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As Amended by Senate Committee
Session of 2026
SENATE BILL No. 524
By Committee on Assessment and Taxation
3-3
AN ACT concerning public moneys; relating to the deposit and investment
thereof; requiring banks, savings and loans 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; modifying certain definitions; 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 if accounts are subject to
conflicting federal law; amending K.S.A. 9-1401, 9-1403, 9-1405, 9-
1406, 9-1407, 9-1408 and 75-4201 and K.S.A. 2025 Supp. 9-1402, 9-
1410, 12-1675 and 75-4218 and repealing the existing sections.
Be it enacted by the Legislature of the State of Kansas:
Section 1. 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
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SB 524—Am. by SC 2
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 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
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SB 524—Am. by SC 3
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. 2. 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 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
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SB 524—Am. by SC 4
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;
(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
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SB 524—Am. by SC 5
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
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SB 524—Am. by SC 6
or any county, municipality or other political subdivision of the state In
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. 3. 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 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. 4. 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
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SB 524—Am. by SC 7
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
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
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SB 524—Am. by SC 8
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. 5. 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. 6. 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 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
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(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. 7. 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. 8. 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
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SB 524—Am. by SC 10
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 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
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SB 524—Am. by SC 11
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 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 10th 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
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SB 524—Am. by SC 12
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 The
treasurer may assess a fee to be used solely to operate the public moneys
pooled method that is. 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 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. 9. 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
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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
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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 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
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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) 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),
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an investing governmental unit shall allow an eligible financial institution
two business days to respond to the bid.
Sec. 10. 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,
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
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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 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
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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. 11. 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
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SB 524—Am. by SC 19
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 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. 12. K.S.A. 9-1401, 9-1403, 9-1405, 9-1406, 9-1407, 9-1408 and
75-4201 and K.S.A. 2025 Supp. 9-1402, 9-1410, 12-1675 and 75-4218 are
hereby repealed.
Sec. 13. This act shall take effect and be in force from and after its
publication in the statute book.
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