[As Amended by House Committee of the
Whole]
As Amended by House Commettee
Session of 1998
HOUSE BILL No. 2703
By Committee on Financial Institutions
1-23
12
AN ACT concerning banks and banking
financial institutions; relating
13 to access
devices; unauthorized transactions; notice [to
educational
14 savings
accounts]; amending K.S.A. 17-5569 and
17-5570 and
15 K.S.A. 1997
Supp. 9-1111 and
9-1111d [79-32,117 and 79-32,117h]
16 and repealing the
existing section sections.
17 Be it enacted by
the Legislature of the State of Kansas:
18
[Section 1. K.S.A. 79-32,117 is hereby amended
to read as fol-
19 lows: 79-32,117.
(a) The Kansas adjusted gross income of an indi-
20 vidual means such
individual's federal adjusted gross income for
21 the taxable year,
with the modifications specified in this section.
22
[(b) There shall be added to federal adjusted gross
income:
23
[(i) Interest income less any related expenses directly
incurred
24 in the purchase of
state or political subdivision obligations, to the
25 extent that the
same is not included in federal adjusted gross in-
26 come, on
obligations of any state or political subdivision thereof,
27 but to the extent
that interest income on obligations of this state
28 or a political
subdivision thereof issued prior to January 1, 1988,
29 is specifically
exempt from income tax under the laws of this state
30 authorizing the
issuance of such obligations, it shall be excluded
31 from computation of
Kansas adjusted gross income whether or not
32 included in federal
adjusted gross income. Interest income on ob-
33 ligations of this
state or a political subdivision thereof issued after
34 December 31, 1987,
shall be excluded from computation of Kansas
35 adjusted gross
income whether or not included in federal adjusted
36 gross
income.
37
[(ii) Taxes on or measured by income or fees or payments
in
38 lieu of income
taxes imposed by this state or any other taxing ju-
39 risdiction to the
extent deductible in determining federal adjusted
40 gross income and
not credited against federal income tax. This
41 paragraph shall not
apply to taxes imposed under the provisions
42 of K.S.A. 79-1107
or 79-1108, and amendments thereto, for privi-
HB 2703--Am. by HCW
2
1 lege tax year
1995, and all such years thereafter.
2
[(iii) The federal net operating loss deduction.
3
[(iv) Federal income tax refunds received by the taxpayer if
the
4 deduction of
the taxes being refunded resulted in a tax benefit for
5 Kansas income
tax purposes during a prior taxable year. Such re-
6 funds shall
be included in income in the year actually received
7 regardless of
the method of accounting used by the taxpayer. For
8 purposes
hereof, a tax benefit shall be deemed to have resulted if
9 the amount of
the tax had been deducted in determining income
10 subject to a Kansas
income tax for a prior year regardless of the
11 rate of taxation
applied in such prior year to the Kansas taxable
12 income, but only
that portion of the refund shall be included as
13 bears the same
proportion to the total refund received as the fed-
14 eral taxes deducted
in the year to which such refund is attributable
15 bears to the total
federal income taxes paid for such year. For
16 purposes of the
foregoing sentence, federal taxes shall be consid-
17 ered to have been
deducted only to the extent such deduction does
18 not reduce Kansas
taxable income below zero.
19
[(v) The amount of any depreciation deduction or business
ex-
20 pense deduction
claimed on the taxpayer's federal income tax re-
21 turn for any
capital expenditure in making any building or facility
22 accessible to the
handicapped, for which expenditure the taxpayer
23 claimed the credit
allowed by K.S.A. 79-32,177, and amendments
24 thereto.
25
[(vi) Any amount of designated employee contributions
picked
26 up by an employer
pursuant to K.S.A. 12-5005, 20-2603, 74-4919
27 and 74-4965, and
amendments to such sections.
28
[(vii) The amount of any charitable contribution made to
the
29 extent the same is
claimed as the basis for the credit allowed pur-
30 suant to K.S.A.
79-32,196, and amendments thereto.
31
[(c) There shall be subtracted from federal adjusted gross
in-
32 come:
33
[(i) Interest or dividend income on obligations or securities
of
34 any authority,
commission or instrumentality of the United States
35 and its possessions
less any related expenses directly incurred in
36 the purchase of
such obligations or securities, to the extent in-
37 cluded in federal
adjusted gross income but exempt from state
38 income taxes under
the laws of the United States.
39
[(ii) Any amounts received which are included in federal
ad-
40 justed gross income
but which are specifically exempt from Kansas
41 income taxation
under the laws of the state of Kansas.
42
[(iii) The portion of any gain or loss from the sale or
other
43 disposition of
property having a higher adjusted basis for Kansas
HB 2703--Am. by HCW
3
1 income tax
purposes than for federal income tax purposes on the
2 date such
property was sold or disposed of in a transaction in which
3 gain or loss
was recognized for purposes of federal income tax that
4 does not
exceed such difference in basis, but if a gain is
considered
5 a long-term
capital gain for federal income tax purposes, the mod-
6 ification
shall be limited to that portion of such gain which is in-
7 cluded in
federal adjusted gross income.
8
[(iv) The amount necessary to prevent the taxation under
this
9 act of any
annuity or other amount of income or gain which was
10 properly included
in income or gain and was taxed under the laws
11 of this state for a
taxable year prior to the effective date of this act,
12 as amended, to the
taxpayer, or to a decedent by reason of whose
13 death the taxpayer
acquired the right to receive the income or
14 gain, or to a trust
or estate from which the taxpayer received the
15 income or
gain.
16
[(v) The amount of any refund or credit for overpayment
of
17 taxes on or
measured by income or fees or payments in lieu of
18 income taxes
imposed by this state, or any taxing jurisdiction, to
19 the extent included
in gross income for federal income tax pur-
20 poses.
21
[(vi) Accumulation distributions received by a taxpayer as
a
22 beneficiary of a
trust to the extent that the same are included in
23 federal adjusted
gross income.
24
[(vii) Amounts received as annuities under the federal
civil
25 service retirement
system from the civil service retirement and
26 disability fund and
other amounts received as retirement benefits
27 in whatever form
which were earned for being employed by the
28 federal government
or for service in the armed forces of the
29 United
States.
30
[(viii) Amounts received by retired railroad employees as
a
31 supplemental
annuity under the provisions of 45 U.S.C. 228b (a)
32 and 228c (a)(1)
et seq.
33
[(ix) Amounts received by retired employees of a city and
by
34 retired employees
of any board of such city as retirement allow-
35 ances pursuant to
K.S.A. 13-14,106, and amendments thereto, or
36 pursuant to any
charter ordinance exempting a city from the pro-
37 visions of K.S.A.
13-14,106, and amendments thereto.
38
[(x) For taxable years beginning after December 31, 1976,
the
39 amount of the
federal tentative jobs tax credit disallowance under
40 the provisions of
26 U.S.C. 280 C. For taxable years ending after
41 December 31, 1978,
the amount of the targeted jobs tax credit and
42 work incentive
credit disallowances under 26 U.S.C. 280 C.
43
[(xi) For taxable years beginning after December 31, 1986,
div-
HB 2703--Am. by HCW
4
1 idend income
on stock issued by Kansas Venture Capital, Inc.
2
[(xii) For taxable years beginning after December 31,
1989,
3 amounts
received by retired employees of a board of public utili-
4 ties as
pension and retirement benefits pursuant to K.S.A. 13-1246,
5 13-1246a and
13-1249 and amendments thereto.
6
[(xiii) For taxable years beginning after December 31,
1993,
7 the amount of
income earned on contributions deposited to an
8 individual
development account under K.S.A. 79-32,117h, and
9 amendments
thereto.
10
[(xiv) For all taxable years commencing after December
31,
11 1996, that portion
of any income of a bank organized under the
12 laws of this state
or any other state, a national banking association
13 organized under the
laws of the United States, an association or-
14 ganized under the
savings and loan code of this state or any other
15 state, or a federal
savings association organized under the laws of
16 the United States,
for which an election as an S corporation under
17 subchapter S of the
federal internal revenue code is in effect,
18 which accrues to
the taxpayer who is a stockholder of such cor-
19 poration and which
is not distributed to the stockholders as divi-
20 dends of the
corporation.
21
[(xv) For all taxable years commencing after December
31, 1997, the
22 amount, not to
exceed $2,000, of contributions to an education savings
23 account pursuant to
section 3.
24
[(d) There shall be added to or subtracted from federal
ad-
25 justed gross income
the taxpayer's share, as beneficiary of an estate
26 or trust, of the
Kansas fiduciary adjustment determined under
27 K.S.A. 79-32,135,
and amendments thereto.
28
[(e) The amount of modifications required to be made
under
29 this section by a
partner which relates to items of income, gain,
30 loss, deduction or
credit of a partnership shall be determined un-
31 der K.S.A.
79-32,131, and amendments thereto, to the extent that
32 such items affect
federal adjusted gross income of the partner.
33
[Sec. 2. K.S.A. 79-32,117h is hereby amended to read as
fol-
34 lows: 79-32,117h.
(a) This section may be cited as the individual
35 development account
act.
36
[(b) For the purposes of this section:
37
[(1) ``Account holder'' means the individual on whose
behalf
38 the individual
development account is established.
39
[(2) ``Dependent child'' means any person under the age of
21
40 years or any person
who is legally entitled or subject to a court
41 order for the
provision of proper and necessary subsistence and
42 education, and who
is not emancipated, married or a member of
43 the armed forces of
the United States.
HB 2703--Am. by HCW
5
1
[(3) ``Individual development account'' means a custodial
ac-
2 count
established or organized to pay for K-12 education
expenses
3 of the
account holder.
4
[(4) ``Custodian'' means a chartered state bank, credit
union or
5 trust company
authorized to act as a fiduciary, a national banking
6
association, credit union or savings and loan
association authorized
7 to act as a
fiduciary, or an insurance company and shall include
8 any other
qualified financial custodian as defined by rules and reg-
9 ulations
adopted by the secretary of revenue.
10
[(c) (1) For taxable years beginning after December 31,
1993,
11 a resident of this
state shall be allowed to deposit contributions to
12 an individual
development account. Except as provided in subsec-
13 tion (c)(8), the
amount of deposit for the first taxable year subse-
14 quent to the
effective date of this act shall not exceed:
15
[(A) $2,000 for the account holder; or
16
[(B) $2,000 for the account holder and $1,000 for each
de-
17 pendent child of
the account holder.
18
[(2) The maximum allowable amount of deposit for
subsequent
19 years shall be
increased annually by a percentage equal to the
20 previous year's
increase in the consumer price index as published
21 annually as soon
after December 31 each year as possible by the
22 secretary of state
in the Kansas register. As used in this paragraph
23 (2), ``consumer
price index'' means the twelve-month average of
24 the consumer price
index for all urban consumers United States
25 city average which
is published by the United States department
26 of labor.
27
[(3) Income earned on an individual development
account
28 shall be exempt
from state income taxation under the Kansas in-
29 come tax
act.
30
[(4) Upon agreement between an employer and employee,
an
31 employer may
contribute to the employee's individual develop-
32 ment account,
subject to the restrictions in subsection (6)(A).
33
[(5) The individual development account shall be
established
34 as a custodial
account and be placed with a custodian.
35
[(6) Individual development account funds may be
withdrawn
36 by the account
holder at any time for any purpose, subject to the
37 following
restrictions and penalties:
38
[(A) There shall be a distribution penalty for withdrawal of
in-
39 dividual
development account funds by the account holder; such
40 penalty shall be
25% of the amount of interest earned as of the
41 date of withdrawal
on the account and shall be remitted by the
42 custodian to the
state and disposed of in the same manner as other
43 penalties imposed
under the Kansas income tax act; and, upon such
HB 2703--Am. by HCW
6
1 withdrawal,
the interest earned during the tax year in which with-
2 drawal occurs
shall be subject to state income taxation; and
3
[(B) withdrawals shall be permitted without penalty for
the
4 purposes for
which the individual development account was cre-
5 ated.
6
[(7) Upon the death of the account holder, the account
prin-
7 cipal, as
well as any interest accumulated thereon, shall be distrib-
8 uted to the
decedent's estate and taxed as part of the estate.
9
[(8) There shall be no limit on the amount of earned income
of
10 a dependent child,
who is a recipient of aid to families with de-
11 pendent children,
deposited in an individual development account
12 of such dependent
child that was created or organized to pay for
13 educational
expenses of such dependent child.
14 [New
Sec. 3. (a) This section may be cited as the
education
15 savings account
act.
16
[(b) For the purposes of this section:
17
[(1) ``Account holder'' means the individual on whose
behalf
18 the education
savings account is established.
19
[(2) ``Dependent child'' means any person under the age of
21
20 years or any person
who is legally entitled or subject to a court
21 order for the
provision of proper and necessary subsistence and
22 education, and who
is not emancipated, married or a member of
23 the armed forces of
the United States.
24
[(3) ``Education savings account'' means a custodial account
es-
25 tablished or
organized to pay for post secondary education ex-
26 penses of the
account holder.
27
[(4) ``Custodian'' means a chartered state bank, credit union
or
28 trust company
authorized to act as a fiduciary, a national banking
29 association, credit
union or savings and loan association authorized
30 to act as a
fiduciary, or an insurance company and shall include
31 any other qualified
financial custodian as defined by rules and reg-
32 ulations adopted by
the secretary of revenue.
33
[(c) For taxable years beginning after December 31, 1997,
a
34 resident of this
state shall be allowed to deposit contributions to
35 an education
savings account. Except as provided in subsection
36 (c)(8), the amount
of deposit for the first taxable year subsequent
37 to the effective
date of this act shall not exceed:
38
[(1) $2,000 for the account holder; or
39
[(2) $2,000 for the account holder and $1,000 for each
de-
40 pendent child of
the account holder.
41
[(3) Income earned on an education savings account shall
be
42 exempt from state
income taxation under the Kansas income tax
43 act.
HB 2703--Am. by HCW
7
1
[(4) Upon agreement between an employer and employee,
an
2 employer may
contribute to the employee's education savings ac-
3 count,
subject to the restrictions in subsection (6)(A).
4
[(5) The education savings account shall be established as
a
5 custodial
account and be placed with a custodian.
6
[(6) Education savings account funds may be withdrawn by
the
7 account
holder at any time for any purpose, subject to the follow-
8 ing
restrictions and penalties:
9
[(A) There shall be a distribution penalty for withdrawal of
ed-
10 ucation savings
account funds by the account holder; such penalty
11 shall be 25% of the
amount of interest earned as of the date of
12 withdrawal on the
account and shall be remitted by the custodian
13 to the state and
disposed of in the same manner as other penalties
14 imposed under the
Kansas income tax act; and, upon such with-
15 drawal, the
interest earned during the tax year in which with-
16 drawal occurs shall
be subject to state income taxation; and
17
[(B) withdrawals shall be permitted without penalty for
the
18 purposes for which
the education savings account was created.
19
[(7) Upon the death of the account holder, the account
prin-
20 cipal, as well as
any interest accumulated thereon, shall be distrib-
21 uted to the
decedent's estate and taxed as part of the estate.
22
[(8) There shall be no limit on the amount of earned income
of
23 a dependent child,
who is a recipient of aid to families with de-
24 pendent children,
deposited in an education savings account of
25 such dependent
child that was created or organized to pay for
26 educational
expenses of such dependent child.]
27
``Section 1. K.S.A. 1997 Supp. 9-1111 is hereby
amended to
28 read as
follows: 9-1111. The general business of every bank
shall
29 be
transacted at the place of business specified in its certificate
of
30 authority
and at one or more branch banks established and
oper-
31 ated as
provided in this section. Except for the establishment
or
32 operation
of a trust branch bank or the relocation of an
existing
33 trust
branch bank pursuant to K.S.A. 1997 Supp. 9-1135
and
34 amendments
thereto, it shall be unlawful for any bank to
establish
35 and operate
any branch bank or relocate an existing branch
bank
36 except as
hereinafter provided. Notwithstanding the provisions
of
37 this
section, any location at which a depository institution, as
de-
38 fined by
K.S.A. 9-701 and amendments thereto, receives
deposits,
39 renews time
deposits, closes loans, services loans or receives
pay-
40 ments on
loans or other obligations, as agent, for a bank
pursuant
41 to
subsection (25) of K.S.A. 9-1101 and amendments thereto
or
42 other
applicable state or federal law, or is authorized to open
ac-
43 counts or
receive deposits under subsection (28) of K.S.A.
9-1101,
HB 2703--Am. by HCW
8
1 and
amendments thereto, shall not be deemed to be a
branch
2
bank:
3
(a) For the purposes of this section,
the term ``branch bank''
4 means
any office, agency or other place of business located
within
5 this
state, other than the place of business specified in the
bank's
6
certificate of authority, at which deposits are
received, checks
7 paid,
money lent or trust authority exercised, if approval has
been
8
granted by the state bank commissioner, under K.S.A.
9-1602, and
9
amendments thereto;
10
(b) after first applying for and obtaining the approval
of the
11 state
banking board, one or more branch banks may be
established
12 and
operated anywhere within this state by a bank
incorporated
13 under the
laws of this state;
14
(c) an application to establish and operate a branch
bank or to
15 relocate an
existing branch bank shall be in such form and
contain
16 such
information as the rules and regulations of the state
bank
17
commissioner, adopted pursuant to K.S.A. 9-1713, and
amend-
18 ments
thereto, shall provide;
19
(d) the application shall include estimates of the
annual income
20 and
expenses of the proposed branch bank, the annual volume
of
21 business to
be transacted by it, the nature of the banking
business
22 to be
conducted at the proposed branch bank, the primary
geo-
23 graphical
area to be served by it and the personnel and office
fa-
24 cilities to
be provided at the proposed branch bank;
25
(e) the application shall include the name selected for
the pro-
26 posed
branch bank. The name selected for the proposed
branch
27 bank shall
not be the name of any other bank or branch bank
doing
28 business in
the same city or town nor shall the name selected
be
29 required to
contain the name of the applicant bank. If the
name
30 selected
for the proposed bank does not contain the name of
the
31 applicant
bank, the branch bank shall provide in the public
lobby
32 of such
branch bank, a public notice that it is a branch bank of
the
33 applicant
bank;
34
(f) the application shall include an affidavit of
publication of
35 notice that
applicant bank intends to file an application to
establish
36 a branch
bank or relocate an existing branch bank. The notice
shall
37 be
published in a newspaper of general circulation in the
county
38 where the
applicant bank proposes to locate the branch bank.
The
39 notice
shall be in the form prescribed by the state banking
board
40 and at a
minimum shall contain, the name and address of the
ap-
41 plicant
bank, the location of the proposed branch, a solicitation
for
42 written
comments concerning the proposed branch be
submitted
43 to the
state banking board, and provide for a comment period
of
HB 2703--Am. by HCW
9
1 not
less than 10 days prior to the board's final consideration of
the
2
application;
3
(g) upon receipt of an application
meeting the above require-
4
ments, if there is any written objection to the
application filed with
5 the
board, within 60 days after receipt of the application, the
state
6
banking board shall hold a hearing in the county in
which the ap-
7
plicant bank seeks to establish and operate a branch
bank. If there
8 is no
written objection filed with the board within the time
period
9
specified under subsection (f), the board may hold a
hearing on
10 the
application in such county. Notice of the time, date and
place
11 of such
hearing if one is to be held shall be published in a
news-
12 paper of
general circulation in such county by the bank seeking
to
13 establish
and operate the branch bank not less than 10 or
more
14 than 30
days prior to the date of the hearing, and an affidavit
of
15 publication
thereof shall be filed with the commissioner. Not
less
16 than 10
days or more than 30 days prior to any such date of
the
17 hearing,
the commissioner shall give notice of the time, date
and
18 place of
such hearing by registered or certified mail to all
banks
19 and
national banking associations having their principal places
of
20 business or
branch banks in the county wherein the applicant
bank
21 seeks to
locate a branch bank. At any such hearing, all
interested
22 persons
shall be allowed to present written and oral evidence
to
23 the board
in support of or in opposition to the application.
Upon
24 completion
of a transcript of the testimony given at any such
hear-
25 ing, the
transcript shall be filed in the office of the
commissioner
26 and copies
shall be furnished to the members of the state
banking
27 board not
less than 14 days prior to the meeting of the board
at
28 which the
application will be considered;
29
(h) the state banking board shall approve or disapprove
the
30
application, within 90 days after consideration of the
application
31 and the
evidence gathered during the board's investigation. If
the
32 board finds
that:
33
(1) There is or will be at the time the branch bank is
opened
34 the need
for the same in the community to be served by it;
35
(2) there is a reasonable probability of usefulness and
success
36 of the
proposed branch bank;
37
(3) the applicant bank's financial history and
condition is
38 sound;
and
39
(4) the proposed branch bank can be established without
un-
40 due injury
to properly conducted existing banks and national
bank-
41 ing
associations, the application shall be granted, otherwise,
the
42 application
shall be denied;
43
(i) any final action of the board approving or
disapproving an
HB 2703--Am. by HCW
10
1
application shall be subject to review in accordance
with the act
2 for
judicial review and civil enforcement of agency actions
upon
3 the
petition of any adversely affected or aggrieved person
who
4
appeared and offered evidence at the hearing upon the
applica-
5
tion;
6
(j) any branch bank lawfully
established and operating on the
7
effective date of this act may continue to be operated
by the bank
8 then
operating the branch bank and by any successor
bank;
9
(k) branch banks which have been
established and are being
10 maintained
by a bank at the time of its merger into or
consolidation
11 with
another bank or at the time its assets are purchased and
its
12 liabilities
are assumed by another bank may continue to be
oper-
13 ated by the
surviving, resulting or purchasing and assuming
bank.
14 The
surviving, resulting or purchasing and assuming bank,
with
15 approval of
the state bank commissioner, may establish and op-
16 erate a
branch bank or banks at the site or sites of the
merged,
17 constituent
or liquidated bank or banks;
18
(l) any state bank or national banking association
having its
19 principal
office and main banking house in this state may
provide
20 and engage
in banking transactions by means of remote service
21 units
wherever located, which remote service units shall not
be
22 considered
to be branch banks authorized herein. Any banking
23 transaction
effected by use of a remote service unit shall be
24 deemed to
be transacted at a bank and not at a remote
service
25
unit;
26
(m) as a condition to the operation and use of any
remote serv-
27 ice unit in
this state, a state bank or national banking
association,
28 each
hereinafter referred to as a bank, which desires to
operate
29 or enable
its customers to utilize a remote service unit must
agree
30 that such
remote service unit will be available for use by
customers
31 of any
other bank or banks upon the request of such bank or
banks
32 to share
its use and the agreement of such bank or banks to
share
33 all costs,
including a reasonable return on capital expenditures
in-
34 curred in
connection with its development, installation and
oper-
35 ation. The
owner of the remote service unit, whether a bank
or
36 any other
person, shall make the remote service unit available
for
37 use by
other banks and their customers on a
nondiscriminatory
38 basis,
conditioned upon payment of a reasonable proportion of
all
39 costs,
including a reasonable return on capital expenditures
in-
40 curred in
connection with the development, installation and
op-
41 eration of
the remote service unit. Notwithstanding the
foregoing
42 provisions
of this subsection, a remote service unit located on
the
43 property
owned or leased by the bank where the principal
place
HB 2703--Am. by HCW
11
1 of
business of a bank, or an attached auxiliary teller facility
or
2
branch bank of a bank, is located need not be made
available for
3 use
by any other bank or banks or customers of any other bank
or
4
banks;
5
(n) for purposes of this section,
``remote service unit'' means
6 an
electronic information processing device, including
associated
7
equipment, structures and systems, through or by means
of which
8
information relating to financial services rendered to
the public is
9
stored and transmitted, whether instantaneously or
otherwise, to
10 a bank and
which, for activation and account access, is
dependent
11 upon the
use of a machine-readable instrument
an access device, as
12 defined in
K.S.A. 9-1111d, and amendments thereto, in
the possession
13 and control
of the holder of an account with a bank. The term
shall
14 include
``online'' computer terminals and ``offline'' automated
cash
15 dispensing
machines and automated teller machines, but shall
not
16 include
computer terminals or automated teller machines or
au-
17 tomated
cash dispensing machines using systems in which
account
18 numbers are
not machine read and verified. Withdrawals by
means
19 of
``offline'' systems shall not exceed $300 per transaction and
shall
20 be
restricted to individual not corporate or commercial
accounts.
21
Section 1
Sec. 2. K.S.A. 1997 Supp.
9-1111d is hereby amended to
22 read as
follows: 9-1111d. (a) The amount of a depositor's liability for
an
23 unauthorized
transaction or a series of unauthorized transactions by
a
24 machine
readable instrument an access
device shall not exceed $50,
unless
25 the depositor
fails to notify the bank within four business days after
learn-
26 ing of the
loss or theft of the machine readable
instrument access
device,
27 then the
depositor's liability shall not exceed $300,
except that if the de-
28 positor
fails to notify the bank of the unauthorized transaction or
series
29 of
unauthorized transactions by an access device that appears on a
peri-
30 odic
statement within 60 days of the bank's transmittal of the
statement,
31 the
depositor's liability shall not exceed the amount of the
unauthorized
32
transactions that occur after the close of the 60 days
and before notice to
33 the bank
and that the bank establishes would not have occurred
has had
34 the
depositor notified the bank within the 60-day
period. If the
con-
35 sumer's
delay in notifying the bank was due to extenuating
circum-
36 stances,
the bank shall extend the times specified above to a
rea-
37 sonable
period.
38
(b) For purposes of this section:
39
(1) ``Unauthorized transaction by a machine
readable instrument an
40 access
device'' means an electronic fund
transfer initiated by an
access
41
device from a depositor's account
initiated by a person other than the
42 depositor
without actual authority to initiate the transfer and from
which
43 the depositor
receives no benefit. The term does not include any
elec-
HB 2703--Am. by HCW
12
1 tronic
fund transfer: (A) Initiated by a person who was furnished with
the
2 access
device to the depositor's account by the depositor, unless the
de-
3 positor
has notified the bank involved that transfers by that person
are
4 no
longer authorized; (B) initiated with fraudulent intent by the
depositor
5 or any
person acting in concert with the depositor; or (C) that is
initiated
6 by the
bank or its employees.
7
(2) ``To notify the bank'' means a depositor takes such
steps as are
8
reasonably necessary to provide the bank with the pertinent
information,
9 whether
or not any particular officer, employee or agent of the
financial
10 institution
does in fact receive the information. Notice may be given
to
11 the bank, at
the depositor's option, in person, by telephone or in
writing.
12 Notice in
writing is considered given at the time the depositor
deposits
13 the notice in
the mail or delivers the notice for transmission by any
other
14 usual means to
the bank. Notice is also considered given when the
bank
15 becomes aware
of circumstances that lead to the reasonable belief
that
16 an
unauthorized electronic fund transfer involving the depositor's
account
17 has been or
may be made.
18
(3) ``Access device'' means a card,
code or other means of access to a
19 depositor's
account, or any combination thereof, that may be used by
the
20 depositor
to initiate electronic fund transfers.
21
Sec. 3. K.S.A. 17-5569 is hereby amended to read
as follows:
22 17-5569.
The amount of a depositor's liability for an
unauthorized
23 transaction
or a series of unauthorized transactions by a
machine
24 readable
instrument an access device
shall not exceed $50, unless the
25 depositor
fails to notify the savings and loan association within
four
26 business
days after learning of the loss or theft of the
machine read-
27 able
instrument access
device, then the depositor's liability
shall not
28 exceed
$300, except that if the depositor fails to
notify the savings and
29 loan
association of the unauthorized transaction or series of
unauthorized
30
transactions by an access device that appears on a
periodic statement
31 within 60
days of the savings and loan association's transmittal of
the
32 statement,
the depositor's liability shall not exceed the amount of the
unau-
33 thorized
transactions that occur after the close of the 60 days and
before
34 notice to
the savings and loan association and that the savings and
loan
35 association
establishes would not have occurred had the depositor
notified
36 the savings
and loan association within the 60-day period. If the
con-
37 sumer's
delay in notifying the savings and loan association was due
to
38 extenuating
circumstances, the savings and loan association shall
extend
39 the times
specified above to a reasonable
period.
40
Sec. 4. K.S.A. 17-5570 is hereby amended to read
as follows:
41 17-5570.
For the purposes of this act: (a) The
term ``Financial trans-
42 actions''
shall include receiving deposits of every kind and
nature,
43 receiving
payments payable to the savings and loan association
and
HB 2703--Am. by HCW
13
1
making withdrawals from the customer's account, but such
term
2 shall
not include opening an account or initiating a
loan.
3
(b) The
term ``Remote service unit''
shall mean means
an elec-
4
tronic information processing device, including
associated equip-
5 ment,
structures and systems, through or by means of which
in-
6
formation relating to financial services rendered to the
public is
7
stored and transmitted, whether instantaneously or
otherwise, to
8 a
savings and loan association and which, for activation and
ac-
9 count
access, is dependent upon the use of a
machine-readable in-
10
strument an access
device, other than a passbook, in the
possession
11 and control
of the holder of an account with a savings and
loan
12
association. The term
``Remote service unit'' shall include
``on-line''
13 computer
terminals and ``on-line'' or ``off-line'' automated
cash
14 dispensing
machines and automated teller machines, but shall
not
15 include
computer terminals, automated cash dispensing
machines
16 or
automated teller machines using systems in which account
num-
17 bers are
not machine-read and verified.
18
(c) The term
``Savings and loan association''
shall mean means
any
19 state
chartered savings and loan association in which deposits
are
20 insured or
any federally chartered savings and loan
association
21 domiciled
in this state.
22
(d) ``Unauthorized transaction
by an access device'' means an elec-
23 tronic fund
transfer initiated by an access device from a depositor's
ac-
24 count
initiated by a person other than the depositor without actual
au-
25 thority to
initiate the transfer and from which the depositor receives
no
26 benefit.
The term does not include any electronic fund transfer: (1)
Ini-
27 tiated by a
person who was furnished with the access device to the
de-
28 positor's
account by the depositor, unless the depositor has notified
the
29 savings and
loan association involved that the transfers by that
person
30 are no
longer authorized; (2) initiated with fraudulent intent by the
de-
31 positor or
any person acting in concert with the depositor; or (3) that
is
32 initiated
by the savings and loan association or its
employees.
33
(e) ``To notify the savings and loan association''
means a depositor
34 takes such
steps as are reasonably necessary to provide the savings
and
35 loan
association with the pertinent information, whether or not any
par-
36 ticular
officer, employee or agent of the financial institution does in
fact
37 receive the
information. Notice may be given to the savings and
loan
38
association, at the depositor's option, in person, by
telephone or in writing.
39 Notice in
writing is considered given at the time the depositor
deposits
40 the notice
in the mail or delivers the notice for transmission by any
other
41 usual means
to the savings and loan association. Notice is also
considered
42 given when
the savings and loan association becomes aware of
circum-
43 stances
that lead to the reasonable belief that an unauthorized
electronic
HB 2703--Am. by HCW
14
1 fund
transfer involving the depositor's account has been or may be
made.
2
(f) ``Access device'' means a card,
code or other means of access to a
3
depositor's account, or any combination thereof, that
may be used by the
4
depositor to initiate electronic fund
transfers.
5
Sec. 2.
5 K.S.A. 1997
Supp. 9-1111d is 17-5569 and 17-5570
and
6
K.S.A. 1997 Supp. 9-1111 and 9-1111d are
hereby repealed.
7
[Sec. 4. K.S.A. 79-32,117 and 79-32,117h are
hereby re-
8
pealed.]
9
Sec. 3. 6.
[5.] This act shall take effect and be in force from
and after
10 its publication in the
statute book.
11