, and amendments thereto, for the purpose
of scheduling the payment of such past service costs in an orderly
manner, which will tend to stabilize the annual total financial burden on
such employers in meeting their such employer's present and future
obligations under this system and such special systems, but in no event
shall the annual prior service contribution be less than the interest cost
on the total of such past service liability.
(3) Each participating employer shall appropriate and pay to the
system a sum sufficient to satisfy the obligations under this act as
certified by the board.
(4) Each participating employer is hereby authorized to pay the
employer's contribution from the same fund that the compensation for
which such contribution is made is paid from or from any other funds
available to it for such purpose. Each employer may levy annually at
the time of its levy of taxes , a tax which that may be in addition to all
other taxes authorized by law for the purpose of making its
contributions under this act, and, in the case of cities and counties, to
pay a portion of the principal and interest on bonds issued by cities
under the authority of K.S.A. 12-1774, and amendments thereto, for the
financing of redevelopment projects upon property located in such
county, which tax, together with any other fund available, shall be
sufficient to enable it to make such contribution. In lieu of levying the
tax authorized in this subsection, any taxing subdivision may pay such
costs from any employee benefits contribution fund established
pursuant to K.S.A. 12-16,102, and amendments thereto.
(5) Employer contributions shall in no way be limited by any other
act which that now or in the future establishes or limits the
compensation of any member.
(6) The rate of contribution certified to each participating
employer as provided in Each participating employer affiliating
pursuant to the provisions of this section shall apply during the fiscal
year of such participating employer which begins in the second
calendar year following the year of the actuarial valuation, but the rate
of contribution during the first year following the employer's entry date
shall be equal to 16% of the amount of compensation on which
SENATE BILL No. 435—page 16
members contribute during the year appropriate and pay to the system
a sum sufficient to satisfy the obligations hereunder certified by the
board.
(7) Each participating employer shall remit quarterly, or as the
board may otherwise provide, all employee deductions and required
employer contributions to the executive director for credit to the
Kansas public employees retirement fund within 20 days after the end
of the period covered by the remittance or within 25 days after forms or
written instructions from the system were mailed by the system to such
employer, whichever is later. Remittances of such deductions and
contributions received after such date are delinquent. Delinquent
payments due under this subsection (7) shall be subject to interest at the
rate established for interest on judgments under subsection (a) of
K.S.A. 16-204(a), and amendments thereto. At the request of the board,
delinquent payments which that are due or interest owed on such
payments, or both, may be deducted from any other moneys payable to
such employer by any department or agency of the state.
(8) Except as otherwise provided by law, the actuarial cost of any
legislation enacted by the Kansas legislature, except the actuarial cost
of K.S.A. 74-49,114a, shall be reflected in the employer contribution
rate in the fiscal year immediately following such enactment.
Sec. 13. K.S.A. 2025 Supp. 75-2263 is hereby amended to read as
follows: 75-2263. (a) (1) The state treasurer shall certify to the board of
trustees a portion of state moneys available for investment by the
pooled money investment board that is equivalent to the aggregate net
amount received for unclaimed property. The state treasurer may
transfer the amount certified to the board of trustees. All such moneys
shall be considered moneys in the state treasury for purposes of K.S.A.
75-6704, and amendments thereto.
(2) Subject to the provisions of subsection (h), the board of
trustees is responsible for the management and investment of that
portion of state moneys available for investment by the pooled money
investment board that is certified by the state treasurer to the board of
trustees as being equivalent to the aggregate net amount received for
unclaimed property and shall discharge the board's duties with respect
to such moneys solely in the interests of the state general fund and shall
invest and reinvest such moneys and acquire, retain, manage, including
the exercise of any voting rights and disposal of investments of such
moneys within the limitations and according to the powers, duties and
purposes as prescribed by this section.
(b) Moneys specified in subsection (a) shall be invested and
reinvested to achieve the investment objective, which is preservation of
such moneys and accordingly providing that the moneys are as
productive as possible, subject to the standards set forth in this section.
No such moneys shall be invested or reinvested if the sole or primary
investment objective is for economic development or social purposes or
objectives.
(c) In investing and reinvesting moneys specified in subsection (a)
and in acquiring, retaining, managing and disposing of investments of
the moneys, the board of trustees shall exercise the judgment, care,
skill, prudence and diligence under the circumstances then prevailing
that persons of prudence, discretion and intelligence acting in a like
capacity and familiar with such matters would use in the conduct of an
enterprise of like character and with like aims by diversifying the
investments of the moneys so as to minimize the risk of large losses,
unless under the circumstances it is clearly prudent not to do so, and
not in regard to speculation but in regard to the permanent disposition
of similar moneys, considering the probable income as well as the
probable safety of their capital.
SENATE BILL No. 435—page 17
(d) In the discharge of such management and investment
responsibilities the board of trustees may:
(1) Contract for the services of one or more professional
investment advisors or other consultants in the management and
investment of such moneys and otherwise in the performance of the
duties of the board of trustees under this section; and
(2) arrange for the custody of such moneys as the board of trustees
considers advisable with one or more member banks or trust companies
of the federal reserve system or with one or more banks in the state of
Kansas, or both, to be held in safekeeping by the banks or trust
companies for the collection of the principal and interest or other
income or of the proceeds of sale; and
(3) invest in United States dollar-denominated bonds, notes,
debentures or other similar obligations of a foreign government that
the international monetary fund lists as an industrial country and for
which the full faith and credit of such nation has been pledged for the
payment of principal and interest so long as such country shall be
rated at least A- or better by Standard and Poor's corporation, A3 or
better by Moody's investors service or A- or better by Fitch ratings or
an equivalent investment grade by a securities rating organization
accepted by the national association of insurance commissioners.
Investments shall only be allowed in a country that has never defaulted
on short-term or long-term debt obligations. The investment in such
foreign securities at any one time shall not exceed 5% of the cash
available for investment that may be invested pursuant to this section.
Under no circumstances shall investments be made in bonds, notes,
debentures or any similar obligations of any country of concern as
defined in K.S.A. 2025 Supp. 75-42b02, and amendments thereto.
(e) The board of trustees shall require that each person contracted
with under subsection (d) (1) or (2) to provide services shall obtain
commercial insurance that provides for errors and omissions coverage
for such person in an amount to be specified by the board of trustees.
The amount of such coverage specified by the board of trustees shall be
at least the greater of $500,000 or 1% of the funds entrusted to such
person up to a maximum of $10,000,000. The board of trustees shall
require a person contracted with under subsection (d) to provide
services to give a fidelity bond in a penal sum as may be fixed by law
or, if not so fixed, as may be fixed by the board of trustees, with
corporate surety authorized to do business in this state. Such persons
contracted with the board of trustees pursuant to subsection (d) and any
persons contracted with such persons to perform the functions specified
in subsection (b) shall be deemed to be fiduciary agents of the board of
trustees in the performance of contractual obligations.
(f) (1) Subject to the objective set forth in subsection (b) and the
standards set forth in subsection (c), the board of trustees shall
formulate and adopt policies and objectives for the investment and
reinvestment of such moneys and the acquisition, retention,
management and disposition of investments of the moneys. Such
policies and objectives shall be in writing and shall include:
(A) Specific asset allocation standards and objectives;
(B) establishment of criteria for evaluating the risk versus the
potential return on a particular investment; and
(C) a requirement that all investment advisors, and any managers
or others with similar duties and responsibilities as investment advisors,
shall immediately report all instances of default on investments to the
board of trustees and provide such board of trustees with
recommendations and options, including, but not limited to, curing the
default or withdrawal from the investment.
(2) The board of trustees shall review such policies and objectives,
SENATE BILL No. 435—page 18
make changes considered necessary or desirable and readopt such
policies and objectives on an annual basis.
(g) All interest or other income of the investments of the moneys
invested under this section, after payment of any management fees,
shall be deposited in the state treasury to the credit of the state general
fund.
(h) The state treasurer shall maintain the discretionary authority to
liquidate some or a portion of such moneys transferred to the board of
trustees pursuant to subsection (a) for:
(1) Investment by the pooled money investment board; or
(2) necessary payments to owners as defined in K.S.A. 58-
3934(m), and amendments thereto.
(i) As used in this section:
(1) "Board of trustees" means the board of trustees of the Kansas
public employees retirement system established by K.S.A. 74-4905,
and amendments thereto.
(2) "Fiduciary" means a person who, with respect to the moneys
invested under this section:
(A) Exercises any discretionary authority with respect to
administration of the moneys;
(B) exercises any authority to invest or manage such moneys or
has any authority or responsibility to do so;
(C) provides investment advice for a fee or other direct or indirect
compensation with respect to such moneys or has any authority or
responsibility to do so;
(D) provides actuarial, accounting, auditing, consulting, legal or
other professional services for a fee or other direct or indirect
compensation with respect to such moneys or has any authority or
responsibility to do so; or
(E) is a member of the board of trustees or of the staff of the board
of trustees.
(3) "Pooled money investment board" means the pooled money
investment board established by K.S.A. 75-4221a, and amendments
thereto.
Sec. 14. K.S.A. 75-4201 is hereby amended to read as follows: 75-
4201. As used in this act, unless the context otherwise requires:
(a) "Treasurer" means state treasurer.
(b) "Controller" means director of accounts and reports.
(c) "Board" means the pooled money investment board.
(d) "Bank" means a bank incorporated under the laws of this state ,
or organized under the laws of the United States or another state and
which has a main or branch office in this state.
(e) "State moneys" means all moneys in the treasury of the state or
coming lawfully into the possession of the treasurer.
(f) "State bank account" means state moneys or fee agency
account moneys deposited in accordance with the provisions of this act.
(g) "Operating account" means a state bank account which that is
payable or withdrawable, in whole or in part, on demand.
(h) "Investment account" means a state bank account which that is
not payable on demand.
(i) "Fee agency account" means a state bank account of any state
agency consisting of moneys authorized by law prior to remittance to
the state treasurer.
(j) "Disbursement" means a payment of any kind whatsoever
made from the state treasury or from any operating account, except
transfer of moneys between or among operating accounts and
investment accounts or either or both of them.
(k) "Securities" means, for the purposes of this section and K.S.A.
75-4218, and amendments thereto, securities, security entitlements,
SENATE BILL No. 435—page 19
financial assets and securities account consisting of any one or more of
the following, and security entitlements thereto, which may be accepted
or rejected by the pooled money investment board:
(1) Direct obligations of, or obligations that are insured as to
principal and interest by, the United States government or any agency
thereof and obligations, letters of credit and securities of United States
sponsored enterprises which under federal law may be accepted as
security for public funds.
(2) Kansas municipal bonds which are general obligations of the
municipality issuing the same.
(3) Revenue bonds of any agency or arm of the state of Kansas.
(4) Revenue bonds of any municipality, as defined by K.S.A. 10-
101, and amendments thereto, within the state of Kansas or bonds
issued by a public building commission as authorized by K.S.A. 12-
1761, and amendments thereto, if approved by the state bank
commissioner, except (A) bonds issued under the provisions of K.S.A.
12-1740 et seq., and amendments thereto, unless such bonds are rated
at least MIG-1 or Aa by Moody's Investors Service or AA by Standard
& Poor's Corp. and (B) bonds secured by revenues of a utility which
has been in operation for less than three years. Any expense incurred in
connection with granting approval of revenue bonds shall be paid by
the applicant for approval.
(5) Temporary notes of any municipal corporation or quasi-
municipal corporation within the state of Kansas which are general
obligations of the municipal corporation or quasi-municipal corporation
issuing the same.
(6) Warrants of any municipal corporation or quasi-municipal
corporation within the state of Kansas the issuance of which is
authorized by the state board of tax appeals and which are payable from
the proceeds of a mandatory tax levy.
(7) Bonds of any municipal or quasi-municipal corporation of the
state of Kansas which have been refunded in advance of their 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. A
copy of such escrow agreement shall be furnished to the treasurer.
(8) Securities listed in paragraph (14) of subsection (d) of K.S.A.
9-1402, and amendments thereto, within limitations of K.S.A. 9-1402,
and amendments thereto.
(9) A corporate surety bond guaranteeing deposits in a bank,
savings or savings and loan association in excess of federal deposit
insurance corporation insurance, underwritten by an insurance
company authorized to do business in the state of Kansas.
(10) 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.
(11) All of such securities shall be current as to interest according
to the terms thereof the securities listed in K.S.A. 9-1402(c)(1) through
(14), and amendments thereto, which may be accepted or rejected by
the pooled money investment board.
(l) "Savings bank" means a savings bank organized under the laws
of the United States or another state insured by the federal deposit
insurance corporation or its successor and having a main or branch
office in the county in which a state agency making collection of any
fees, tuition, or charges is located.
(m) "Savings and loan association" means a savings and loan
association incorporated under the laws of this state or organized under
the laws of the United States or another state, insured by the federal
SENATE BILL No. 435—page 20
deposit insurance corporation or its successor and having a main or
branch office in the county in which a state agency making collection
of any fees, tuition or charges is located.
(n) "Custodial bank" means a bank holding on deposit collateral
which that is security for state bank accounts.
(o) "Centralized securities depository" means a clearing agency
registered with the securities and exchange commission which that
provides safekeeping and book-entry settlement services to its
participants.
(p) "Depository bank" means a bank, savings bank or savings and
loan association authorized and eligible to receive state moneys.
(q) "Main office" means the place of business specified in the
articles of association, certificate of authority or similar document,
where the business of the institution is carried on and which is not a
branch.
(r) "Branch" means any office, agency or other place of business
within this state, other than the main office, at which deposits are
received, checks paid or money lent with approval of the appropriate
regulatory authorities. "Branch" does not include an automated teller
machine, remote service unit or similar device.
(s) "Securities," "security "Security entitlements," "financial
assets," "securities account," "security agreement," "security interest,"
"perfection" and "control" shall have the meanings given mean the
same as such terms are defined under the Kansas uniform commercial
code.
Sec. 15. K.S.A. 2025 Supp. 75-4218 is hereby amended to read as
follows: 75-4218. (a) All state bank accounts shall be secured as
provided in this section.
The bank, savings bank or savings and loan association receiving or
having a state bank account shall 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
state of Kansas, in the manner provided in this act, securities owned by
the depository bank directly or indirectly through its agent or trustee
holding securities on its behalf, or owned by the depository bank's
wholly-owned subsidiary or by such affiliate, the market value of
which is equal to 100% 102% of the amount of the account plus
accrued interest , less that portion of the amount of the account plus
accrued interest which that is insured by the federal deposit insurance
corporation or its successor.
(b) All securities securing state bank accounts shall be deposited
in a securities account with a bank any custodial bank or trust company
as described in K.S.A. 9-1405(b), and amendments thereto, having the
prior approval of the board, a credit union having the prior approval of
the board , the federal home loan bank of Topeka or with the state
treasurer pursuant to a written custodial agreement, and a receipt taken
therefor with one copy going to the treasurer and one copy going to the
bank, savings bank or savings and loan association which that has
secured such state bank account. The receipt shall identify the securities
which that are subject to a security interest to secure payment of the
state bank account. This section shall not prohibit any custodial bank
receiving securities on deposit from issuing a receipt and depositing
securities identified in the receipt in such bank's account with any bank
chartered in Kansas or any other state, any trust company chartered in
Kansas or any other state, any national bank, or any centralized
securities depository wherever located within the United States. No
securities securing state bank accounts shall be deposited in any bank,
trust company or national bank which that is owned directly or
SENATE BILL No. 435—page 21
indirectly by any parent corporation of the depository bank, or with any
bank, trust company, or national bank having common controlling
shareholders, having a common majority of the board of directors or
having common directors with the ability to control or influence
directly or indirectly the acts or policies of the bank, savings and loan
association or savings bank securing such state bank account. Any
custodial bank which that releases securities securing a state bank
account without being authorized to do so under the custodial
agreement shall be liable to the state for any loss to the state resulting
therefrom.
(c) Securities securing state bank accounts may be deposited with
the federal reserve bank of Kansas City to be there held in such manner,
under regulations and operating letters of the federal reserve bank, as to
secure payment of the state bank account in the depository bank.
(d) The depository bank, and any agent, trustee, wholly-owned
subsidiary or affiliate having identical ownership granting a security
interest shall enter into a written agreement with the state of Kansas
granting the state of Kansas a security interest in the securities to secure
payment of the state bank account. Such security interest shall be
perfected by the depository bank and any agent, trustee, wholly-owned
subsidiary or affiliate having identical ownership granting a security
interest causing control of the securities under the Kansas uniform
commercial code to be given to the state of Kansas. The security
agreement and the custodial agreement shall be in writing, executed by
all parties thereto, maintained as part of their official records , and,
except for the state of Kansas, approved by their boards of directors or
their loan committees, which. Such approvals shall be reflected in the
minutes of the boards or committees.
Sec. 16. K.S.A. 9-1401, 9-1403, 9-1405, 9-1406, 9-1407, 9-1408,
74-4915b, 74-4915c, 74-4967 and 75-4201 and K.S.A. 2025 Supp. 9-
1402, 9-1410, 12-1675, 74-4905 , 75-2263 and 75-4218 are hereby
repealed.
SENATE BILL No. 435—page 22
Sec. 17. 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
SENATE, and passed that body
__________________________
SENATE adopted
Conference Committee Report ________________
_________________________
President of the Senate.
_________________________
Secretary of the Senate.
Passed the HOUSE
as amended _________________________
HOUSE adopted
Conference Committee Report ________________
_________________________
Speaker of the House.
_________________________
Chief Clerk of the House.
APPROVED _____________________________
_________________________
Governor.