<219>
Session of 2000
SENATE Substitute for HOUSE BILL No. 2559
By Committee on Ways and Means
4-5
10 AN ACT
concerning the Kansas development finance authority; author-
11 izing the sale of
certain state tobacco settlement receipts by the state;
12 creating the Kansas
tobacco settlement financing corporation as sub-
13 sidiary of the Kansas
development finance authority; authorizing the
14 issuance of bonds
payable from tobacco asset payments; amending
15 K.S.A. 74-8909 and
K.S.A. 1999 Supp. 38-2101, 74-8904 and 74-8905
16 and repealing the
existing sections; also repealing K.S.A. 1999 Supp.
17 74-8905a.
18
19 Be it enacted by the Legislature of the
State of Kansas:
20 New Section
1. (a) The following words or terms used in this section
21 shall have the following meanings unless a
different meaning clearly ap-
22 pears from the context:
23 (1) ``Asset sale
agreement'' means the agreement or agreements be-
24 tween the state as seller of the tobacco
assets and the corporation as
25 purchaser of the tobacco assets.
26
(2) ``Corporation'' means the Kansas tobacco settlement
financing
27 corporation created pursuant to subsection
(v) of K.S.A. 74-8904 and
28 amendments thereto.
29 (3) ``Residual
assets'' means the interest of the corporation in the
30 bond proceeds and the tobacco assets and
all revenues, moneys, funds,
31 property, other income or receipts with
respect to the tobacco assets paid
32 or payable to the corporation or a trustee
for the account of the corpo-
33 ration or for the holders of bonds that are
in excess of the expenses of
34 the corporation, the amounts required for
debt service on bonds and any
35 contractual obligations of the
corporation.
36 (4) ``State
tobacco settlement receipts'' means all moneys payable to
37 the state pursuant to the master settlement
agreement, without giving
38 effect to the sale of any portion
thereof.
39 (5) ``Tobacco
assets'' means all right, title and interest in and to the
40 portion of the state tobacco settlement
receipts that may be sold to the
41 corporation from time to time.
42 (6) ``Master
settlement agreement'' means the master settlement
43 agreement and related documents between the
state and leading United
2
1 States tobacco product manufacturers
dated November 23, 1998, and
2 including the consent decree and
final judgment entered in the State of
3 Kansas v. R.J. Reynolds Tobacco
Company et al., district court of Shawnee
4 county, Kansas, division 2, No.
96-CV-919.
5
(7) ``Tobacco asset payments'' means the amounts paid or
payable to
6 the corporation pursuant to an asset
sale agreement.
7 (b) The
secretary of administration is authorized to sell to the cor-
8 poration, from time to time, all or a
portion of the state tobacco settlement
9 receipts and, in particular, to
execute and deliver an asset sale agreement.
10 Such agreement shall provide that the
purchase price payable to the state
11 for the tobacco assets sold shall consist
of the net proceeds (after capi-
12 talized interest, costs, fees, reserves and
credit and liquidity enhance-
13 ments as the corporation determines to be
desirable in issuing, securing
14 and marketing the bonds) of bonds issued
pursuant to subsection (f) of
15 K.S.A. 74-8905 and amendments thereto, to
the extent such bonds are
16 not refunding bonds, together with any
interest in the residual assets or
17 any subordinate interest provided in the
asset sale agreement. The pur-
18 chase price payable to the state from the
sale from time to time of all or
19 a portion of the state tobacco settlement
receipts cluding the net
20 proceeds from any bonds issued as
provided under this subsection]
21 shall be deposited in the Kansas endowment
for youth fund. [Expendi-
22 tures from the Kansas endowment for
youth fund shall be made as
23 provided in subsection (d) of K.S.A.
1999 Supp. 38-2102 on the ef-
24 fective date of this act. It is the
intent of the legislature that such
25 proceeds shall be held in trust for
future generations of Kansas.]
26 (c) Any sale of
tobacco assets by the state shall be treated as a true
27 sale and absolute transfer of the property
so transferred and not as a
28 pledge or other security interest for any
borrowing by the state. The
29 characterization of such a sale as an
absolute transfer by the participants
30 shall not be negated or adversely affected
by the fact that only a portion
31 of the state tobacco settlement receipts is
sold, nor by the state's acqui-
32 sition or retention of an ownership
interest in the residual assets or a
33 subordinate interest in the tobacco assets,
nor by a characterization of the
34 bonds or the corporation for purposes of
accounting, taxation or securities
35 regulation, nor by any other factor
whatsoever.
36 (d) On and after
the effective date of a sale of tobacco assets pursuant
37 to an asset sale agreement, the state shall
have no right, title or interest
38 in or to such tobacco assets sold. The
tobacco asset payments shall be
39 property of the corporation or its
transferee or assignee and not of the
40 state, and shall be owned, received, held
and disbursed by the corporation
41 or its transferee or assignee and not the
state. On or before the effective
42 date of any sale of tobacco assets pursuant
to an asset sale agreement, the
43 state shall notify the escrow agent under
the master settlement agreement
3
1 of any tobacco assets which have been
sold to the corporation and irrev-
2 ocably instruct such escrow agent
that, subsequent to an effective date,
3 the tobacco asset payments are to be
paid directly to the corporation or
4 its transferee or assignee.
5 (e) The
state pledges and agrees for the benefit of the holders of any
6 bonds in which the corporation has
included such pledge and agreement,
7 that the state will (1) irrevocably
direct the escrow agent under the master
8 settlement agreement to transfer all
tobacco asset payments directly to
9 the corporation or its transferee or
assignee, (2) enforce the rights of the
10 corporation or its transferee or assignee
to receive the tobacco asset pay-
11 ments to the full extent of the state's
right to receive state tobacco settle-
12 ment receipts pursuant to the terms of the
master settlement agreement,
13 (3) not amend the master settlement
agreement in any manner that would
14 materially impair the rights of the
corporation or the holders of bonds,
15 (4) not limit or alter the rights of the
corporation to fulfill the terms of
16 its agreements with such holders of the
bonds, (5) not authorize the cor-
17 poration to be a debtor under chapter 9 of
the federal bankruptcy code
18 and (6) not in any way impair the rights
and remedies of such holders of
19 the bonds or the security for such bonds
until such bonds, together with
20 the interest thereon and all costs and
expenses in connection with any
21 action or proceeding by or on behalf of
such holders of the bonds, are
22 fully paid and discharged.
23 (f) The secretary
of administration shall obtain the approval of the
24 state finance council prior to executing an
asset sale agreement except
25 that no such approval shall be required if
the terms of such asset sale
26 agreement provide for a purchase price for
tobacco assets, the present
27 value of which, together with the present
value of projected investment
28 earnings on balances on deposit in the
Kansas endowment for youth in
29 excess of the application of funds pursuant
to K.S.A. 1999 Supp. 38-2102
30 and amendments thereto is equal to or
greater than the present value of
31 the projected state tobacco settlement
receipts sold, together with the
32 present value of projected investment
earnings on balances on deposit in
33 the Kansas endowment for youth in excess of
the application of funds
34 pursuant to K.S.A. 1999 Supp. 38-2102 and
amendments thereto. For
35 purposes of this subsection, present value
shall mean the present value
36 calculated assuming a discount rate equal
to the true interest cost of
37 interest payable on bonds or other
obligations to be secured by the to-
38 bacco assets, as certified by the secretary
of administration. For purposes
39 of this subsection, projected investment
earnings shall mean investment
40 earnings at an assumed rate of 10%
compounded annually, as certified
41 by the secretary of administration. For
purposes of this subsection, pro-
42 jected state tobacco settlement receipts
shall mean state tobacco settle-
43 ment receipts projected to be received
assuming (i) inflation at an annual
4
1 rate of 3% beginning as of the first
day of the state fiscal year during
2 which the asset sale agreement is
executed, (ii) volume reductions under
3 the master settlement agreement at an
annual rate of 21/2% beginning
4 as of the first day of the state
fiscal year during which the asset sale
5 agreement is executed and (iii) the
settling states adjustments as provided
6 in the master settlement agreement,
as certified by the secretary of ad-
7 ministration. The approval of the
asset sale agreement by the state finance
8 council, if required pursuant to this
subsection, is hereby characterized
9 as a matter of legislative delegation
and subject to the guidelines pre-
10 scribed in subsection (c) of K.S.A.
75-3711c and amendments thereto.
11 Approval by the state finance council may
be given when the legislature
12 is in session.
13 (g) The sale of
tobacco assets pursuant to subsection (b) shall be by
14 negotiation approved by the secretary of
administration and shall be ex-
15 empt from competitive bid and
public notice requirements applicable to
16 the purchase and sale of property by the
state.
17 (h) The district
court of Shawnee county shall have exclusive juris-
18 diction of any suit brought by or against
the Kansas tobacco settlement
19 financing corporation, and process in such
suit shall be served on the
20 chairperson of the board of directors of
the Kansas tobacco settlement
21 financing corporation.
22 (i) State tobacco
settlement receipts, tobacco assets and tobacco asset
23 payments shall be general intangibles
within the meaning of the Kansas
24 uniform commercial code.
25 Sec.
2. K.S.A. 1999 Supp. 38-2101 is hereby amended to read as
26 follows: 38-2101. (a) There is hereby
established in the state treasury the
27 Kansas endowment for youth fund which shall
constitute a trust fund and
28 shall be invested, managed and administered
in accordance with the pro-
29 visions of this act by the board of
trustees of the Kansas public employees
30 retirement system established by K.S.A.
74-4905 and amendments
31 thereto.
32 (b) All of the
moneys received by the state pursuant to the tobacco
33 litigation settlement agreements entered
into by the attorney general on
34 behalf of the state of Kansas, or pursuant
to any judgment rendered,
35 regarding the litigation against tobacco
industry companies and related
36 entities or pursuant to a sale of the
right to receive such moneys by the
37 secretary of administration on behalf of
the state of Kansas as authorized
38 by section 1 and amendments thereto,
shall be deposited in the state
39 treasury and credited to the Kansas
endowment for youth fund. All such
40 moneys shall constitute an endowment which
shall remain credited to the
41 Kansas endowment for youth fund except as
provided in this section or
42 in K.S.A. 1999 Supp. 38-2102 and amendments
thereto for transfers to
43 the children's initiatives fund.
Expenditures may be made from the Kan-
5
1 sas endowment for youth fund for the
payment of the operating expenses
2 of the Kansas children's cabinet and
the board of trustees, including the
3 expenses of investing and managing
the moneys, which are attributable
4 to the Kansas endowment for youth
fund. All moneys credited to the
5 Kansas endowment for youth fund shall
be invested to provide an ongoing
6 source of investment earnings
available for periodic transfer to the chil-
7 dren's initiatives fund in accordance
with this act. All expenditures from
8 the Kansas endowment for youth fund
shall be made in accordance with
9 appropriation acts upon warrants of
the director of accounts and reports
10 issued pursuant to vouchers approved by the
chairperson of the board of
11 trustees of the Kansas public employees
retirement system or by the
12 chairperson's designee.
13 (c) On the
effective date of this act, the director of accounts and
14 reports shall transfer all moneys credited
to the children's health care
15 programs fund to the Kansas endowment for
youth fund and the chil-
16 dren's health care programs fund is hereby
abolished. On and after July
17 1, 1999, whenever the children's health
care programs fund, or words of
18 like effect, is referred to or designated
by statute, contract or other doc-
19 ument, such reference or designation shall
be deemed to apply to the
20 Kansas endowment for youth fund.
21 Sec.
3. K.S.A. 1999 Supp. 74-8904 is hereby amended to read as
22 follows: 74-8904. Except as otherwise
limited by this act, the authority
23 shall have the following powers to:
24 (a) Sue and be
sued;
25 (b) have a seal
and alter such seal;
26 (c) make and
alter bylaws for its organization and internal
27 management;
28 (d) adopt such
rules and regulations as may be necessary to carry out
29 the purposes of this act;
30 (e) acquire, hold
and dispose of real and personal property of any
31 nature, tangible or intangible, for
its corporate purposes;
32 (f) appoint
officers, agents and employees, prescribe their duties and
33 qualifications and fix their
compensation;
34 (g) borrow money
and to issue notes, bonds and other obligations
35 pursuant to K.S.A. 74-8905, and amendments
thereto, whether or not the
36 interest on which is subject to federal
income taxation, and to provide for
37 the rights of the lenders or holders
thereof;
38 (h) purchase
notes or participations in notes evidencing loans which
39 are secured by mortgages or security
interests and to enter into contracts
40 in that regard;
41 (i) make secured
or unsecured loans for any of the purposes for which
42 bonds of the authority may be issued under
this act or to low and mod-
43 erate income multifamily rental housing
projects participating in pro-
6
1 grams established in section 42 of
the federal internal revenue code, and
2 provide financing for housing
projects and programs in participation with
3 programs established by the United
States department of housing and
4 urban development or the Kansas
department of commerce and housing;
5 except as otherwise provided in this
subsection, nothing in this act shall
6 be construed to authorize the
authority to make loans directly to individ-
7 uals to finance housing
developments;
8 (j) sell
mortgages and security interests at public or private sale, to
9 negotiate modifications or
alterations in mortgage and security interests,
10 to foreclose on any mortgage or security
interest in default or commence
11 any action to protect or enforce any right
conferred upon it by any law,
12 mortgage, security agreement, contract or
other agreement, and to bid
13 for and purchase property which was the
subject of such mortgage or
14 security interest at any foreclosure or at
any other sale, to acquire or take
15 possession of any such property, and to
exercise any and all rights as
16 provided by law for the benefit or
protection of the authority or mortgage
17 holders;
18 (k) collect fees
and charges in connection with its loans, bond guar-
19 antees, commitments and servicing,
including, but not limited to, reim-
20 bursement of costs of financing as the
authority shall determine to be
21 reasonable and as shall be approved by the
authority;
22 (l) make and
execute contracts for the servicing of mortgages ac-
23 quired by the authority pursuant to this
act, and to pay the reasonable
24 value of services rendered to the authority
pursuant to those contracts;
25 (m) enter into
agreements with and accept gifts, grants, loans and
26 other aid from the federal government, the
state, any state agency, any
27 political subdivision of the state, or any
person or corporation, foundation
28 or legal entity, and to agree to and comply
with any conditions attached
29 to federal and state financial assistance
not inconsistent with the provi-
30 sions of this act;
31 (n) invest moneys
of the authority not required for immediate use,
32 including proceeds from the sale of any
bonds, in such manner as the
33 board shall determine, subject to any
agreement with bondholders stated
34 in the authorizing resolution providing for
the issuance of bonds;
35 (o) procure
insurance against any loss in connection with its pro-
36 grams, property and other assets;
37 (p) provide
technical assistance and advice to the state or political
38 subdivisions of the state and to enter into
contracts with the state or
39 political subdivisions of the state to
provide such services. The state or
40 political subdivisions of the state are
hereby authorized to enter into con-
41 tracts with the authority for such services
and to pay for such services as
42 may be provided them;
43 (q) establish
accounts in one or more depositories;
7
1 (r) lease,
acquire, construct, sell and otherwise deal in and contract
2 concerning any facilities;
3 (s) have
and exercise all of the powers granted to the public housing
4 authorities by the state, except that
the authority shall not have the power
5 of eminent domain;
6 (t) do any
and all things necessary or convenient to carry out purposes
7 of the authority and exercise the
powers given and granted in this act;
8 (u) assist
minority businesses in obtaining loans or other means of
9 financial assistance. The terms and
conditions of such loans or financial
10 assistance, including the charges for
interest and other services, will be
11 consistent with the provisions of this act.
In order to comply with this
12 requirement, efforts must be made to
solicit for review and analysis pro-
13 posed minority business ventures. Basic
loan underwriting standards will
14 not be waived to inconsistently favor
minority persons or businesses from
15 the intent of the authority's lending
practices; and
16 (v) form one or
more subsidiary corporations under K.S.A. 17-6001
17 et seq., and amendments thereto, in
accordance with the procedures
18 therein contained or as otherwise
provided in this subsection (v). Each
19 subsidiary corporation shall be subject to
the same restrictions and limi-
20 tations as to the powers and purposes to
which the authority is subject.
21 Each provision of this act regarding the
issuance of bonds or the exercise
22 of any other power or privilege by the
authority shall apply to each sub-
23 sidiary corporation in the exercise of
any power, obligation or duty del-
24 egated by the authority to such
subsidiary corporation. The authority may
25 delegate any of its powers, obligations and
duties to any subsidiary cor-
26 poration by inclusion of such powers,
obligations and duties in the articles
27 of incorporation of the subsidiary
corporation. Subsidiary corporations so
28 formed shall constitute legal entities
separate and distinct from each
29 other, the authority and the state. The
authority shall not be liable for the
30 debts or obligations or for any actions or
inactions of its subsidiary cor-
31 porations unless the authority expressly
agrees otherwise in writing. The
32 authority may make loans or grants to a
subsidiary corporation from time
33 to time to enable the subsidiary
corporation to carry out its purposes. The
34 members of the authority shall constitute
all of the directors of each
35 subsidiary corporation.
36 The state, any
municipality or any state commission, public authority,
37 agency, officer, department, board or
division authorized and empowered
38 to enter into agreements with, to grant,
convey, lease or otherwise transfer
39 any property to, or to otherwise transact
business with the authority, shall
40 have the same authorization and power to
engage in these activities with
41 each subsidiary corporation of the
authority. Each such subsidiary cor-
42 poration shall have the power to
contract with the authority to do all
43 things necessary and convenient to carry
out the purposes of such sub-
8
1 sidiary corporation.
2 One or more such
subsidiary corporation may be formed for purposes
3 of establishing state tax credit
equity funds to assist in the development
4 of low-income and middle-income
housing and obtain financing through
5 participation in the program
established in section 42 of the federal in-
6 ternal revenue code.
7 Actions of the
authority or any subsidiary corporation relating to hous-
8 ing pursuant to this subsection (v)
shall be carried out in accordance with
9 any terms, conditions and limitations
relating to policy issues regarding
10 housing, as established by the secretary of
commerce and housing.
11 One or more such
subsidiary corporations may be formed for purposes
12 of acquiring or conveying on behalf of the
state and pursuant to this act
13 a project of statewide as well as local
importance, issuing bonds on behalf
14 of the state pursuant to this act to
finance a project of statewide as well
15 as local importance or otherwise financing
on behalf of the state pursuant
16 to this act a project of statewide as well
as local importance. The Kansas
17 statewide projects development corporation
is hereby created in accord-
18 ance with this section. Filing of
articles of incorporation of the Kansas
19 statewide projects development
corporation with the secretary of state
20 shall not be required.
21 The Kansas tobacco
settlement financing corporation is hereby created
22 in accordance with this section as a
subsidiary of the authority, a public
23 body politic and corporate and an
independent instrumentality of the state
24 exercising essential public functions,
effective upon the approval of articles
25 of incorporation by the authority. The
Kansas tobacco settlement financ-
26 ing corporation is created for the
purposes of (1) receiving from the state
27 all or a portion of the tobacco assets,
as defined in section 1 and amend-
28 ments thereto, (2) transferring,
selling, pledging, assigning or otherwise
29 conveying all or a portion of such
tobacco assets, (3) entering into con-
30 tracts, including trusts, with any
person or entity, including the state,
31 with respect to or regarding all or any
portion of the tobacco assets, (4)
32 issuing bonds authorized in subsection
(f) of K.S.A. 74-8905 and amend-
33 ments thereto and (5) issuing other
obligations secured by all or a portion
34 of tobacco assets. Filing of articles of
incorporation of the Kansas tobacco
35 settlement financing corporation with
the secretary of state shall not be
36 required; and
37
(w) established trusts in connection with any of the purposes
of this
38 act.
39 Sec.
4. K.S.A. 1999 Supp. 74-8905 is hereby amended to read as
40 follows: 74-8905. (a) The authority is
hereby authorized and empowered
41 to issue bonds, either for a specific
activity or on a pooled basis for a series
42 of related or unrelated activities or
projects duly authorized by a political
43 subdivision or group of political
subdivisions of the state in such amounts
9
1 as shall be determined by the
authority for the purpose of financing pro-
2 jects of statewide as well as local
importance as defined pursuant to K.S.A.
3 12-1744 and amendments thereto,
capital improvement facilities, edu-
4 cational facilities, health care
facilities and housing developments. Noth-
5 ing in this act shall be construed to
authorize the authority to issue bonds
6 or use the proceeds thereof to (1)
purchase, condemn, or otherwise ac-
7 quire a utility plant or distribution
system owned or operated by a regu-
8 lated public utility
or; (2) finance any capital improvement
facilities, ed-
9 ucational facilities, or health care
facilities which are authorized under
10 the laws of the state to be financed by the
issuance of general obligation
11 or utility revenue bonds of a political
subdivision, except that the acqui-
12 sition by the authority of general
obligation or utility revenue bonds issued
13 by political subdivisions with the proceeds
of pooled bonds shall not vi-
14 olate the provisions of the
foregoing.; or (3) purchase, acquire,
construct,
15 reconstruct, improve, equip, furnish,
repair, enlarge or remodel property
16 for any swine production facility on
agricultural land which is owned,
17 acquired, obtained or leased by a
corporation, limited liability company,
18 limited partnership, corporate
partnership or trust. Nothing in this sub-
19 section (a) shall prohibit the issuance of
bonds by the authority when any
20 statute specifically authorizes the
issuance of bonds by the authority or
21 approves any activity or project of a state
agency for purposes of author-
22 izing any such issuance of bonds in
accordance with this section and pro-
23 vides an exemption from the provisions of
this subsection (a).
24 (b) The authority
is hereby authorized and empowered to issue bonds
25 for activities and projects of state
agencies as requested by the secretary
26 of administration. No bonds may be issued
pursuant to this act for any
27 activity or project of a state agency
unless the activity or project either
28 has been approved by an appropriation or
other act of the legislature or
29 has been approved by the state finance
council acting on this matter which
30 is hereby characterized as a matter of
legislative delegation and subject
31 to the guidelines prescribed in subsection
(c) of K.S.A. 75-3711c and
32 amendments thereto. When requested to do so
by the secretary of ad-
33 ministration, the authority is further
authorized and empowered to issue
34 bonds for the purpose of refunding, whether
at maturity or in advance of
35 maturity, any outstanding bonded
indebtedness of any state agency. The
36 revenues of any state agency which are
pledged as security for any bonds
37 of such state agency which are refunded by
refunding bonds of the au-
38 thority may be pledged to the authority as
security for the refunding
39 bonds.
40 (c) The authority
is hereby authorized and empowered to issue bonds
41 for the purpose of financing industrial
enterprises, agricultural business
42 enterprises, educational facilities, health
care facilities and housing de-
43 velopments, or any combination of such
facilities, or any interest in facil-
10
1 ities, including without limitation
leasehold interests in and mortgages on
2 such facilities. No less than 30 days
prior to the issuance of any bonds
3 authorized under this act with
respect to any project or activity which is
4 to be undertaken for the direct
benefit of any person or entity which is
5 not a state agency or a political
subdivision, written notice of the intention
6 of the authority to provide financing
and issue bonds therefor shall be
7 given by the president of the
authority to the governing body of the city
8 in which the project or activity is
to be located, or, if the project or activity
9 is not proposed to be located within
a city, such notice shall be given to
10 the governing body of the county. No bonds
for the financing of the
11 project or activity shall be issued by the
authority for a one-year period
12 if, within 15 days after the giving of such
notice, the governing body of
13 the political subdivision in which the
project or activity is proposed to be
14 located shall have duly enacted an
ordinance or resolution stating express
15 disapproval of the project or activity and
shall have notified the president
16 of the authority of such disapproval.
17 (d) The authority
is hereby authorized and empowered to issue bonds
18 for the purpose of establishing and funding
one or more series of venture
19 capital funds in such principal amounts, at
such interest rates, in such
20 maturities, with such security, and upon
such other terms and in such
21 manner as is approved by resolution of the
authority. The proceeds of
22 such bonds not placed in a venture capital
fund or used to pay or reim-
23 burse organizational, offering and
administrative expenses and fees nec-
24 essary to the issuance and sale of such
bonds shall be invested and rein-
25 vested in such securities and other
instruments as shall be provided in
26 the resolution under which such bonds are
issued. Moneys in a venture
27 capital fund shall be used to make venture
capital investments in new,
28 expanding or developing businesses,
including, but not limited to, equity
29 and debt securities, warrants, options and
other rights to acquire such
30 securities, subject to the provisions of
the resolution of the authority. The
31 authority shall establish an investment
policy with respect to the invest-
32 ment of the funds in a venture capital fund
not inconsistent with the
33 purposes of this act. The authority shall
enter into an agreement with a
34 management company experienced in venture
capital investments to
35 manage and administer each venture capital
fund upon terms not incon-
36 sistent with the purposes of this act and
such investment policy. The
37 authority may establish an advisory board
to provide advice and consulting
38 assistance to the authority and the
management company with respect to
39 the management and administration of each
venture capital fund and the
40 establishment of its investment policy. All
fees and expenses incurred in
41 the management and administration of a
venture capital fund not paid or
42 reimbursed out of the proceeds of the bonds
issued by the authority shall
43 be paid or reimbursed out of such venture
capital fund.
11
1 (e) The
authority is hereby authorized and empowered to issue bonds
2 in one or more series for the purpose
of financing a project of statewide
3 as well as local importance in
connection with a redevelopment plan that
4 is approved by the authority in
accordance with K.S.A. 1999 Supp. 74-
5 8921 and 74-8922, and amendments
thereto.
6
(f) The authority
[Kansas tobacco settlement financing corpora-
7 tion] is hereby
authorized and empowered to issue bonds for the purpose
8 of acquiring tobacco
assets[.] or financing capital or
operating expendi-
9 tures for governmental
programs or facilities as required from time
to
10 time by the secretary of
administration, such bonds to be payable
solely
11 from tobacco asset payments,
as defined in section 1 and amendments
12 thereto, or other property
legally available to be pledged to the payment
13 of the bonds and pledged in
the trust indenture under which the bonds
14 are
issued.
15 (f)
(g) The authority is hereby authorized and empowered to
use the
16 proceeds of any bond issues herein
authorized, together with any other
17 available funds, for venture capital
investments or for purchasing, leasing,
18 constructing, restoring, renovating,
altering or repairing facilities as
19 herein authorized, for making loans,
purchasing mortgages or security
20 interests in loan participations and paying
all incidental expenses there-
21 with, paying expenses of authorizing and
issuing the bonds, paying inter-
22 est on the bonds until revenues thereof are
available in sufficient amounts,
23 purchasing bond insurance or other credit
enhancements on the bonds,
24 and funding such reserves as the authority
deems necessary and desirable.
25 All moneys received by the authority, other
than moneys received by
26 virtue of an appropriation, are hereby
specifically declared to be cash
27 funds, restricted in their use and to be
used solely as provided herein.
28 No moneys of the authority other than
moneys received by appropriation
29 shall be deposited with the state
treasurer.
30 (g)
(h) Any time the authority is required to publish a
notification
31 pursuant to the tax equity and fiscal
responsibility act of 1982, the au-
32 thority shall further publish such
notification in the Kansas register.
33 (h)
(i) Any time the authority issues bonds pursuant to
this section,
34 the authority shall publish notification of
such issuance of bonds 14 days
35 prior to any bond hearing in the official
county newspaper where such
36 bonds will be used and in the Kansas
register.
37 Sec.
5. K.S.A. 74-8909 is hereby amended to read as follows:
74-
38 8909. Any pledge of revenues, moneys, funds
or other property made by
39 the authority or such subsidiary
corporation shall be valid and binding
40 from the time when such pledge is made and
the revenues, moneys, funds
41 or other property so pledged and thereafter
received by the authority or
42 such subsidiary corporation shall
immediately be subject to the lien of
43 such pledge without such physical delivery
thereof or further act on the
12
1 part of the authority or such
subsidiary corporation, and the lien of any
2 such pledge shall be valid and
binding as against all parties having claims
3 of any kind in tort, contract or
otherwise against the authority or such
4 subsidiary corporation,
irrespective of whether such parties have notice
5 thereof. Neither the authorizing
resolution nor any other instrument by
6 which a pledge is created need be
filed or recorded except in the records
7 of the authority or such
subsidiary corporation.
8 Sec. 6. K.S.A. 74-8909 and
K.S.A. 1999 Supp. 38-2101, 74-8904, 74-
9 8905 and 74-8905a are hereby
repealed.
10 Sec. 7. This act shall
take effect and be in force from and after its
11 publication in the Kansas register.