Session of 1998
                   
HOUSE BILL No. 2809
         
By Committee on Federal and State Affairs
         
2-4
            9             AN ACT relating to financial institutions; concerning electronic fund
10             transfers; definitions; amending K.S.A. 17-5565, 17-5566, 17-5567, 17-
11             5568, 17-5570 and 75-4201 and K.S.A. 1997 Supp. 9-1111, 9-1408 and
12             12-1675a and repealing the existing sections; also repealing K.S.A.
13             17-5569 and K.S.A. 1997 Supp. 9-1111d.
14            
15       Be it enacted by the Legislature of the State of Kansas:
16           New Section 1. As used in sections 1 through 4:
17           (a) (1) ``Access device'' means a card, code or other means of access
18       to a consumer's account, or any combination thereof, that may be used
19       by the consumer to initiate electronic fund transfers.
20           (2) An access device becomes an accepted access device when the
21       consumer:
22           (A) Requests and receives, or signs, or uses or authorizes another to
23       use, the access device to transfer money between accounts or to obtain
24       money, property or services;
25           (B) requests validation of an access device issued on an unsolicited
26       basis; or
27           (C) receives an access device in renewal of, or in substitution for, an
28       accepted access device from either the financial institution that initially
29       issued the device or a successor.
30           (b) ``Account'' means a demand deposit (checking), savings or other
31       consumer asset account (other than an occasional or incidental credit
32       balance in a credit plan) held directly or indirectly by a financial institution
33       and established primarily for personal, family or household purposes. The
34       term does not include an account held by a financial institution under a
35       bona fide trust agreement.
36           (c) ``Business day'' means any day on which the offices of the con-
37       sumer's financial institution are open to the public for carrying on sub-
38       stantially all business functions.
39           (d) ``Consumer'' means a natural person.
40           (e) ``Credit'' means the right granted by a financial institution to a
41       consumer to defer payment of debt, incur debt and defer its payment, or
42       purchase property or services and defer payment therefor.
43           (f) ``Electronic fund transfer'' means any transfer of funds, other than

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  1       a transaction originated by check, draft or similar paper instrument, that
  2       is initiated through an electronic terminal, telephone, computer or mag-
  3       netic tape for the purpose of ordering, instructing or authorizing a finan-
  4       cial institution to debit or credit an account. The term includes, but is
  5       not limited to:
  6           (1) Point-of-sale transfers;
  7           (2) automated teller machine transfers;
  8           (3) direct deposits or withdrawals of funds;
  9           (4) transfers initiated by telephone; and
10           (5) transfers resulting from debit card transactions, whether or not
11       initiated through an electronic terminal.
12           The term does not include payments made by check, draft or similar
13       paper instrument at an electronic terminal.
14           (g) ``Electronic terminal'' means an electronic device, other than a
15       telephone operated by a consumer, through which a consumer may ini-
16       tiate an electronic fund transfer. The term includes, but is not limited to,
17       point-of-sale terminals, automated teller machines and cash dispensing
18       machines.
19           (h) ``Financial institution'' means a bank, savings association, credit
20       union or any other person that directly or indirectly holds an account
21       belonging to a consumer, or that issues an access device and agrees with
22       a consumer to provide electronic fund transfer services.
23           (i) ``Person'' means a natural person or an organization, including a
24       corporation, government agency, estate, trust, partnership, proprietor-
25       ship, cooperative or association.
26           (j) ``Unauthorized electronic fund transfer'' means an electronic fund
27       transfer from a consumer's account initiated by a person other than the
28       consumer without actual authority to initiate the transfer and from which
29       the consumer receives no benefit. The term does not include an elec-
30       tronic fund transfer initiated:
31           (1) By a person who was furnished the access device to the con-
32       sumer's account by the consumer, unless the consumer has notified the
33       financial institution that transfers by that person are no longer authorized;
34           (2) with fraudulent intent by the consumer or any person acting in
35       concert with the consumer; or
36           (3) by the financial institution or its employee.
37           New Sec. 2. (a) A consumer may be held liable, within the limitations
38       described in subsection (b), for an unauthorized electronic fund transfer
39       involving the consumer's account only if the financial institution has pro-
40       vided the disclosures required by section 3. If the unauthorized transfer
41       involved an access device, it must be an accepted access device and the
42       financial institution must have provided a means to identify the consumer
43       to whom it was issued.

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  1           (b) A consumer's liability for an unauthorized electronic fund transfer
  2       or a series of related unauthorized transfers shall be determined as fol-
  3       lows:
  4           (1) If the consumer notifies the financial institution within four busi-
  5       ness days after learning of the loss or theft of the access device, the
  6       consumer's liability shall not exceed the lesser of $50 or the amount of
  7       unauthorized transfers that occur before notice to the financial institution.
  8           (2) If the consumer fails to notify the financial institution within four
  9       business days after learning of the loss or theft of the access device, the
10       consumer's liability shall not exceed the lesser of $300 or the sum of:
11           (A) Fifty dollars or the amount of unauthorized transfers that occur
12       within the four business days, whichever is less; and
13           (B) the amount of unauthorized transfers that occur after the close
14       of four business days and before notice to the institution, provided the
15       institution establishes that these transfers would not have occurred had
16       the consumer notified the institution within that four-day period.
17           (3) A consumer must report an unauthorized electronic fund transfer
18       that appears on a periodic statement within 60 days of the financial in-
19       stitution's transmittal of the statement to avoid liability for subsequent
20       transfers. If the consumer fails to do so, the consumer's liability shall not
21       exceed the amount of the unauthorized transfers that occur after the close
22       of the 60 days and before notice to the institution, and that the institution
23       establishes would not have occurred had the consumer notified the in-
24       stitution within the 60-day period. When an access device is involved in
25       the unauthorized transfer, the consumer may be liable for other amounts
26       set forth in paragraphs (1) or (2) of this subsection, as applicable.
27           (4) If the consumer's delay in notifying the financial institution was
28       due to extenuating circumstances, the institution shall extend the times
29       specified above to a reasonable period.
30           (5) (A) Notice to a financial institution is given when a consumer
31       takes steps reasonably necessary to provide the institution with the per-
32       tinent information, whether or not a particular employee or agent of the
33       institution actually receives the information.
34           (B) The consumer may notify the institution in person, by telephone,
35       or in writing.
36           (C) Written notice is considered given at the time the consumer mails
37       the notice or delivers it for transmission to the institution by any other
38       usual means. Notice may be considered constructively given when the
39       institution becomes aware of circumstances leading to the reasonable be-
40       lief that an unauthorized transfer to or from the consumer's account has
41       been or may be made.
42           New Sec. 3. (a) A financial institution shall make the disclosures re-
43       quired by this section at the time a consumer contracts for an electronic

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  1       fund transfer service or before the first electronic fund transfer is made
  2       involving the consumer's account.
  3           (b) A financial institution shall provide the following disclosures, as
  4       applicable:
  5           (1) A summary of the consumer's liability, under section 2 or other
  6       applicable law for unauthorized electronic fund transfers.
  7           (2) The telephone number and address of the person or office to be
  8       notified when the consumer believes that an unauthorized electronic fund
  9       transfer has been or may be made.
10           (3) The financial institution's business days.
11           New Sec. 4. A financial institution utilizing an electronic terminal
12       may impose a transaction fee for the use of the electronic terminal, pro-
13       vided that the imposition of the fee is disclosed visually by placard and
14       electronic display at a time and manner that allows a user to terminate
15       or cancel the transaction without incurring the transaction fee. The trans-
16       action fee shall not exceed $2 or 4% of the gross amount of the transac-
17       tion, whichever is less.
18           Sec. 5. K.S.A. 1997 Supp. 9-1111 is hereby amended to read as fol-
19       lows: 9-1111. The general business of every bank shall be transacted at
20       the place of business specified in its certificate of authority and at one or
21       more branch banks established and operated as provided in this section.
22       Except for the establishment or operation of a trust branch bank or the
23       relocation of an existing trust branch bank pursuant to K.S.A. 1997 Supp.
24       9-1135 and amendments thereto, it shall be unlawful for any bank to
25       establish and operate any branch bank or relocate an existing branch bank
26       except as hereinafter provided. Notwithstanding the provisions of this
27       section, any location at which a depository institution, as defined by K.S.A.
28       9-701 and amendments thereto, receives deposits, renews time deposits,
29       closes loans, services loans or receives payments on loans or other obli-
30       gations, as agent, for a bank pursuant to subsection (25) of K.S.A. 9-1101
31       and amendments thereto or other applicable state or federal law, or is
32       authorized to open accounts or receive deposits under subsection (28) of
33       K.S.A. 9-1101, and amendments thereto, shall not be deemed to be a
34       branch bank:
35           (a) For the purposes of this section, the term ``branch bank'' means
36       any office, agency or other place of business located within this state,
37       other than the place of business specified in the bank's certificate of
38       authority, at which deposits are received, checks paid, money lent or trust
39       authority exercised, if approval has been granted by the state bank com-
40       missioner, under K.S.A. 9-1602, and amendments thereto;
41           (b) after first applying for and obtaining the approval of the state
42       banking board, one or more branch banks may be established and oper-
43       ated anywhere within this state by a bank incorporated under the laws of

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  1       this state;
  2           (c) an application to establish and operate a branch bank or to relo-
  3       cate an existing branch bank shall be in such form and contain such in-
  4       formation as the rules and regulations of the state bank commissioner,
  5       adopted pursuant to K.S.A. 9-1713, and amendments thereto, shall pro-
  6       vide;
  7           (d) the application shall include estimates of the annual income and
  8       expenses of the proposed branch bank, the annual volume of business to
  9       be transacted by it, the nature of the banking business to be conducted
10       at the proposed branch bank, the primary geographical area to be served
11       by it and the personnel and office facilities to be provided at the proposed
12       branch bank;
13           (e) the application shall include the name selected for the proposed
14       branch bank. The name selected for the proposed branch bank shall not
15       be the name of any other bank or branch bank doing business in the same
16       city or town nor shall the name selected be required to contain the name
17       of the applicant bank. If the name selected for the proposed bank does
18       not contain the name of the applicant bank, the branch bank shall provide
19       in the public lobby of such branch bank, a public notice that it is a branch
20       bank of the applicant bank;
21           (f) the application shall include an affidavit of publication of notice
22       that applicant bank intends to file an application to establish a branch
23       bank or relocate an existing branch bank. The notice shall be published
24       in a newspaper of general circulation in the county where the applicant
25       bank proposes to locate the branch bank. The notice shall be in the form
26       prescribed by the state banking board and at a minimum shall contain,
27       the name and address of the applicant bank, the location of the proposed
28       branch, a solicitation for written comments concerning the proposed
29       branch be submitted to the state banking board, and provide for a com-
30       ment period of not less than 10 days prior to the board's final consider-
31       ation of the application;
32           (g) upon receipt of an application meeting the above requirements,
33       if there is any written objection to the application filed with the board,
34       within 60 days after receipt of the application, the state banking board
35       shall hold a hearing in the county in which the applicant bank seeks to
36       establish and operate a branch bank. If there is no written objection filed
37       with the board within the time period specified under subsection (f), the
38       board may hold a hearing on the application in such county. Notice of
39       the time, date and place of such hearing if one is to be held shall be
40       published in a newspaper of general circulation in such county by the
41       bank seeking to establish and operate the branch bank not less than 10
42       or more than 30 days prior to the date of the hearing, and an affidavit of
43       publication thereof shall be filed with the commissioner. Not less than

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  1       10 days or more than 30 days prior to any such date of the hearing, the
  2       commissioner shall give notice of the time, date and place of such hearing
  3       by registered or certified mail to all banks and national banking associa-
  4       tions having their principal places of business or branch banks in the
  5       county wherein the applicant bank seeks to locate a branch bank. At any
  6       such hearing, all interested persons shall be allowed to present written
  7       and oral evidence to the board in support of or in opposition to the ap-
  8       plication. Upon completion of a transcript of the testimony given at any
  9       such hearing, the transcript shall be filed in the office of the commissioner
10       and copies shall be furnished to the members of the state banking board
11       not less than 14 days prior to the meeting of the board at which the
12       application will be considered;
13           (h) the state banking board shall approve or disapprove the applica-
14       tion, within 90 days after consideration of the application and the evi-
15       dence gathered during the board's investigation. If the board finds that:
16           (1) There is or will be at the time the branch bank is opened the need
17       for the same in the community to be served by it;
18           (2) there is a reasonable probability of usefulness and success of the
19       proposed branch bank;
20           (3) the applicant bank's financial history and condition is sound; and
21           (4) the proposed branch bank can be established without undue in-
22       jury to properly conducted existing banks and national banking associa-
23       tions, the application shall be granted, otherwise, the application shall be
24       denied;
25           (i) any final action of the board approving or disapproving an appli-
26       cation shall be subject to review in accordance with the act for judicial
27       review and civil enforcement of agency actions upon the petition of any
28       adversely affected or aggrieved person who appeared and offered evi-
29       dence at the hearing upon the application;
30           (j) any branch bank lawfully established and operating on the effec-
31       tive date of this act may continue to be operated by the bank then op-
32       erating the branch bank and by any successor bank;
33           (k) branch banks which have been established and are being main-
34       tained by a bank at the time of its merger into or consolidation with
35       another bank or at the time its assets are purchased and its liabilities are
36       assumed by another bank may continue to be operated by the surviving,
37       resulting or purchasing and assuming bank. The surviving, resulting or
38       purchasing and assuming bank, with approval of the state bank commis-
39       sioner, may establish and operate a branch bank or banks at the site or
40       sites of the merged, constituent or liquidated bank or banks;
41           (l) any state bank or national banking association having its principal
42       office and main banking house in this state may provide and engage in
43       banking transactions by means of ;(Rx)mote service units electronic terminals

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  1       wherever located, which ;(Rx)mote service units electronic terminals shall
  2       not be considered to be branch banks authorized herein. Any banking
  3       transaction effected by use of a ;(Rx)mote service unit electronic terminal
  4       shall be deemed to be transacted at a bank and not at a remote service
  5       unit an electronic terminal;
  6           (m) as a condition to the operation and use of any ;(Rx)mote service unit
  7       electronic terminal in this state, a state bank or national banking associ-
  8       ation, each hereinafter referred to as a bank, which desires to operate or
  9       enable its customers to utilize a remote service unit an electronic terminal
10       must agree that such ;(Rx)mote service unit electronic terminal will be avail-
11       able for use by customers of any other bank or banks upon the request
12       of such bank or banks to share its use and the agreement of such bank
13       or banks to share all costs, including a reasonable return on capital ex-
14       penditures incurred in connection with its development, installation and
15       operation. The owner of the ;(Rx)mote service unit electronic terminal,
16       whether a bank or any other person, shall make the ;(Rx)mote service unit
17       electronic terminal available for use by other banks and their customers
18       on a nondiscriminatory basis, conditioned upon payment of a reasonable
19       proportion of all costs, including a reasonable return on capital expendi-
20       tures incurred in connection with the development, installation and op-
21       eration of the ;(Rx)mote service unit electronic terminal. Notwithstanding
22       the foregoing provisions of this subsection, a remote service unit an elec-
23       tronic terminal located on the property owned or leased by the bank
24       where the principal place of business of a bank, or an attached auxiliary
25       teller facility or branch bank of a bank, is located need not be made
26       available for use by any other bank or banks or customers of any other
27       bank or banks;
28           (n) for purposes of this section, ``remote service unit'' means an elec-
29       tronic information processing device, including associated equipment,
30       structures and systems, through or by means of which information relat-
31       ing to financial services rendered to the public is stored and transmitted,
32       whether instantaneously or otherwise, to a bank and which, for activation
33       and account access, is dependent upon the use of a machine-readable
34       instrument in the possession and control of the holder of an account with
35       a bank. The term shall include ``online'' computer terminals and ``offline''
36       automated cash dispensing machines and automated teller machines, but
37       shall not include computer terminals or automated teller machines or
38       automated cash dispensing machines using systems in which account
39       numbers are not machine read and verified. Withdrawals by means of
40       ``offline'' systems shall not exceed $300 per transaction and shall be re-
41       stricted to individual not corporate or commercial accounts ``electronic
42       terminal'' shall have the same meaning as ascribed to that term in section
43       1.

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  1           Sec. 6. K.S.A. 1997 Supp. 9-1408 is hereby amended to read as fol-
  2       lows: 9-1408. As used in article 14 of chapter 9 of the Kansas Statutes
  3       Annotated:
  4           (a) ``Bank'' means any bank incorporated under the laws of this state,
  5       or organized under the laws of the United States and which has a main
  6       office in this state;
  7           (b) ``savings and loan association'' means any savings and loan asso-
  8       ciation incorporated under the laws of this state, or organized under the
  9       laws of the United States and which has a main office in this state;
10           (c) ``savings bank'' means any savings bank organized under the laws
11       of the United States and which has a main office in this state;
12           (d) ``centralized securities depository'' means a clearing agency reg-
13       istered with the securities and exchange commission which provides safe-
14       keeping and book-entry settlement services to its participants;
15           (e) ``municipal corporation'' or ``quasi-municipal corporation'' in-
16       cludes each investing governmental unit under K.S.A. 12-1675, and
17       amendments thereto;
18           (f) ``main office'' means the place of business specified in the articles
19       of association, certificate of authority or similar document, where the
20       business of the institution is carried on and which is not a branch;
21           (g) ``branch'' means any office, agency or other place of business
22       within this state, other than the main office, at which deposits are re-
23       ceived, checks paid or money lent with approval of the appropriate reg-
24       ulatory authorities. Branch does not include an automated teller machine,
25       remote service unit or similar device electronic terminal, as defined in
26       section 1;
27           (h) ``securities,'' ``security entitlements,'' ``financial assets,'' ``securities
28       account,'' ``security agreement,'' ``security interest,'' ``perfection'' and
29       ``control'' shall have the meanings given such terms under the Kansas
30       uniform commercial code.
31           Sec. 7. K.S.A. 1997 Supp. 12-1675a is hereby amended to read as
32       follows: 12-1675a. As used in K.S.A. 12-1675, 12-1676 and 12-1677 and
33       K.S.A. 1997 Supp. 12-1677a and 12-1677b, and amendments thereto:
34           (a) ``Bank'' means any bank incorporated under the laws of this state,
35       or organized under the laws of the United States and which has a main
36       office in this state;
37           (b) ``savings and loan association'' means any savings and loan asso-
38       ciation incorporated under the laws of this state, or organized under the
39       laws of the United States and which has a main office in this state;
40           (c) ``savings bank'' means any savings bank organized under the laws
41       of the United States and which has a main office in this state;
42           (d) ``municipality'' includes each investing governmental unit under
43       K.S.A. 12-1675, and amendments thereto;

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  1           (e) ``main office'' means the place of business specified in the articles
  2       of association, certificate of authority or similar document, where the
  3       business of the institution is carried on and which is not a branch;
  4           (f) ``branch'' means any office, agency or other place of business
  5       within this state, other than the main office, at which deposits are re-
  6       ceived, checks paid or money lent with approval of the appropriate reg-
  7       ulatory authorities. Branch does not include an automated teller machine,
  8       remote service unit or similar device electronic terminal as defined in
  9       section 1; and
10           (g) ``investment rate'' means a rate which is the equivalent yield for
11       United States government securities having a maturity date as published
12       in the Wall Street Journal, nearest the maturity date for equivalent ma-
13       turities. The 0-90 day rate shall be computed on the average effective
14       federal funds rate as published by the federal reserve system for the
15       previous week.
16           Sec. 8. K.S.A. 17-5565 is hereby amended to read as follows: 17-
17       5565. Any savings and loan association or savings bank having its principal
18       office in this state may provide and engage in financial transactions by
19       means of ;(Rx)mote service units electronic terminals wherever located. Such
20       ;(Rx)mote service units electronic terminals shall not be considered to be
21       branch offices or agencies. Any financial transaction effected by use of a
22       remote service unit an electronic terminal shall be deemed to be trans-
23       acted at the savings and loan association to which the information is trans-
24       mitted for entry into a customer's account.
25           Sec. 9. K.S.A. 17-5566 is hereby amended to read as follows: 17-
26       5566. As a general condition to the operation and use of any ;(Rx)mote
27       service unit electronic terminal in this state, a savings and loan association,
28       which desires to operate or enable its customers to utilize a remote service
29       unit an electronic terminal must agree that such ;(Rx)mote service unit elec-
30       tronic terminal will be available for use by customers of any other savings
31       and loan association, upon the request of such association to share its use
32       and the agreement of such association to share all costs incurred in con-
33       nection with its development, installation and operation. The owner of
34       the ;(Rx)mote service unit electronic terminal, whether a savings and loan
35       association or any other person, shall make the ;(Rx)mote service unit elec-
36       tronic terminal available for use by other savings and loan associations
37       and their customers on a nondiscriminatory basis, conditioned upon pay-
38       ment of a reasonable proportion of all costs incurred in connection with
39       the development, installation and operation of the ;(Rx)mote service unit
40       electronic terminal. Notwithstanding the foregoing provisions, this section
41       shall not require that ;(Rx)mote service units electronic terminals located
42       on, or a part of, the physical structure of the home office facility or branch
43       office facility of any savings and loan association be shared with any other

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  1       savings and loan association.
  2           Sec. 10. K.S.A. 17-5567 is hereby amended to read as follows: 17-
  3       5567. Any savings and loan association shall be permitted to extend credit
  4       by means of a prearranged revolving credit account, in an amount not to
  5       exceed ten percent (10%) 10% of the total assets of the savings and loan
  6       association, when such credit is extended through the use of a remote
  7       service unit. Revolving credit account withdrawals shall not exceed
  8       $300.00 per transaction and shall be restricted to individuals, not corpo-
  9       rate or commercial accounts an electronic terminal.
10           Sec. 11. K.S.A. 17-5568 is hereby amended to read as follows: 17-
11       5568. A savings and loan association shall take all steps necessary to pro-
12       tect the association's interest in the financial transactions processed at
13       each ;(Rx)mote service unit electronic terminal, including the installation,
14       maintenance and operation of one or more appropriate security devices
15       and the acquisition of available fidelity, forgery and other appropriate
16       insurance. Appropriate security devices as a condition for operation of a
17       remote service unit an electronic terminal, where the ;(Rx)mote service unit
18       electronic terminal is unmanned, shall include, but not be limited to: a
19       lighting system for illuminating such unit during hours of darkness; tam-
20       per-resistant locks on the exterior unit; an alarm system or other appro-
21       priate device for promptly notifying the nearest responsible law enforce-
22       ment officers of an attempted or perpetrated robbery or burglary; security
23       provisions that will not allow the data communications linkage to be vul-
24       nerable to a wire tap or intervention from a foreign source; and such
25       other devices as the security officer for the savings and loan association
26       shall, after seeking the advice of law enforcement officers, determine to
27       be appropriate for discouraging robbery, burglary or larceny and for as-
28       sisting in the identification and apprehension of persons attempting such
29       acts. Security devices as a condition of operation of a manned ;(Rx)mote
30       service unit electronic terminal shall include, but not be limited to: se-
31       curity provisions that will not allow the data communications linkage to
32       be vulnerable to a wire tap or intervention from a foreign source and such
33       other devices as the security officer for the savings and loan association
34       shall, after seeking the advice of law enforcement officers, determine to
35       be appropriate for discouraging robbery, burglary or larceny and for as-
36       sisting in the identification and apprehension of persons attempting such
37       acts.
38           Sec. 12. K.S.A. 17-5570 is hereby amended to read as follows: 17-
39       5570. For the purposes of this act: (a) The term ``Financial transactions''
40       shall include receiving deposits of every kind and nature, receiving pay-
41       ments payable to the savings and loan association and making withdrawals
42       from the customer's account, but such term shall not include opening an
43       account or initiating a loan.

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  1           (b) The term ``remote service unit'' shall mean an electronic infor-
  2       mation processing device, including associated equipment, structures and
  3       systems, through or by means of which information relating to financial
  4       services rendered to the public is stored and transmitted, whether in-
  5       stantaneously or otherwise, to a savings and loan association and which,
  6       for activation and account access, is dependent upon the use of a machine-
  7       readable instrument, other than a passbook, in the possession and control
  8       of the holder of an account with a savings and loan association. The term
  9       ``remote service unit'' shall include ``on-line'' computer terminals and ``on-
10       line'' or ``off-line'' automated cash dispensing machines and automated
11       teller machines, but shall not include computer terminals, automated cash
12       dispensing machines or automated teller machines using systems in which
13       account numbers are not machine-read and verified ``Electronic terminal''
14       shall have the same meaning as ascribed to that term in section 1.
15           (c) The term ``Savings and loan association'' shall mean means any
16       state chartered savings and loan association in which deposits are insured
17       or any federally chartered savings and loan association domiciled in this
18       state.
19           Sec. 13. K.S.A. 75-4201 is hereby amended to read as follows: 75-
20       4201. As used in this act, unless the context otherwise requires:
21           (a) ``Treasurer'' means state treasurer.
22           (b) ``Controller'' means director of accounts and reports.
23           (c) ``Board'' means the pooled money investment board.
24           (d) ``Bank'' means a bank incorporated under the laws of this state,
25       or organized under the laws of the United States or another state and
26       which has a main or branch office in this state.
27           (e) ``State moneys'' means all moneys in the treasury of the state or
28       coming lawfully into the possession of the treasurer.
29           (f) ``State bank account'' means state moneys or fee agency account
30       moneys deposited in accordance with the provisions of this act.
31           (g) ``Operating account'' means a state bank account which is payable
32       or withdrawable, in whole or in part, on demand.
33           (h) ``Investment account'' means a state bank account which is not
34       payable on demand.
35           (i) ``Fee agency account'' means a state bank account of any state
36       agency consisting of fees, tuition or charges authorized by law prior to
37       remittance to the state treasurer.
38           (j) ``Disbursement'' means a payment of any kind whatsoever made
39       from the state treasury or from any operating account, except transfer of
40       moneys between or among operating accounts and investment accounts
41       or either or both of them.
42           (k) ``Securities'' means, for the purposes of this section and K.S.A.
43       75-4218, and amendments thereto, securities, security entitlements, fi-

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  1       nancial assets and securities account consisting of any one or more of the
  2       following, and security entitlements thereto, which may be accepted or
  3       rejected by the pooled money investment board:
  4           (1) Direct obligations of, or obligations that are insured as to principal
  5       and interest by, the United States government or any agency thereof and
  6       obligations, letters of credit and securities of United States sponsored
  7       enterprises which under federal law may be accepted as security for pub-
  8       lic funds.
  9           (2) Kansas municipal bonds which are general obligations of the mu-
10       nicipality issuing the same.
11           (3) Revenue bonds of any agency or arm of the state of Kansas.
12           (4) Revenue bonds of any municipality, as defined by K.S.A. 10-101,
13       and amendments thereto, within the state of Kansas or bonds issued by
14       a public building commission as authorized by K.S.A. 12-1761, and
15       amendments thereto, if approved by the state bank commissioner, except
16       (A) bonds issued under the provisions of K.S.A. 12-1740 et seq., and
17       amendments thereto, unless such bonds are rated at least MIG-1 or Aa
18       by Moody's Investors Service or AA by Standard & Poor's Corp. and (B)
19       bonds secured by revenues of a utility which has been in operation for
20       less than three years. Any expense incurred in connection with granting
21       approval of revenue bonds shall be paid by the applicant for approval.
22           (5) Temporary notes of any municipal corporation or quasi-municipal
23       corporation within the state of Kansas which are general obligations of
24       the municipal corporation or quasi-municipal corporation issuing the
25       same.
26           (6) Warrants of any municipal corporation or quasi-municipal cor-
27       poration within the state of Kansas the issuance of which is authorized
28       by the state board of tax appeals and which are payable from the proceeds
29       of a mandatory tax levy.
30           (7) Bonds of any municipal or quasi-municipal corporation of the
31       state of Kansas which have been refunded in advance of their maturity
32       and are fully secured as to payment of principal and interest thereon by
33       deposit in trust, under escrow agreement with a bank, of direct obligations
34       of, or obligations the principal of and the interest on which are uncon-
35       ditionally guaranteed by, the United States of America. A copy of such
36       escrow agreement shall be furnished to the treasurer.
37           (8) Securities listed in paragraph (14) of subsection (d) of K.S.A. 9-
38       1402 and amendments thereto within limitations of K.S.A. 9-1402 and
39       amendments thereto.
40           (9) A corporate surety bond guaranteeing deposits in a bank, savings
41       or savings and loan association in excess of federal deposit insurance cor-
42       poration insurance, underwritten by an insurance company authorized to
43       do business in the state of Kansas.

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  1           (10) Commercial paper that does not exceed 270 days to maturity
  2       and which has received one of the two highest commercial paper credit
  3       ratings by a nationally recognized investment rating firm.
  4           (11) All of such securities shall be current as to interest according to
  5       the terms thereof.
  6           (l) ``Savings bank'' means a savings bank organized under the laws of
  7       the United States or another state insured by the federal deposit insur-
  8       ance corporation or its successor and having a main or branch office in
  9       the county in which a state agency making collection of any fees, tuition,
10       or charges is located.
11           (m) ``Savings and loan association'' means a savings and loan associ-
12       ation incorporated under the laws of this state or organized under the
13       laws of the United States or another state, insured by the federal deposit
14       insurance corporation or its successor and having a main or branch office
15       in the county in which a state agency making collection of any fees, tuition
16       or charges is located.
17           (n) ``Custodial bank'' means a bank holding on deposit collateral
18       which is security for state bank accounts.
19           (o) ``Centralized securities depository'' means a clearing agency reg-
20       istered with the securities and exchange commission which provides safe-
21       keeping and book-entry settlement services to its participants.
22           (p) ``Depository bank'' means a bank, savings bank or savings and loan
23       association authorized and eligible to receive state moneys.
24           (q) ``Main office'' means the place of business specified in the articles
25       of association, certificate of authority or similar document, where the
26       business of the institution is carried on and which is not a branch;.
27           (r) ``Branch'' means any office, agency or other place of business
28       within this state, other than the main office, at which deposits are re-
29       ceived, checks paid or money lent with approval of the appropriate reg-
30       ulatory authorities. Branch does not include an automated teller machine,
31       remote service unit or similar device electronic terminal, as defined in
32       section 1;.
33           (s) ``Securities,'' ``security entitlements,'' ``financial assets,'' ``securities
34       account,'' ``security agreement,'' ``security interest,'' ``perfection'' and
35       ``control'' shall have the meanings given such terms under the Kansas
36       uniform commercial code.
37           Sec. 14. K.S.A. 17-5565, 17-5566, 17-5567, 17-5568, 17-5569, 17-
38       5570 and 75-4201 and K.S.A. 1997 Supp. 9-1111, 9-1111d, 9-1408 and
39       12-1675a are hereby repealed.
40           Sec. 15. This act shall take effect and be in force from and after its
41       publication in the statute book.
42      
43