Session of 2000
SENATE BILL No. 524
By Committee on Financial Institutions and
Insurance
1-31
9 AN ACT
concerning cities; relating to depositories for public funds;
10 amending K.S.A. 1999
Supp. 9-1401, 9-1408, 12-1675 and 12-1675a
11 and repealing the
existing sections.
12
13 Be it enacted by the Legislature of the
State of Kansas:
14 Section
1. K.S.A. 1999 Supp. 9-1401 is hereby amended to read as
15 follows: 9-1401. (a) The governing body of
any municipal corporation or
16 quasi-municipal corporation shall designate
by official action recorded
17 upon its minutes the banks, savings and
loan associations and savings
18 banks which shall serve as depositories of
its funds and the officer and
19 official having the custody of such funds
shall not deposit such funds other
20 than at such designated banks, savings and
loan associations and savings
21 banks. The banks, savings and loan
associations and savings banks which
22 have main or branch offices in the
county or counties in which all or part
23 of such municipal corporation or
quasi-municipal corporation is located
24 shall be designated as such
official depositories if the municipal or quasi-
25 municipal corporation can obtain
satisfactory security therefor. For pur-
26 poses of this subsection, banks,
savings and loan associations or savings
27 banks organized under the laws of
the United States or another state
28 which do not have a main office in
this state, may be designated as de-
29 positories of such municipal
corporation's or quasi-municipal corpora-
30 tion's funds in accordance with
this subsection, if such banks, savings and
31 loan associations and savings banks
have branch offices in the county or
32 counties in which all or part of
such municipal corporation or quasi-mu-
33 nicipal corporation is located,
except that such banks, savings and loan
34 associations or savings banks shall
not be eligible to receive deposits ex-
35 cept in accordance with subsection
(c).
36 (b) Every officer
or person depositing public funds shall deposit all
37 such public funds coming into such officer
or person's possession in their
38 name and official title as such officer. If
the governing body of the mu-
39 nicipal corporation or quasi-municipal
corporation fails to designate an
40 official depository or depositories, the
officer thereof having custody of
41 its funds shall deposit such funds with one
or more banks, savings and
42 loan associations or savings banks
which have main or branch offices in
43 the county or counties in which all
or part of such municipal corporation
2
1 or quasi-municipal
corporation is located if satisfactory security can be
2 obtained therefor and if not
then elsewhere, but upon so doing shall serve
3 notice in writing on the governing
body showing the names and locations
4 of such banks, savings and loan
associations and savings banks where such
5 funds are deposited, and upon so
doing the officer having custody of such
6 funds shall not be liable for the
loss of any portion thereof except for
7 official misconduct or for the
misappropriation of such funds by such
8 officer.
9
(c) If eligible banks, savings and loan associations
or savings banks
10 under subsections (a) or (b) cannot
or will not provide an acceptable bid,
11 which shall include services, for
the depositing of public funds under this
12 section, then banks, savings and
loan associations or savings banks organ-
13 ized under the laws of the United
States or another state which do not
14 have a main office in this state,
may receive deposits of such municipal
15 corporation or quasi-municipal
corporation, if such banks, savings and
16 loan associations or savings banks
have been designated as official depos-
17 itories under subsection (a), have
branch offices in the county or counties
18 in which all or part of such
municipal corporation or quasi-municipal
19 corporation is located and the
municipal corporation or quasi-municipal
20 corporation can obtain satisfactory
security therefor.
21 Sec.
2. K.S.A. 1999 Supp. 9-1408 is hereby amended to read as
fol-
22 lows: 9-1408. As used in article 14 of
chapter 9 of the Kansas Statutes
23 Annotated:
24 (a) "Bank" means
any bank incorporated under the laws of this state,
25 or organized under the laws of the United
States and which has a main
26 office in this state;
27 (b) "savings and
loan association" means any savings and loan asso-
28 ciation incorporated under the laws of this
state, or organized under the
29 laws of the United States and which
has a main office in this state;
30 (c) "savings
bank" means any savings bank organized under the laws
31 of the United States and which has
a main office in this state;
32 (d) "centralized
securities depository" means a clearing agency reg-
33 istered with the securities and exchange
commission which provides safe-
34 keeping and book-entry settlement services
to its participants;
35 (e) "municipal
corporation" or "quasi-municipal corporation" in-
36 cludes each investing governmental unit
under K.S.A. 12-1675, and
37 amendments thereto;
38 (f) "main
office" means the place of business specified in the
articles
39 of association, certificate of
authority or similar document, where the
40 business of the institution is
carried on and which is not a branch;
41
(g) "branch" means any office, agency or other place of
business
42 within this state, other than the
main office, at which deposits are re-
43 ceived, checks paid or money lent
with approval of the appropriate reg-
3
1 ulatory authorities. Branch
does not include an automated teller machine,
2 remote service unit or
similar device;
3
(h) "securities," "security entitlements," "financial
assets," "securities
4 account," "security agreement,"
"security interest," "perfection" and
5 "control" shall have the meanings
given such terms under the Kansas
6 uniform commercial code.
7 Sec.
3. K.S.A. 1999 Supp. 12-1675 is hereby amended to read as
8 follows: 12-1675. (a) The governing
body of any county, city, township,
9 school district, area
vocational-technical school, community college, fire-
10 men's relief association, community mental
health center, community fa-
11 cility for the mentally retarded or any
other governmental entity, unit or
12 subdivision in the state of Kansas having
authority to receive, hold and
13 expend public moneys or funds may invest
any moneys which are not
14 immediately required for the purposes for
which the moneys were col-
15 lected or received, and the investment of
which is not subject to or reg-
16 ulated by any other statute.
17 (b) Such moneys
shall be invested only:
18 (1) In temporary
notes or no-fund warrants issued by such investing
19 governmental unit;
20 (2) in time
deposit, open accounts, certificates of deposit or time cer-
21 tificates of deposit with maturities of not
more than two years: (A) In
22 banks, savings and loan
associations and savings banks, which have main
23 or branch offices located in such
investing governmental unit; or (B) if
24 no main or branch office of a bank,
savings and loan association or savings
25 bank is located in such investing
governmental unit, then in banks, savings
26 and loan associations and savings
banks, which have main or branch of-
27 fices in the county or counties in
which all or part of such investing gov-
28 ernmental unit is
located;
29 (3) in repurchase
agreements with: (A) banks, savings and loan
as-
30 sociations and savings banks, which
have main or branch offices located
31 in such investing governmental
unit, for direct obligations of, or obliga-
32 tions that are insured as to principal and
interest by, the United States
33 government or any agency thereof;
or (B) (i) if no main or branch office
34 of a bank, savings and loan
association or savings bank, is located in such
35 investing governmental unit; or
(ii) if no such bank, savings and loan
36 association or savings bank having
a main or branch office located in such
37 investing governmental unit is
willing to enter into such an agreement
38 with the investing governmental
unit at an interest rate equal to or greater
39 than the investment rate, as
defined in subsection (g) of K.S.A. 1999 Supp.
40 12-1675a, then such repurchase
agreements may be entered into with
41 banks, savings and loan
associations or savings banks which have main or
42 branch offices in the county or
counties in which all or part of such in-
43 vesting governmental unit is
located; or (C) if no bank, savings and loan
4
1 association or savings bank,
having a main or branch office in such county
2 or counties is willing to
enter into such an agreement with the investing
3 governmental unit at an
interest rate equal to or greater than the invest-
4 ment rate, as defined in
subsection (g) of K.S.A. 1999 Supp. 12-1675a,
5 then such repurchase
agreements may be entered into with banks, savings
6 and loan associations or
savings banks;
7 (4) in
United States treasury bills or notes with maturities as the
gov-
8 erning body shall determine, but not
exceeding two years. Such invest-
9 ment transactions shall only be
conducted with banks, savings and loan
10 associations and savings banks; the federal
reserve bank of Kansas City,
11 Missouri; or with primary government
securities dealers which report to
12 the market report division of the federal
reserve bank of New York, or
13 any broker-dealer engaged in the business
of selling government securi-
14 ties which is registered in compliance with
the requirements of section
15 15 or 15C of the securities exchange act of
1934 and registered pursuant
16 to K.S.A. 17-1254, and amendments
thereto;
17 (5) in the
municipal investment pool fund established in K.S.A. 1999
18 Supp. 12-1677a, and amendments thereto;
19 (6) in the
investments authorized and in accordance with the condi-
20 tions prescribed in K.S.A. 1999 Supp.
12-1677b, and amendments
21 thereto; or
22 (7) in multiple
municipal client investment pools managed by the
23 trust departments of banks which
have main or branch offices located in
24 the county or counties where such
investing governmental unit is located
25 or with trust companies
incorporated under the laws of this state which
26 have contracted to provide trust
services under the provisions of K.S.A.
27 9-2107, and amendments thereto,
with banks which have main or branch
28 offices located in the county or
counties in which such investing govern-
29 mental unit is located.
Public moneys invested under this paragraph shall
30 be secured in the same manner as provided
for under K.S.A. 9-1402, and
31 amendments thereto. Pooled investments of
public moneys made by trust
32 departments under this paragraph shall be
subject to the same terms,
33 conditions and limitations as are
applicable to the municipal investment
34 pool established by K.S.A. 1999 Supp.
12-1677a, and amendments
35 thereto.
36 (c) The
investments authorized in paragraphs (4), (5), (6) or (7) of
37 subsection (b) shall be utilized only if
the banks, savings and loan asso-
38 ciations and savings banks eligible for
investments authorized in para-
39 graph (2) of subsection (b), cannot or will
not make the investments au-
40 thorized in paragraph (2) of subsection (b)
available to the investing
41 governmental unit at interest rates equal
to or greater than the investment
42 rate, as defined in subsection (g) of
K.S.A. 1999 Supp. 12-1675a.
43 (d) In
selecting a depository pursuant to paragraph (2) of
subsection
5
1 (b), if a bank, savings and
loan association or savings bank eligible for an
2 investment deposit thereunder
has an office located in the investing gov-
3 ernmental unit and such
financial institution will make such deposits avail-
4 able to the investing
governmental unit at interest rates equal to or
greater
5 than the investment rate, as
defined in subsection (g) of K.S.A. 1999 Supp.
6 12-1675a, and such financial
institution otherwise qualifies for such de-
7 posit, the investing
governmental unit shall select one or more of such
8 eligible financial
institutions for deposit of funds pursuant to this
section.
9 If no such financial
institution qualifies for such deposits, the investing
10 governmental unit shall select for
such deposits one or more eligible
11 banks, savings and loan
associations or savings banks which have offices
12 in the county or counties in which
all or a part of such investing govern-
13 mental unit is located which will
make such deposits available to the
14 investing governmental unit at
interest rates equal to or greater than the
15 investment rate, as defined in
subsection (g) of K.S.A. 1999 Supp. 12-
16 1675a, and which otherwise qualify
for such deposits.
17
(e) (1) All security purchases and repurchase
agreements shall occur
18 on a delivery versus payment basis.
19 (2) All
securities, including those acquired by repurchase agreements,
20 shall be perfected in the name of the
investing governmental unit and
21 shall be delivered to the purchaser or a
third-party custodian which may
22 be the state treasurer.
23 Sec.
4. K.S.A. 1999 Supp. 12-1675a is hereby amended to read as
24 follows: 12-1675a. As used in K.S.A.
12-1675, 12-1676 and 12-1677 and
25 K.S.A. 1999 Supp. 12-1677a and 12-1677b,
and amendments thereto:
26 (a) "Bank" means
any bank incorporated under the laws of this state,
27 or organized under the laws of the United
States and which has a main
28 office in this state;
29 (b) "savings and
loan association" means any savings and loan asso-
30 ciation incorporated under the laws of this
state, or organized under the
31 laws of the United States and which
has a main office in this state;
32 (c) "savings
bank" means any savings bank organized under the laws
33 of the United States and which has
a main office in this state;
34
(d) "municipality" includes each investing governmental unit
under
35 K.S.A. 12-1675, and amendments thereto;
36 (e) "main
office" means the place of business specified in the
articles
37 of association, certificate of
authority or similar document, where the
38 business of the institution is
carried on and which is not a branch;
39
(f) "branch" means any office, agency or other place of
business
40 within this state, other than the
main office, at which deposits are re-
41 ceived, checks paid or money lent
with approval of the appropriate reg-
42 ulatory authorities. Branch does
not include an automated teller machine,
43 remote service unit or similar
device; and
6
1
(g) "investment rate" means a rate which is the
equivalent yield for
2 United States government securities
having a maturity date as published
3 in the Wall Street Journal, nearest
the maturity date for equivalent ma-
4 turities. The 0-90 day rate shall be
computed on the average effective
5 federal funds rate as published by
the federal reserve system for the
6 previous week.
7 Sec. 5. K.S.A. 1999 Supp.
9-1401, 9-1408, 12-1675 and 12-1675a are
8 hereby repealed.
9 Sec. 6. This act
shall take effect and be in force from and after its
10 publication in the statute book.