SB 524

                     As Amended by Senate Committee
 Session of 2026
                       SENATE BILL No. 524
                   By Committee on Assessment and Taxation
                                     3-3
1 AN ACT concerning public moneys; relating to the deposit and investment
2   thereof; requiring banks, savings and loans associations and savings
3   banks to enter into a written agreement with the state treasurer to be a
4   depository of public moneys; increasing the market value of securities
5   necessary to secure the deposit of public moneys; providing procedures
6   for when a depository fails to follow the requirements of the state
7   treasurer; modifying certain definitions; authorizing the state treasurer
8   to assess a fee to operate the public moneys pooled method; creating
9   the public moneys fee fund of the state treasurer; providing exceptions
10   to the public moneys pooled method if accounts are subject to
11   conflicting federal law; amending K.S.A. 9-1401, 9-1403, 9-1405, 9-
12   1406, 9-1407, 9-1408 and 75-4201 and K.S.A. 2025 Supp. 9-1402, 9-
13   1410, 12-1675 and 75-4218 and repealing the existing sections.
14
15 Be it enacted by the Legislature of the State of Kansas:
16     Section 1. K.S.A. 9-1401 is hereby amended to read as follows: 9-
17 1401. (a) The governing body of any municipal corporation or quasi-
18 municipal corporation shall designate by official action, recorded upon the
19 governing body's minutes, the banks, savings and loan associations and
20 savings banks which that shall serve as depositories of the governing
21 body's funds, and the officer and official having the custody of such funds
22 shall not deposit such funds other than at such designated banks, savings
23 and loan associations and savings banks. The banks, savings and loan
24 associations and savings banks which that have main or branch offices in
25 the county or counties in which all or part of such municipal corporation or
26 quasi-municipal corporation is located shall be designated as such official
27 depositories if the municipal or quasi-municipal corporation can obtain
28 satisfactory security therefor.
29     (b) Every officer or person depositing public funds shall deposit all
30 such public funds coming into the officer's or person's possession in their
31 name and official title as such officer. If the governing body of the
32 municipal corporation or quasi-municipal corporation fails to designate an
33 official depository or depositories, the officer thereof having custody of
34 the governing body's funds shall deposit such funds with one or more
35 banks, savings and loan associations or savings banks which that have
36 main or branch offices in the county or counties in which all or part of
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1 such municipal corporation or quasi-municipal corporation is located if
2 satisfactory security can be obtained therefor. If the officer having custody
3 is unable to obtain satisfactory security at a depository within the county
4 or counties where the governing body is located, then the officer may
5 deposit funds elsewhere. If the governing body's funds are deposited
6 elsewhere, the officer shall serve notice in writing on the governing body
7 showing the names and locations of the banks, savings and loan
8 associations and savings banks where the funds are deposited, and upon so
9 doing the officer having custody of the funds shall not be liable for the loss
10 of any portion thereof except for official misconduct or for the
11 misappropriation of such funds by such officer.
12     (c) If eligible banks, savings and loan associations or savings banks
13 under subsections subsection (a) or (b) cannot or will not provide an
14 acceptable bid, which shall include services, for the depositing of public
15 funds under this section, then banks, savings and loan associations or
16 savings banks which that have main or branch offices in an adjoining
17 county to the county in which all or part of such municipal or quasi-
18 municipal corporation is located may receive deposits of such municipal
19 corporation or quasi-municipal corporation, if such banks, savings and
20 loan associations or savings banks have been designated as official
21 depositories under subsection (a), and the municipal corporation or quasi-
22 municipal corporation can obtain state treasurer may receive satisfactory
23 security therefor.
24     (d) The depository bank, savings and loan association or savings bank
25 and any agent, trustee, wholly owned subsidiary or affiliate having
26 identical ownership granting a security interest shall enter into a written
27 agreement with the municipal corporation or quasi-municipal corporation
28 which so state treasurer in accordance with K.S.A. 2025 Supp. 9-1410,
29 and amendments thereto, that designates the bank as a depository for the
30 municipal corporation or quasi-municipal corporation's public moneys.
31     (1) The agreement shall secure the public moneys of the municipal
32 corporation or quasi-municipal corporation by granting a security interest
33 in securities held by the depository bank, savings and loan association or
34 savings bank and any agent, trustee, wholly owned subsidiary or affiliate
35 having identical ownership pursuant to K.S.A. 9-1402, and amendments
36 thereto.
37     (2) The depository bank, savings and loan association or savings bank
38 and any agent, trustee, wholly owned subsidiary or affiliate having
39 identical ownership shall perfect the security interest causing control to be
40 given to the municipal corporation or quasi-municipal corporation state
41 treasurer in accordance with the Kansas uniform commercial code K.S.A.
42 2025 Supp. 9-1410, and amendments thereto.
43     (3) The security agreement shall be in writing, executed by all parties
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1 thereto, maintained as part of the parties' official records, and except for
2 the municipal corporations or quasi-municipal corporations, approved by
3 the boards of directors or loan committees, which approvals shall be
4 reflected in the minutes of the boards or committees.
5     Sec. 2. K.S.A. 2025 Supp. 9-1402 is hereby amended to read as
6 follows: 9-1402. (a) Before any deposit of public moneys or funds shall be
7 made by any governmental unit of the state of Kansas with any bank,
8 savings and loan association or savings bank, such governmental unit shall
9 obtain security for such deposit in one of the following manners prescribed
10 by this section.
11     (b) Such bank, savings and loan association or savings bank may give
12 a corporate surety bond of some surety corporation authorized to do
13 business in this state. Such bond shall be in an amount equal to the public
14 moneys or funds on deposit at any given time less the amount of such
15 public moneys or funds that is insured by the federal deposit insurance
16 corporation or its successor and such bond shall be conditioned that such
17 deposit shall be paid promptly on the order of the governmental unit
18 making such deposits.
19     (c) Such bank, savings and loan association or savings bank may
20 deposit, maintain, pledge, assign and grant a security interest in, or cause
21 its agent, trustee, wholly owned subsidiary or affiliate having identical
22 ownership to deposit, maintain, pledge, assign and grant a security interest
23 in, for the benefit of the governing body of the governmental unit
24 municipal corporation or quasi-municipal corporation in the manner
25 provided in this section, securities, security entitlements, financial assets
26 and securities accounts owned by the depository institution directly or
27 indirectly through the institution's agent or trustee holding securities on the
28 institution's behalf, or owned by the depository institutions institution's
29 wholly owned subsidiary or by such affiliate, the market value of which is
30 equal to 100% 102% of the total deposits at any given time, and such
31 securities, security entitlements, financial assets and securities accounts,
32 may be accepted or rejected by the governing body of the governmental
33 unit pooled money investment board and shall consist of the following and
34 security entitlements thereto:
35     (1) Direct obligations of, or obligations that are insured as to principal
36 and interest by, the United States of America or any agency thereof and
37 obligations, including, but not limited to, letters of credit and securities of
38 United States-sponsored corporations that under federal law may be
39 accepted as security for public funds;
40     (2) bonds of any governmental unit municipal corporation or quasi-
41 municipal corporation of the state of Kansas that have been refunded in
42 advance of the bonds' maturity and are fully secured as to payment of
43 principal and interest thereon by deposit in trust, under escrow agreement
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1 with a bank, of direct obligations of, or obligations the principal of and the
2 interest on which are unconditionally guaranteed by, the United States of
3 America;
4     (3) bonds of the state of Kansas;
5     (4) general obligation bonds of any governmental unit municipal
6 corporation or quasi-municipal corporation of the state of Kansas;
7     (5) revenue bonds of any governmental unit municipal corporation
8 or quasi-municipal corporation of the state of Kansas if approved by the
9 commissioner;
10     (6) temporary notes of any governmental unit municipal corporation
11 or quasi-municipal corporation of the state of Kansas that are general
12 obligations of the governmental unit municipal corporation or quasi-
13 municipal corporation issuing such temporary notes;
14     (7) warrants of any governmental unit municipal corporation or
15 quasi-municipal corporation of the state of Kansas the issuance of which
16 is if issuance are authorized by the state board of tax appeals and that are
17 payable from the proceeds of a mandatory tax levy;
18     (8) bonds of either a Kansas not-for-profit corporation or of a local
19 housing authority that are rated at least Aa by Moody's investors service or
20 AA by Standard & Poor's corp.;
21     (9) bonds issued pursuant to K.S.A. 12-1740 et seq., and amendments
22 thereto, that are rated at least MIG-1 or Aa by Moody's investors service or
23 AA by Standard & Poor's corp.;
24     (10) notes of a Kansas not-for-profit corporation that are issued to
25 provide only the interim funds for a mortgage loan that is insured by the
26 federal housing administration;
27     (11) bonds issued pursuant to K.S.A. 74-8901 through 74-8916, and
28 amendments thereto;
29     (12) bonds issued pursuant to K.S.A. 68-2319 through 68-2330, and
30 amendments thereto;
31     (13) commercial paper that does not exceed 270 days to maturity and
32 has received one of the two highest commercial paper credit ratings by a
33 nationally recognized investment rating firm; or
34     (14) (A) negotiable promissory notes together with first lien
35 mortgages on one to four family residential real estate located in Kansas
36 securing payment of such notes when such notes or mortgages:
37     (i) Are underwritten by the federal national mortgage association, the
38 federal home loan mortgage corporation, the federal housing
39 administration or the veterans administration standards;
40     (ii) have been in existence with the same borrower for at least two
41 years and with no history of any installment being unpaid for 30 days or
42 more; and
43     (iii) are valued at not to exceed 50% of the lesser of the following
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1 three values: Outstanding mortgage balance, current appraised value of the
2 real estate or discounted present value based upon current federal national
3 mortgage association or government national mortgage association interest
4 rates quoted for conventional, federal housing administration or veterans
5 administration mortgage loans.
6     (B) Securities under subparagraph (A) shall be taken at their value for
7 not more than 50% of the security required under the provisions of this
8 section.
9     (C) Securities under subparagraph (A) shall be withdrawn
10 immediately from the collateral pool if any installment is unpaid for 30
11 days or more.
12     (D) A status report on all such loans shall be provided to the investing
13 governmental entity by the financial institution on a quarterly basis.
14     (d) Such bank, savings and loan association or savings bank shall
15 secure the deposit of public moneys of one or more governmental units
16 through the public moneys pooled method pursuant to K.S.A. 2025 Supp.
17 9-1410, and amendments thereto, for the benefit of the governmental unit
18 having public moneys with such bank, savings and loan association or
19 savings bank as provided in K.S.A. 2025 Supp. 9-1410, and amendments
20 thereto.
21     (e) No such bank, savings and loan association or savings bank may
22 deposit and maintain for the benefit of the governing body of a
23 governmental unit of the state of Kansas, any securities that consist of:
24     (1) Bonds secured by revenues of a utility that has been in operation
25 for less than three years; or
26     (2) bonds issued under K.S.A. 12-1740 et seq., and amendments
27 thereto, unless such bonds have been refunded in advance of their maturity
28 as provided in subsection (c) or such bonds are rated at least Aa by
29 Moody's investors service or AA by Standard & Poor's corp.
30     (f) Any applicant requesting approval of a revenue bond pursuant to
31 subsection (c)(5) shall pay to the commissioner a fee in an amount
32 established pursuant to K.S.A. 9-1726, and amendments thereto, to defray
33 the expenses of the commissioner in the examination and investigation of
34 the application. The commissioner shall remit all amounts received under
35 this section to the state treasurer in accordance with the provisions of
36 K.S.A. 75-4215, and amendments thereto. Upon receipt of each such
37 remittance, the state treasurer shall deposit the entire amount in the state
38 treasury to the credit of the bank investigation fund. The moneys in the
39 bank investigation fund shall be used to pay the expenses of the
40 commissioner in the examination and investigation of such applications
41 and any unused balance shall be transferred to the bank commissioner fee
42 fund.
43     (g) For purposes of this section, "governmental unit" means the state
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1 or any county, municipality or other political subdivision of the stateIn
2 cases where a depository fails to meet the requirements established by the
3 state treasurer, the state treasurer shall instruct the governmental unit that
4 such governmental unit shall select one of the following options:
5     (1) Close the account for the full amount, including accrued interest,
6 without penalty if the deposit exceeds seven days; or
7     (2) convert the account to a repurchase agreement under terms
8 acceptable to the state treasurer.
9     Sec. 3. K.S.A. 9-1403 is hereby amended to read as follows: 9-1403.
10 (a) During the periods of peak deposits occurring at tax paying time and
11 tax distributing time and continuing for a period of not to exceed 60
12 continuous days at any given time and not to exceed 120 days in any
13 calendar year, the amount of security for the deposits of municipal
14 corporations or quasi-municipal corporations governmental units as
15 required under K.S.A. 9-1402, and amendments thereto, may be reduced
16 by up to 50% of the amount on deposit during the peak period.
17     (b) If the custodian of the funds of each municipal corporation or
18 quasi-municipal corporation governmental unit together with an officer of
19 the depository bank, savings and loan association or savings bank and the
20 state treasurer agree to reduce the amount of security as provided in
21 subsection (a), then the parties shall enter into an agreement which that
22 designates in writing the beginning and end of each such period, and a
23 copy thereof, fully executed, shall be kept on file in the:
24     (1) Office of the governing body of such municipal corporation or
25 quasi-municipal corporation and in the governmental unit;
26     (2) files of such bank, savings and loan association or savings bank;
27 and
28     (3) office of the state treasurer.
29     Sec. 4. K.S.A. 9-1405 is hereby amended to read as follows: 9-1405.
30 (a) All bonds and securities given by any bank, savings and loan
31 association or savings bank to secure public moneys of the United States
32 or any board, commission or agency thereof, shall be deposited as required
33 by the United States government or any designated federal agencies.
34     (b) All securities, security entitlements and financial assets securing
35 the deposits of any municipal corporation or quasi-municipal corporation
36 governmental unit shall be deposited as described in subsection (c) or (d)
37 or in a securities account with one of the following custodial banks or trust
38 companies:
39     (1) A Kansas state bank;
40     (2) a Kansas national bank;
41     (3) a state bank organized in another state and which that has a
42 branch office in this state;
43     (4) a trust company incorporated under the laws of this state or
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1 another state; or
2     (5) the federal home loan bank of Topeka.
3     (c) Securities, security entitlements and financial assets securing the
4 deposits of any municipal corporation or quasi-municipal corporation
5 governmental unit may be deposited with the state treasurer pursuant to a
6 written custodial agreement and a receipt issued with one copy going to
7 the municipal corporation or quasi-municipal corporation governmental
8 unit making the public deposit and one copy going to the bank, savings
9 and loan association or savings bank which that has secured such public
10 deposits. The receipt shall identify the securities, security entitlements and
11 financial assets which that are subject to a security interest to secure
12 payment of the deposits of the municipal corporation or quasi-municipal
13 corporation governmental unit.
14     (d) Securities, security entitlements and financial assets securing the
15 deposits of any municipal corporation or quasi-municipal corporation
16 governmental unit may be deposited with the federal reserve bank of
17 Kansas City to be there held in such manner, under regulations and
18 operating letters of the federal reserve bank of Kansas City, as to secure
19 payment of the deposits of the municipal corporation or quasi-municipal
20 corporation governmental unit in the depository institution.
21     (e) This section shall not prohibit any custodial bank or trust
22 company from depositing securities, security entitlements and financial
23 assets in the custodial bank or trust company's account if:
24     (1) The custodial bank or trust company's account is located at a bank
25 or trust company organized under the laws of any state, the United States
26 or any centralized securities depository wherever located within the United
27 States; and
28     (2) the custodial bank or trust company issues a receipt which that
29 identifies the securities, security entitlements and financial assets on
30 deposit at the custodial bank or trust company.
31     (f) No securities, security entitlements and financial assets securing
32 public deposits shall be deposited in any custodial bank or trust company
33 which that has the following commonalities with the depository bank,
34 savings and loan association or savings bank:
35     (1) Direct or indirect ownership by any parent corporation;
36     (2) common controlling shareholders;
37     (3) common majority of the board of directors; or
38     (4) common directors with the ability to control or influence directly
39 or indirectly the acts or policies of the depository bank, savings and loan
40 association or savings bank securing such public deposits.
41     (g) When securities, security entitlements and financial assets are
42 deposited with the state treasurer as authorized by this section, the state
43 treasurer shall make a charge for such service which that is equivalent to
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1 the reasonable and customary charge made therefor.
2     (h) The custodial agreement shall be in writing, executed by all
3 parties thereto, maintained as part of the parties' official records, and,
4 except for the municipal corporations or quasi-municipal corporation
5 governmental unit, approved by the boards of directors or loan
6 committees, which. Such approvals shall be reflected in the minutes of the
7 boards or committees.
8     (i) A bank, savings and loan association or savings bank which that
9 fails to pay any deposit of public moneys of any municipal or quasi-
10 municipal corporation governmental unit according to the terms of the
11 security agreement shall immediately take action to enable bonds and
12 securities pledged to secure the deposit to be sold to satisfy the bank's or
13 association's obligation to the municipal or quasi-municipal corporation
14 governmental unit.
15     Sec. 5. K.S.A. 9-1406 is hereby amended to read as follows: 9-1406.
16 No public officer nor or the sureties upon such officer's bond shall be
17 liable for any loss sustained by the failure or default of any designated
18 depository or depositories after a deposit or deposits have been made in an
19 officially designated bank, savings and loan association or savings bank as
20 provided in this act article 14 of chapter 9 of the Kansas Statutes
21 Annotated, and amendments thereto. This Such exemption from liability
22 shall apply even though other statutes shall require the furnishing of a
23 bond or other securities by the designated depositories of public moneys.
24 This Such exemption shall also apply whenever a public officer, municipal
25 corporation or quasi-municipal corporation or governmental unit has acted
26 in good faith to comply with the provisions of this act article 14 of chapter
27 9 of the Kansas Statutes Annotated, and amendments thereto.
28     Sec. 6. K.S.A. 9-1407 is hereby amended to read as follows: 9-1407.
29 (a) That portion of any deposit of public moneys or funds which that is
30 insured by the federal deposit insurance corporation, or its successor, need
31 not be secured as provided in article 14 of chapter 9 of the Kansas Statutes
32 Annotated, and amendments thereto.
33     (b) Public moneys or funds deposited by a municipal corporation or
34 quasi-municipal corporation governmental unit in a selected bank, savings
35 and loan association or savings bank which that are part of a reciprocal
36 deposit program shall not be treated as securities and need not be secured
37 as provided in article 14 of chapter 9 of the Kansas Statutes Annotated,
38 and amendments thereto, if the:
39     (1) Bank, savings and loan association or savings bank receives
40 reciprocal deposits from other participating institutions located in the
41 United States in an amount equal to the amount of funds deposited by the
42 municipal corporation or quasi-municipal corporation governmental unit;
43 and
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1     (2) total cumulative amount of each deposit does not exceed the
2 maximum deposit insurance amount for one depositor at one financial
3 institution as determined by the federal deposit insurance corporation.
4     Sec. 7. K.S.A. 9-1408 is hereby amended to read as follows: 9-1408.
5 As used in article 14 of chapter 9 of the Kansas Statutes Annotated, and
6 amendments thereto:
7     (a) "Branch" means any office within this state or another state, other
8 than the main office, that is approved as a branch by a federal or state
9 supervisory agency and at which deposits are received, checks paid or
10 money lent. "Branch" does not include an automated teller machine,
11 remote service unit or similar device, a loan production office or a deposit
12 production office;
13     (b) "centralized securities depository" means a clearing agency
14 registered with the securities and exchange commission which that
15 provides safekeeping and book-entry settlement services to the agency's
16 participants;
17     (c) "governmentgovernmental unit" means any state, county,
18 municipality or other political subdivision thereof;
19     (d) "Kansas national bank" means a federally chartered bank which
20 that has a main office or branch located in this state;
21     (e) "Kansas state bank" means a Kansas state chartered bank;
22     (f) "main office" means the place of business specified in the articles
23 of association, certificate of authority or similar document where the
24 business of the institution is carried on and which is not a branch;
25     (g) "municipal corporation" or "quasi-municipal corporation"
26 includes each investing governmental unit under K.S.A. 12-1675, and
27 amendments thereto;
28     (h) "savings and loan association" means any savings and loan
29 association incorporated under the laws of this state or any other state or
30 organized under the laws of the United States and which has a main or
31 branch office in this state;
32     (i) "savings bank" means any savings bank organized under the laws
33 of the United States and which has a main or branch office in this state;
34 and
35     (j) "securities," "security entitlements," "financial assets," "securities
36 account," "security agreement," "security interest," "perfection" and
37 "control" shall have the meanings given such terms under mean the same
38 as defined in the Kansas uniform commercial code.
39     Sec. 8. K.S.A. 2025 Supp. 9-1410 is hereby amended to read as
40 follows: 9-1410. (a) For purposes of K.S.A. 2025 Supp. 9-1410 through 9-
41 1412, and amendments thereto:
42     (1) "Administrator" means the treasurer or the treasurer's designee.
43     (2) "Governmental unit" means the state or any county, municipality
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1 or other political subdivision thereof.
2     (3) "Public moneys" means the same as defined in K.S.A. 9-701, and
3 amendments thereto.
4     (4)(3) "Public moneys pooled method" or "pool of securities" means
5 shares of investment companies registered under the federal investment
6 company act of 1940 when the investment companies' assets are limited to
7 obligations that are eligible for investment by the bank, savings and loan
8 association or savings bank and limited by their prospectuses to owning
9 securities enumerated in K.S.A. 9-1402(c) a pool of eligible securities
10 used by a bank, savings and loan association or savings bank to secure the
11 deposit of public moneys in excess of the amount insured or guaranteed by
12 the federal deposit insurance corporation pursuant to K.S.A. 9-1402 and
13 12-1675, and amendments thereto.
14     (5)(4) "Treasurer" means the state treasurer.
15     (b) A bank, savings and loan association or savings bank designated
16 as a public depositary shall secure the deposit of public moneys in excess
17 of the amount insured or guaranteed by the federal deposit insurance
18 corporation pursuant to K.S.A. 9-1402 and 12-1675, and amendments
19 thereto, by the public moneys pooled method. A bank, savings and loan
20 association or savings bank designated as a public depositary shall secure
21 the deposits of one or more governmental units by depositing, pledging or
22 granting a security interest in a pool of securities to secure the repayment
23 of all public moneys deposited in such bank, savings and loan association
24 or savings bank by such governmental units and not otherwise secured
25 pursuant to law, if at all times the aggregate market value on such pool of
26 securities so deposited, pledged or in which a security interest is granted is
27 equal to at least 102% of the amount on deposit that is in excess of the
28 amount so insured or guaranteed. Each such bank, savings and loan
29 association or savings bank shall carry on such bank's or association's
30 accounting records a general ledger or other appropriate accounting of the
31 total amount of all public moneys to be secured by the pool of securities as
32 determined at the opening of each business day and the aggregate market
33 value of the pool of securities deposited, pledged or in which a security
34 interest is granted to secure such public moneys.
35     (c) The treasurer may serve as the administrator with respect to a
36 public moneys pooled method or may designate a bank, savings and loan
37 association, savings bank, trust company or other qualified firm,
38 corporation or association that is authorized to transact business in this
39 state to serve as the administrator. The administrator shall not accept
40 public deposits from a governmental unit while administering the public
41 moneys pooled method pursuant to this section. The administrator shall
42 submit a formal conflict of interest document in a manner prescribed by
43 the treasurer. Expenses of such administrator shall be paid by the office of
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1 the state treasurer.
2     (d) The administrator shall be tasked with assessing and managing
3 the sufficiency of the public moneys pooled method, including, but not
4 limited to, the compliance by a bank, savings and loan association or
5 savings bank that the aggregate market value of the pool of securities of
6 such bank, savings and loan association or savings bank is an amount of
7 not less than 102% of the total amount of public moneys or public funds
8 less the portion of such public moneys or funds insured or guaranteed by
9 the federal deposit insurance corporation and pursuant to K.S.A. 9-1402
10 and 12-1675, and amendments thereto. To fulfill the duties of K.S.A. 2025
11 Supp. 9-1410 through 9-1412, and amendments thereto, the treasurer may
12 adopt rules and regulations to administer and implement the provisions of
13 K.S.A. 2025 Supp. 9-1410 through 9-1412, and amendments thereto,
14 including, but not limited to, rules and regulations to assess and manage
15 the sufficiency of the public moneys pooled method.
16     (e) A bank, savings and loan association or savings bank in which
17 public moneys or public funds are deposited may at any time substitute,
18 exchange or release securities deposited if such substitution, exchange or
19 release does not reduce the aggregate market value of the pool of securities
20 to an amount that is less than 102% of the total amount of public moneys
21 or public funds less the portion of such public moneys or funds insured or
22 guaranteed by the federal deposit insurance corporation and pursuant to
23 K.S.A. 9-1402 and 12-1675, and amendments thereto. Such bank, savings
24 and loan association or savings bank shall notify the administrator if
25 additional collateral is required to be pledged due to an increase in
26 deposits placed by the governmental unit. Such bank, savings and loan
27 association or savings bank shall notify the administrator if such bank,
28 savings and loan association or savings bank desires to release collateral
29 due to a reduction in governmental unit deposits.
30     (f) Each bank, savings and loan association or savings bank that
31 satisfies its requirement to secure the deposit of public moneys or public
32 funds in excess of the amount insured or guaranteed by the federal deposit
33 insurance corporation by depositing, pledging or granting a security
34 interest in a single pool of securities, or any combination thereof, shall, on
35 or before the 10th day of each month, render to the administrator a
36 statement showing as of the last business day of the previous month the:
37     (1) Amount of public moneys or public funds deposited in such bank,
38 savings and loan association or savings bank that is not insured or
39 guaranteed by the federal deposit insurance corporation by:
40     (A) Each governmental unit separately; and
41     (B) all governmental units in the aggregate;
42     (2) aggregate market value of the pool of securities; and
43     (3) name, phone number and email address of a representative of each
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1 governmental unit represented in the pool.
2     (g) Not later than 20 days after the deadline for receiving the
3 statement required under subsection (f), the administrator shall provide a
4 report to each governmental unit listed in such statement reflecting:
5     (1) The amount of public moneys or public funds deposited in such
6 bank, savings and loan association or savings bank by each governmental
7 unit as of the last business day of the previous month that is not insured or
8 guaranteed by the federal deposit insurance corporation and that is secured
9 pursuant to K.S.A. 9-1402 and 12-1675, and amendments thereto; and
10     (2) the aggregate market value of the pool of securities deposited as
11 of the last business day of the previous month. Such report shall clearly
12 notify the governmental unit if the value of the securities did not meet the
13 statutory requirement.
14     (h) If the administrator at any time determines that the value of the
15 securities does not meet the statutory requirement, the administrator shall
16 send notice to the bank, savings and loan association or savings bank
17 allowing such bank, savings and loan association or savings bank up to
18 five business days to adjust the securities to meet the statutory
19 requirement. If such bank, savings and loan association or savings bank
20 does not meet the statutory requirement within the required timeframe,
21 such bank, savings and loan association or savings bank shall be subject to
22 a fine and potential sanctions issued by the administrator pursuant to rules
23 and regulations adopted by the treasurer.
24     (i) The public moneys pooled method shall not be utilized by any
25 bank, savings and loan association or savings bank unless the treasurer
26 establishes a public moneys pooled method in accordance with this section
27 or designates an administrator pursuant to subsection (c).
28     (j) This section shall take effect on and after January 1, 2026The
29 treasurer may assess a fee to be used solely to operate the public moneys
30 pooled method that is. Such fee shall be equivalent to the reasonable and
31 customary charge made therefor and shall be adopted through rules and
32 regulations. All such fees received shall be deposited in the state treasury
33 to the credit of the public moneys fee fund, which is hereby created. All
34 expenditures from the public moneys fee fund shall be made in accordance
35 with appropriation acts upon warrants of the director of accounts and
36 reports issued pursuant to vouchers approved by the treasurer or the
37 treasurer's designee.
38     Sec. 9. K.S.A. 2025 Supp. 12-1675 is hereby amended to read as
39 follows: 12-1675. (a) The governing body of any county, city, township,
40 school district, area vocational-technical school, community college,
41 firemen's relief association, community mental health center, community
42 facility for people with intellectual disability or any other governmental
43 entity, unit or subdivision in the state of Kansas having authority to
 SB 524—Am. by SC  13
1 receive, hold and expend public moneys or funds may invest any moneys
2 that are not immediately required for the purposes for which the moneys
3 were collected or received, and the investment of which is not subject to or
4 regulated by any other statute.
5     (b) Such moneys shall be invested only:
6     (1) In temporary notes or no-fund warrants issued by such investing
7 governmental unit;
8     (2) (A) in savings deposits, demand deposits, time deposit, open
9 accounts, certificates of deposit or time certificates of deposit with
10 maturities of not more than two years:
11     (A)(i) In banks, savings and loan associations and savings banks that
12 have main or branch offices located in such investing governmental unit;
13 or
14     (B)(ii) if no main or branch office of a bank, savings and loan
15 association or savings bank is located in such investing governmental unit,
16 then in banks, savings and loan associations and savings banks that have
17 main or branch offices in the county or counties in which all or part of
18 such investing governmental unit is located.
19     (C)(B) In selecting a bank, savings and loan association or savings
20 bank pursuant to subparagraphs subparagraph (A) and (B), the investing
21 governmental unit may accept any rate agreed upon by the governmental
22 unit and the eligible bank, savings and loan association or savings bank. If
23 a bank, savings and loan association or savings bank eligible for an
24 investment deposit pursuant to subparagraphs subparagraph (A) and (B)
25 will make such deposits available to the investing governmental unit at
26 interest rates equal to or greater than the investment rate, as defined in
27 K.S.A. 12-1675a(g), and amendments thereto, the investing governmental
28 unit shall select one or more of such eligible banks, savings and loan
29 associations or savings banks;
30     (3) in repurchase agreements with:
31     (A) Banks, savings and loan associations and savings banks, that
32 have main or branch offices located in such investing governmental unit,
33 for direct obligations of, or obligations that are insured as to principal and
34 interest by, the United States government or any agency thereof; or
35     (B) (i) if no main or branch office of a bank, savings and loan
36 association or savings bank, is located in such investing governmental
37 unit; or
38     (ii) if no such bank, savings and loan association or savings bank
39 having a main or branch office located in such investing governmental unit
40 is willing to enter into such an agreement with the investing governmental
41 unit at an interest rate equal to or greater than the investment rate, as
42 defined in K.S.A. 12-1675a(g), and amendments thereto, then such
43 repurchase agreements may be entered into with banks, savings and loan
 SB 524—Am. by SC  14
1 associations or savings banks that have main or branch offices in the
2 county or counties in which all or part of such investing governmental unit
3 is located; or
4     (C) if no bank, savings and loan association or savings bank, having a
5 main or branch office in such county or counties is willing to enter into
6 such an agreement with the investing governmental unit at an interest rate
7 equal to or greater than the investment rate, as defined in K.S.A. 12-
8 1675a(g), and amendments thereto, then such repurchase agreements may
9 be entered into with banks, savings and loan associations or savings banks
10 located within this state.
11     (D) In selecting a bank, savings and loan association or savings bank
12 pursuant to subparagraphs (A), (B) and (C), the governmental unit may
13 accept any rate agreed upon by the governmental unit and the eligible
14 bank, savings and loan association or savings bank;
15     (4) in direct obligations of or obligations that are insured as to
16 principal and interest by the United States or any agency thereof, not
17 including mortgage-backed securities with maturities as the governing
18 body shall determine, but not exceeding two years. Such investment
19 transactions shall only be conducted with:
20     (A) Banks, savings and loan associations and savings banks;
21     (B) the federal reserve bank of Kansas City, Missouri; or
22     (C) primary government securities dealers that report to the market
23 report division of the federal reserve bank of New York, or any broker-
24 dealer engaged in the business of selling government securities that is
25 registered in compliance with the requirements of section 15 or 15C of the
26 securities exchange act of 1934 and registered pursuant to K.S.A. 17-
27 12a401, and amendments thereto;
28     (5) in the municipal investment pool fund established in K.S.A. 12-
29 1677a, and amendments thereto;
30     (6) in the investments authorized and in accordance with the
31 conditions prescribed in K.S.A. 12-1677b, and amendments thereto;
32     (7) in multiple municipal client investment pools managed by the
33 trust departments of banks that have main or branch offices located in the
34 county or counties where such investing governmental unit is located or
35 with trust companies incorporated under the laws of this state that have
36 contracted to provide trust services under the provisions of K.S.A. 9-2107,
37 and amendments thereto, with banks that have main or branch offices
38 located in the county or counties in which such investing governmental
39 unit is located. Public moneys invested under this paragraph shall be
40 secured in the same manner as provided for under K.S.A. 9-1402, and
41 amendments thereto. Pooled investments of public moneys made by trust
42 departments under this paragraph shall be subject to the same terms,
43 conditions and limitations as are applicable to the municipal investment
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1 pool established by K.S.A. 12-1677a, and amendments thereto; or
2     (8) municipal bonds or other obligations issued by any municipality
3 of the state of Kansas as defined in K.S.A. 10-1101, and amendments
4 thereto, that are general obligations of the municipality issuing the same.
5     (c) The investments authorized in subsection (b)(4), (5), (6), (7) or (8)
6 shall be utilized only if the banks, savings and loan associations and
7 savings banks eligible for investments authorized in subsection (b)(2),
8 cannot or will not make the investments authorized in subsection (b)(2)
9 available to the investing governmental unit at interest rates equal to or
10 greater than the investment rate, as defined in K.S.A. 12-1675a(g), and
11 amendments thereto.
12     (d) (1) All security purchases and repurchase agreements shall occur
13 on a delivery versus payment basis.
14     (2) All securities, including those acquired by repurchase agreements,
15 shall be perfected in the name of the investing governmental unit and shall
16 be delivered to the purchaser or a third-party custodian, which may be the
17 state treasurer.
18     (e) Public moneys deposited pursuant to subsection (b)(2) by the
19 governing body of any governmental unit listed in subsection (a) through a
20 selected bank, savings and loan association or savings bank that is part of a
21 reciprocal deposit program in which the bank, savings and loan association
22 or savings bank:
23     (1) Receives reciprocal deposits from other participating institutions
24 located in the United States in an amount equal to the amount of funds
25 deposited by the investing governmental unit; and
26     (2) for which the total cumulative amount of each deposit does not
27 exceed the maximum deposit insurance amount for one depositor at one
28 financial institution as determined by the federal deposit insurance
29 corporation.
30     Such deposits shall not be treated as securities and need not be secured
31 as provided in this or any other statute.
32     (f) (1) Except as provided in paragraph (2), public moneys deposited
33 pursuant to subsection (b)(2) by the governing body of any investing
34 governmental unit specified in subsection (a) through a selected bank,
35 savings and loan association or savings bank shall be secured by the public
36 moneys pooled method pursuant to K.S.A. 2025 Supp. 9-1410, and
37 amendments thereto, for the benefit of such investing governmental unit
38 having public moneys with such bank, savings and loan association or
39 savings bank as provided in K.S.A. 2025 Supp. 9-1410, and amendments
40 thereto.
41     (2) The provisions of paragraph (1) shall not apply to an account of a
42 governmental unit if such account is subject to a conflicting federal law.
43     (g) In selecting a depository institution pursuant to subsection (b)(2),
 SB 524—Am. by SC  16
1 an investing governmental unit shall allow an eligible financial institution
2 two business days to respond to the bid.
3     Sec. 10. K.S.A. 75-4201 is hereby amended to read as follows: 75-
4 4201. As used in this act, unless the context otherwise requires:
5     (a) "Treasurer" means state treasurer.
6     (b) "Controller" means director of accounts and reports.
7     (c) "Board" means the pooled money investment board.
8     (d) "Bank" means a bank incorporated under the laws of this state, or
9 organized under the laws of the United States or another state and which
10 has a main or branch office in this state.
11     (e) "State moneys" means all moneys in the treasury of the state or
12 coming lawfully into the possession of the treasurer.
13     (f) "State bank account" means state moneys or fee agency account
14 moneys deposited in accordance with the provisions of this act.
15     (g) "Operating account" means a state bank account which that is
16 payable or withdrawable, in whole or in part, on demand.
17     (h) "Investment account" means a state bank account which that is
18 not payable on demand.
19     (i) "Fee agency account" means a state bank account of any state
20 agency consisting of moneys authorized by law prior to remittance to the
21 state treasurer.
22     (j) "Disbursement" means a payment of any kind whatsoever made
23 from the state treasury or from any operating account, except transfer of
24 moneys between or among operating accounts and investment accounts or
25 either or both of them.
26     (k) "Securities" means, for the purposes of this section and K.S.A.
27 75-4218, and amendments thereto, securities, security entitlements,
28 financial assets and securities account consisting of any one or more of the
29 following, and security entitlements thereto, which may be accepted or
30 rejected by the pooled money investment board:
31     (1) Direct obligations of, or obligations that are insured as to principal
32 and interest by, the United States government or any agency thereof and
33 obligations, letters of credit and securities of United States sponsored
34 enterprises which under federal law may be accepted as security for public
35 funds.
36     (2) Kansas municipal bonds which are general obligations of the
37 municipality issuing the same.
38     (3) Revenue bonds of any agency or arm of the state of Kansas.
39     (4) Revenue bonds of any municipality, as defined by K.S.A. 10-101,
40 and amendments thereto, within the state of Kansas or bonds issued by a
41 public building commission as authorized by K.S.A. 12-1761, and
42 amendments thereto, if approved by the state bank commissioner, except
43 (A) bonds issued under the provisions of K.S.A. 12-1740 et seq., and
 SB 524—Am. by SC  17
1 amendments thereto, unless such bonds are rated at least MIG-1 or Aa by
2 Moody's Investors Service or AA by Standard & Poor's Corp. and (B)
3 bonds secured by revenues of a utility which has been in operation for less
4 than three years. Any expense incurred in connection with granting
5 approval of revenue bonds shall be paid by the applicant for approval.
6     (5) Temporary notes of any municipal corporation or quasi-municipal
7 corporation within the state of Kansas which are general obligations of the
8 municipal corporation or quasi-municipal corporation issuing the same.
9     (6) Warrants of any municipal corporation or quasi-municipal
10 corporation within the state of Kansas the issuance of which is authorized
11 by the state board of tax appeals and which are payable from the proceeds
12 of a mandatory tax levy.
13     (7) Bonds of any municipal or quasi-municipal corporation of the
14 state of Kansas which have been refunded in advance of their maturity and
15 are fully secured as to payment of principal and interest thereon by deposit
16 in trust, under escrow agreement with a bank, of direct obligations of, or
17 obligations the principal of and the interest on which are unconditionally
18 guaranteed by, the United States of America. A copy of such escrow
19 agreement shall be furnished to the treasurer.
20     (8) Securities listed in paragraph (14) of subsection (d) of K.S.A. 9-
21 1402, and amendments thereto, within limitations of K.S.A. 9-1402, and
22 amendments thereto.
23     (9) A corporate surety bond guaranteeing deposits in a bank, savings
24 or savings and loan association in excess of federal deposit insurance
25 corporation insurance, underwritten by an insurance company authorized
26 to do business in the state of Kansas.
27     (10) Commercial paper that does not exceed 270 days to maturity and
28 which has received one of the two highest commercial paper credit ratings
29 by a nationally recognized investment rating firm.
30     (11) All of such securities shall be current as to interest according to
31 the terms thereof the securities listed in K.S.A. 9-1402(c)(1) through (14),
32 and amendments thereto, which may be accepted or rejected by the pooled
33 money investment board.
34     (l) "Savings bank" means a savings bank organized under the laws of
35 the United States or another state insured by the federal deposit insurance
36 corporation or its successor and having a main or branch office in the
37 county in which a state agency making collection of any fees, tuition, or
38 charges is located.
39     (m) "Savings and loan association" means a savings and loan
40 association incorporated under the laws of this state or organized under the
41 laws of the United States or another state, insured by the federal deposit
42 insurance corporation or its successor and having a main or branch office
43 in the county in which a state agency making collection of any fees, tuition
 SB 524—Am. by SC  18
1 or charges is located.
2     (n) "Custodial bank" means a bank holding on deposit collateral
3 which that is security for state bank accounts.
4     (o) "Centralized securities depository" means a clearing agency
5 registered with the securities and exchange commission which that
6 provides safekeeping and book-entry settlement services to its participants.
7     (p) "Depository bank" means a bank, savings bank or savings and
8 loan association authorized and eligible to receive state moneys.
9     (q) "Main office" means the place of business specified in the articles
10 of association, certificate of authority or similar document, where the
11 business of the institution is carried on and which is not a branch.
12     (r) "Branch" means any office, agency or other place of business
13 within this state, other than the main office, at which deposits are received,
14 checks paid or money lent with approval of the appropriate regulatory
15 authorities. "Branch" does not include an automated teller machine, remote
16 service unit or similar device.
17     (s) "Securities," "security"Security entitlements," "financial assets,"
18 "securities account," "security agreement," "security interest," "perfection"
19 and "control" shall have the meanings given mean the same as such terms
20 are defined under the Kansas uniform commercial code.
21     Sec. 11. K.S.A. 2025 Supp. 75-4218 is hereby amended to read as
22 follows: 75-4218. (a) All state bank accounts shall be secured as provided
23 in this section.
24     The bank, savings bank or savings and loan association receiving or
25 having a state bank account shall deposit, maintain, pledge, assign, and
26 grant a security interest in, or cause its agent, trustee, wholly-owned
27 subsidiary, or affiliate having identical ownership to deposit, maintain,
28 pledge, assign, and grant a security interest in, for the benefit of the state
29 of Kansas, in the manner provided in this act, securities owned by the
30 depository bank directly or indirectly through its agent or trustee holding
31 securities on its behalf, or owned by the depository bank's wholly-owned
32 subsidiary or by such affiliate, the market value of which is equal to 100%
33 102% of the amount of the account plus accrued interest, less that portion
34 of the amount of the account plus accrued interest which that is insured by
35 the federal deposit insurance corporation or its successor.
36     (b) All securities securing state bank accounts shall be deposited in a
37 securities account with a bank any custodial bank or trust company as
38 described in K.S.A. 9-1405(b), and amendments thereto, having the prior
39 approval of the board, a credit union having the prior approval of the
40 board, the federal home loan bank of Topeka or with the state treasurer
41 pursuant to a written custodial agreement, and a receipt taken therefor with
42 one copy going to the treasurer and one copy going to the bank, savings
43 bank or savings and loan association which that has secured such state
 SB 524—Am. by SC  19
1 bank account. The receipt shall identify the securities which that are
2 subject to a security interest to secure payment of the state bank account.
3 This section shall not prohibit any custodial bank receiving securities on
4 deposit from issuing a receipt and depositing securities identified in the
5 receipt in such bank's account with any bank chartered in Kansas or any
6 other state, any trust company chartered in Kansas or any other state, any
7 national bank, or any centralized securities depository wherever located
8 within the United States. No securities securing state bank accounts shall
9 be deposited in any bank, trust company or national bank which that is
10 owned directly or indirectly by any parent corporation of the depository
11 bank, or with any bank, trust company, or national bank having common
12 controlling shareholders, having a common majority of the board of
13 directors or having common directors with the ability to control or
14 influence directly or indirectly the acts or policies of the bank, savings and
15 loan association or savings bank securing such state bank account. Any
16 custodial bank which that releases securities securing a state bank account
17 without being authorized to do so under the custodial agreement shall be
18 liable to the state for any loss to the state resulting therefrom.
19     (c) Securities securing state bank accounts may be deposited with the
20 federal reserve bank of Kansas City to be there held in such manner, under
21 regulations and operating letters of the federal reserve bank, as to secure
22 payment of the state bank account in the depository bank.
23     (d) The depository bank, and any agent, trustee, wholly-owned
24 subsidiary or affiliate having identical ownership granting a security
25 interest shall enter into a written agreement with the state of Kansas
26 granting the state of Kansas a security interest in the securities to secure
27 payment of the state bank account. Such security interest shall be perfected
28 by the depository bank and any agent, trustee, wholly-owned subsidiary or
29 affiliate having identical ownership granting a security interest causing
30 control of the securities under the Kansas uniform commercial code to be
31 given to the state of Kansas. The security agreement and the custodial
32 agreement shall be in writing, executed by all parties thereto, maintained
33 as part of their official records, and, except for the state of Kansas,
34 approved by their boards of directors or their loan committees, which.
35 Such approvals shall be reflected in the minutes of the boards or
36 committees.
37     Sec. 12. K.S.A. 9-1401, 9-1403, 9-1405, 9-1406, 9-1407, 9-1408 and
38 75-4201 and K.S.A. 2025 Supp. 9-1402, 9-1410, 12-1675 and 75-4218 are
39 hereby repealed.
40     Sec. 13. This act shall take effect and be in force from and after its
41 publication in the statute book.