CHAPTER 78 HOUSE BILL No. 2169 (Amended by Chapter 167) An Act relating to state moneys; concerning the investment thereof; amending K.S.A. 75-4221 and K.S.A. 2000 Supp. 75-4237 and repealing the existing sections. Be it enacted by the Legislature of the State of Kansas:

      Section  1. K.S.A. 75-4221 is hereby amended to read as follows: 75-
4221. (a) In all cases wherein it shall appear to the board that the secu-
rities pledged by any depository bank have become inadequate, it shall
be the duty of Any state agency which is authorized to maintain a bank
account, shall be responsible for determining that the securities pledged,
assigned, deposited or in which a security interest is granted by the de-
pository bank are adequate to secure the balance in the account pursuant
to K.S.A. 75-4218, and amendments thereto. The agency shall immediately
notify the board if the securities pledged, assigned, deposited or in which
a security interested is granted by the depository bank have become in-
adequate. The board to shall immediately notify such depository bank
and demand that additional security be pledged to make good such in-
adequacy; and in default of such additional security being promptly fur-
nished, the board shall instruct the treasurer to close the account.

      (b) In cases where a depository bank fails to meet the requirements
established by the board pursuant to K.S.A. 75-4232, and amendments
thereto, the board shall instruct the treasurer to advise the depository
bank it must select one of the following options:

      (1) Close the account for the full amount, including accrued interest
and without penalty if the deposit exceeds seven days, or

      (2) convert the account to a repurchase agreement under terms ac-
ceptable to the board.

      (c) In the event of the insolvency or dissolution from any cause of a
depository bank having a state bank account of any type, the state shall
be entitled to file a claim for the full amount of such account and shall
retain or collect dividends or interest on securities pledged by such de-
pository bank until the amount of the dividends or interest added to the
amount realized from sale of any securities so pledged to the state equals
the amount of the account and any interest due thereon.

      The state shall be fully responsible to any depository bank for the safe
return of any securities deposited in the state treasury in accordance with
this act.

      Sec.  2. K.S.A. 2000 Supp. 75-4237 is hereby amended to read as
follows: 75-4237. (a) The director of investments shall accept requests
from banks interested in obtaining investment accounts of state moneys.
Such requests may be submitted any business day and shall specify the
dollar amount, maturity or maturity range and interest rate. Except as
provided in subsection (c), if the interest rate bid by the bank is at or
greater than the market rate determined by the director of investments
in accordance with subsection (b), and maturity. The director of invest-
ments is authorized to award the investment account to the bidding re-
questing bank at the market rate established by subsection (b). Awards of
investment accounts pursuant to this section shall be subject to invest-
ment policies of the pooled money investment board. When multiple bids
requests are received and are in excess of the amount available for in-
vestment that day for any maturity, awards shall be made available in
ascending order from smallest to largest dollar amount bid requested,
subject to investment policies of the board.

      (b) The market rate shall be determined each business day by the
director of investments, in accordance with any procedures established
by the pooled money investment board. Subject to any policies of the
board, the market rate shall reflect the highest rate at which state moneys
can be invested on the open market in investments authorized by sub-
section (a) of K.S.A. 75-4209, and amendments thereto, for equivalent
maturities.

      (c)  (1) Notwithstanding the provisions of this section, linked deposits
made pursuant to the provisions of K.S.A. 2000 Supp. 2-3703 through 2-
3707, and amendments thereto, shall be at an interest rate which is 2%
less than the market rate determined under this section and which shall
be recalculated on the first business day of each calendar year using the
market rate then in effect.

      (2) Notwithstanding the provisions of this section, agricultural pro-
duction loan deposits made pursuant to the provisions of K.S.A. 2000
Supp. 75-4268 through 75-4274, and amendments thereto, shall be at 2%
less than the market rate provided by this section and which shall be
recalculated on the first business day of each calendar year using the
market rate then in effect.

 Sec.  3. K.S.A. 75-4221 and K.S.A. 2000 Supp. 75-4237 are hereby
repealed.
 Sec.  4. This act shall take effect and be in force from and after its
publication in the Kansas register.

Approved April 3, 2001.
 Published in the Kansas Register April 12, 2001.
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