Session of 2025
HOUSE BILL No. 2281
By Committee on Financial Institutions and Pensions
Requested by Representative Hoheisel on behalf of the 2024 Special Committee on Centralized Pooled Collateral and PMIB Modernization
2-5
1AN ACT concerning public moneys; establishing the Kanbucks program;
2authorizing the state treasurer to invest in linked deposits with eligible
3financial institutions to provide linked deposit loans to eligible
4borrowers; abolishing the Kansas agricultural production loan deposit
5program, the Kansas housing loan deposit program, the extraordinary
6utility costs loan deposit program, the Kansas economic recovery loan
7deposit program and the city utility low-interest loan program;
8providing for the continuation of existing linked deposit loans;
9amending K.S.A. 2024 Supp. 75-4209 and 75-4237 and repealing the
10existing sections; also repealing K.S.A. 75-4268, 75-4269, 75-4270,
1175-4271, 75-4272, 75-4273, 75-4274, 75-4275, 75-4276, 75-4277, 75-
124278, 75-4279, 75-4280, 75-4281 and 75-4282 and K.S.A. 2024 Supp.
1375-4283, 75-4284, 75-4285, 75-4286, 75-4287, 75-4288, 75-4289, 75-
144290, 75-4291, 75-4292, 75-4293, 75-4294, 75-4295, 75-4296, 75-
154297, 75-4298, 75-4299, 75-42,100, 75-42,101 and 75-42,102.
16
17Be it enacted by the Legislature of the State of Kansas:
18New Section 1. (a) The provisions of sections 1 through 8, and
19amendments thereto, shall be known and may be cited as the Kanbucks
20program.
21(b) The Kanbucks program shall be for the purpose of providing
22incentives for the making of loans to eligible borrowers for:
23(1) Agricultural production;
24(2) housing and adult care home construction or development;
25(3) business purposes; or
26(4) extraordinary natural gas costs incurred during the extreme winter
27weather event of February 2021.
28New Sec. 2. For the purposes of the Kanbucks program:
29(a) "Adult care home" means the same as defined in K.S.A. 39-923,
30and amendments thereto.
31(b) "Director of investments" means the person appointed as the
32director of investments pursuant to K.S.A. 75-4222, and amendments
33thereto.
34(c) "Eligible borrower" means any:
1(1) Individual, limited liability agricultural company, limited
2agricultural partnership or family farm corporation as defined in K.S.A.
317-5903, and amendments thereto, involved in farming;
4(2) person, firm or corporation building new houses or not-for-profit
5adult care homes or rehabilitating existing houses or not-for-profit adult
6care homes;
7(3) individual or entity operating a business primarily for commercial
8or agricultural purposes with not more than 200 full-time employees
9maintaining offices or operating facilities and transacting business in the
10state of Kansas and is not an individual obtaining a loan primarily for
11personal, family or household purposes; or
12(4) wholesale natural gas customer located in the state of Kansas that
13incurs extraordinary natural gas costs due to the extreme winter weather
14event of February 2021 and is not an individual obtaining a loan for
15personal, family or household purposes.
16(c) "Eligible lending institution" means:
17(1) A bank as defined in K.S.A. 75-4201, and amendments thereto,
18that agrees to participate in the program and is eligible to be a depository
19of state funds;
20(2) a credit union as defined in K.S.A. 17-2231, and amendments
21thereto, that agrees to participate in the program and that provides
22securities acceptable to the pooled money investment board pursuant to
23article 42 of chapter 75 of the Kansas Statutes Annotated, and amendments
24thereto; or
25(3) an institution of the farm credit system organized under the
26federal farm credit act of 1971 (12 U.S.C. § 2001), as in effect on July 1,
272025, that agrees to participate in the program and provides securities
28acceptable to the pooled money investment board pursuant to article 42 of
29chapter 75 of the Kansas Statutes Annotated, and amendments thereto.
30(d) "House" means a single-family or multi-family dwelling that
31initially sells or is appraised at or below the average area purchase price
32safe harbor for the state of Kansas as established by the state treasurer
33through rules and regulations based on the requirements of section 143(e)
34of the federal internal revenue code for homes that are eligible for
35mortgage revenue bonds.
36(e) "Linked deposit loan" or "loan" means a loan made by an eligible
37lending institution to an eligible borrower from the eligible lending
38institution's loan deposit as part of the program.
39(f) "Loan deposit" means an investment account placed by the
40director of investments under the provisions of article 42 of chapter 75 of
41the Kansas Statutes Annotated, and amendments thereto, with an eligible
42lending institution for the purpose of carrying out the intent of the
43program.
1(g) "Loan deposit loan package" means the forms provided by the
2state treasurer for the purpose of applying for a loan deposit.
3(h) "Program" means the Kanbucks program.
4New Sec. 3. (a) The state treasurer is hereby authorized to invest in
5linked deposits. Except as provided in subsection (c), the total amount so
6deposited at any one time shall not exceed 5% of the pooled money
7investment portfolio. Such deposits shall be used for linked deposits to
8eligible borrowers. Linked deposit loans may be made to eligible
9borrowers from such aggregate deposits. The state treasurer may
10disseminate information and provide economic recovery loan deposit loan
11packages to the lending institutions eligible for participation in the
12program. A loan deposit loan package shall be completed by the eligible
13borrower before being forwarded to the eligible lending institution for
14consideration.
15(b) (1) No single linked deposit loan to an eligible borrower for
16agricultural production or business purposes shall exceed $2,500,000.
17(2) No loan for a house shall be amortized for a period of more than
1815 years.
19(c) The state treasurer may invest additional amounts in linked
20deposits beyond the limit established in subsection (a) if the state treasurer
21receives approval from the pooled money investment board for each such
22additional linked deposit.
23New Sec. 4. (a) An eligible lending institution that agrees to receive a
24loan deposit shall accept and review applications for loans from eligible
25borrowers. The lending institution shall apply all usual lending standards
26to determine the credit worthiness of an eligible borrower.
27(b) An eligible borrower shall certify on the loan application the
28purpose for which such loan will be used.
29(c) The eligible lending institution may approve or reject a loan
30application based on the lending institution's evaluation of the eligible
31borrower, the amount of the loan and other appropriate considerations.
32(d) The eligible lending institution shall forward to the state treasurer,
33an approved loan deposit loan package in the manner prescribed by the
34state treasurer. The package shall include information regarding the
35amount of the loan requested by each eligible borrower and such other
36information regarding each eligible borrower the state treasurer requires,
37including a certification by the applicant that such applicant is an eligible
38borrower.
39New Sec. 5. (a) The state treasurer may accept or reject a loan deposit
40loan package based on the state treasurer's evaluation of whether the loan
41to the eligible borrower meets the purposes of this program. If sufficient
42funds are not available for a loan deposit, then the applications may be
43considered in the order received when funds are once again available
1subject to a review by the eligible lending institution.
2(b) Upon acceptance, the state treasurer shall certify to the director of
3investments the amount required for such loan deposit loan package and
4the director of investments shall place a loan deposit in the amount
5certified by the state treasurer with the eligible lending institution at an
6interest rate that is 2% below the market rate provided in K.S.A. 75-4237,
7and amendments thereto, and that shall be recalculated on the first
8business day of January and July of each year using the market rate then in
9effect. The minimum interest rate shall be 0.25%, if the market rate is
10below 2.25%. When necessary, the state treasurer may request the director
11of investments to place such loan deposit with the eligible lending
12institution prior to acceptance of a loan deposit loan package.
13(c) The eligible lending institution shall enter into a loan deposit
14agreement with the state treasurer. Such agreement shall include
15requirements necessary to implement the purposes of the program. Such
16requirements shall include an agreement by the eligible lending institution
17to lend an amount equal to the loan deposit to eligible borrowers at an
18interest rate that is not more than 3% greater than the interest rate on loan
19deposits as provided in subsection (b). Such rate shall be recalculated on
20the first business day of January of each year using the market rate then in
21effect. The agreement shall include provisions for the loan deposit to be
22placed for a period of time not to exceed 10 years that is considered
23appropriate in coordination with the underlying loan. The agreement shall
24include provisions for the reduction of the loan deposit in an amount equal
25to any payment of loan principal by the eligible borrower.
26New Sec. 6. Upon the placement of an economic recovery loan
27deposit with an eligible lending institution, such eligible lending institution
28shall fund the loan to each approved eligible borrower listed in the
29economic recovery deposit loan package in accordance with the economic
30recovery loan deposit agreement between the eligible lending institution
31and the state treasurer. The loan shall be at a rate as provided in section
325(c), and amendments thereto. The eligible lending institution shall submit
33in the manner prescribed by the state treasurer a certification of
34compliance with this section.
35New Sec. 7. The state and the state treasurer shall not be liable to any
36eligible lending institution in any manner for payment of the principal or
37interest on a loan to an eligible borrower. Any delay in payments or default
38on the part of an eligible borrower does not in any manner affect the loan
39deposit agreement between the eligible lending institution and the state
40treasurer.
41New Sec. 8. (a) The state treasurer shall adopt rules and regulations to
42administer and carry out the provisions of the program.
43(b) The state treasurer shall submit an annual report outlining the
1status of the program to the governor and the legislature.
2New Sec. 9. Any outstanding linked deposit loans in existence on
3July 1, 2025, under the provisions of K.S.A. 75-4268 through 75-4274 or
475-4290 through 75-4296, prior to their repeal, shall be continued under
5the terms of the linked deposit loan program in existence prior to the
6repeal of such statutes.
7Sec. 10. K.S.A. 2024 Supp. 75-4209 is hereby amended to read as
8follows: 75-4209. (a) The director of investments may invest and reinvest
9state moneys eligible for investment which are not invested in accordance
10with K.S.A. 75-4237, and amendments thereto, in the following
11investments:
12(1) Direct obligations of, or obligations that are insured as to principal
13and interest by, the United States of America or any agency thereof and
14obligations and securities of the United States sponsored enterprises which
15under federal law may be accepted as security for public funds, on and
16after the effective date of this act moneys available for investment under
17this subsection shall not be invested in mortgage-backed securities of such
18enterprises and of the government national mortgage association, except
19that any such mortgage-backed securities held prior to the effective date of
20this act may be held to maturity;
21(2) repurchase agreements with a bank or a primary government
22securities dealer which reports to the market reports division of the federal
23reserve bank of New York for direct obligations of, or obligations that are
24insured as to principal and interest by, the United States government or any
25agency thereof and obligations and securities of United States government
26sponsored enterprises which under federal law may be accepted as security
27for public funds;
28(3) commercial paper that does not exceed 270 days to maturity and
29which has received one of the two highest commercial paper credit ratings
30by a nationally recognized investment rating firm; and
31(4) corporate bonds which have received one of the two highest
32ratings by a nationally recognized investment rating firm.
33(b) When moneys are available for deposit or investments, the
34director of investments may invest in SKILL act projects and bonds
35pursuant to K.S.A. 74-8920, and amendments thereto, and in state agency
36bonds and bond projects.
37(c) When moneys are available for deposits or investments, the
38director of investments may invest in preferred stock of Kansas venture
39capital, inc., under terms and conditions prescribed by K.S.A. 74-8203,
40and amendments thereto, but such investments shall not in the aggregate
41exceed a total amount of $10,000,000.
42(d) When moneys are available for deposits or investments, the
43director of investments may invest in loans pursuant to legislative
1mandates, except that not more than the greater of 10% or $140,000,000 of
2the state moneys shall be invested. The provisions of this subsection shall
3not apply to the provisions of subsection (m).
4(e) Interest on investment accounts in banks is to be paid at maturity,
5but not less than annually.
6(f) Investments made by the director of investments under the
7provisions of this section shall be made with judgment and care, under
8circumstances then prevailing, which persons of prudence, discretion and
9intelligence exercise in the management of their own affairs, not for
10speculation, but for investment, considering the probable safety of their
11capital as well as the probable income to be derived.
12(g) Investments under subsection (a) or (b) or under K.S.A. 75-4237,
13and amendments thereto, shall be for a period not to exceed four years,
14except that linked deposits authorized under the provisions of K.S.A. 2-
153703 through 2-3707, and amendments thereto, shall not exceed a period
16of 10 years; agricultural production loan deposits authorized under the
17provisions of K.S.A. 75-4268 through 75-4274, and amendments thereto,
18shall not exceed a period of eight years and housing loan deposits
19authorized under K.S.A. 75-4276 through 75-4282, and amendments
20thereto, shall not exceed a period of five years or 20 years, as applicable
21pursuant to K.S.A. 75-4279, and amendments thereto.
22(h) Investments in securities under subsection (a)(1) shall be limited
23to securities which do not have any more interest rate risk than do direct
24United States government obligations of similar maturities. For purposes
25of this subsection, "interest rate risk" means market value changes due to
26changes in current interest rates.
27(i) The director of investments shall not invest state moneys eligible
28for investment under subsection (a), in the municipal investment pool
29fund, created under K.S.A. 12-1677a, and amendments thereto.
30(j) The director of investments shall not invest moneys in the pooled
31money investment portfolio in derivatives. As used in this subsection,
32"derivatives" means a financial contract whose value depends on the value
33of an underlying asset or index of asset values.
34(k) Moneys and investments in the pooled money investment
35portfolio shall be invested and reinvested by the director of investments in
36accordance with investment policies developed, approved, published and
37updated on an annual basis by the board. Such investment policies shall
38include at a minimum guidelines which identify credit standards, eligible
39instruments, allowable maturity ranges, methods for valuing the portfolio,
40calculating earnings and yields and limits on portfolio concentration for
41each type of investment. Any changes in such investment policies shall be
42approved by the pooled money investment board. Such investment policies
43may specify the contents of reports, methods of crediting funds and
1accounts and other operating procedures.
2(l) The board shall adopt rules and regulations to establish an overall
3percentage limitation on the investment of moneys in investments
4authorized under subsection (a)(3), and within such authorized investment,
5the board shall establish a percentage limitation on the investment in any
6single business entity.
7(m) (1) During the fiscal year ending June 30, 2017, the director of
8the budget shall estimate on or before June 27, 2017, the amount of the
9unencumbered ending balance in the state general fund for fiscal year
102017. If the amount of such unencumbered ending balance in the state
11general fund is less than $50,000,000, the director of the budget shall
12certify the difference between $50,000,000, and the amount of such
13unencumbered ending balance to the pooled money investment board.
14Upon the liquidation of all investments and reinvestments of state moneys
15pursuant to K.S.A. 75-2263(j), and amendments thereto, and upon receipt
16of such certification by the director of the budget, during the fiscal year
17ending June 30, 2017, the pooled money investment board shall authorize
18the director of accounts and reports to transfer an amount equal to the
19amount certified by the director of the budget pursuant to this subsection
20from the pooled money investment portfolio to the state general fund.
21Upon receipt of such authorization, the director of accounts and reports
22shall make such transfer. The chairperson of the pooled money investment
23board shall transmit a copy of such authorization to the director of
24legislative research and the director of the budget.
25(2) (A) On or before June 30, 2019, the director of accounts and
26reports shall transfer an amount equal to 1/6 of the amount transferred
27pursuant to subsection (m)(1) from the state general fund to the pooled
28money investment portfolio.
29(B) On or before June 30, 2020, the director of accounts and reports
30shall transfer an amount equal to 1/2 of the amount transferred pursuant to
31subsection (m)(1), reduced by the amount transferred pursuant to
32subsection (m)(2)(A) from the state general fund to the pooled money
33investment portfolio.
34(C) On or before June 30, 2021, and June 30, 2022, during each such
35fiscal year, the director of accounts and reports shall transfer an amount
36equal to 1/2 of the amount transferred pursuant to subsection (m)(1),
37reduced by the amount transferred pursuant to subsection (m)(2)(A) and
38(m)(2)(B) from the state general fund to the pooled money investment
39portfolio.
40(3) During the fiscal year ending June 30, 2018, after any transfer
41made pursuant to subsection (m)(1), the pooled money investment board
42shall authorize the director of accounts and reports to transfer the
43remaining amount of all investments and reinvestments of state moneys
1liquidated pursuant to K.S.A. 75-2263(j), and amendments thereto, from
2the pooled money investment portfolio to the state general fund. Upon
3receipt of such authorization, the director of accounts and reports shall
4make such transfer. The chairperson of the pooled money investment
5board shall transmit a copy of such authorization to the director of
6legislative research and the director of the budget.
7(4) (A) On or before June 30, 2019, the director of accounts and
8reports shall transfer an amount equal to 1/6 of the amount transferred
9pursuant to subsection (m)(3) from the state general fund to the pooled
10money investment portfolio.
11(B) On or before June 30, 2020, the director of accounts and reports
12shall transfer an amount equal to 1/2 of the amount transferred pursuant to
13subsection (m)(3), reduced by the amount transferred pursuant to
14subsection (m)(4)(A) from the state general fund to the pooled money
15investment portfolio.
16(C) On or before June 30, 2021, and June 30, 2022, during each such
17fiscal year, the director of accounts and reports shall transfer an amount
18equal to 1/2 of the amount transferred pursuant to subsection (m)(3),
19reduced by the amount transferred pursuant to subsection (m)(4)(A) and
20(m)(4)(B) from the state general fund to the pooled money investment
21portfolio.
22Sec. 11. K.S.A. 2024 Supp. 75-4237 is hereby amended to read as
23follows: 75-4237.(a) The director of investments shall accept requests
24from banks interested in obtaining investment accounts of state moneys.
25Such requests may be submitted any business day and shall specify the
26dollar amount and maturity. The director of investments is authorized to
27award the investment account to the requesting bank at the market rate
28established by subsection (b). Awards of investment accounts pursuant to
29this section shall be subject to investment policies of the pooled money
30investment board. When multiple requests are received and are in excess
31of the amount available for investment that day for any maturity, awards
32shall be made available in ascending order from smallest to largest dollar
33amount requested, subject to investment policies of the board.
34(b) The market rate shall be determined each business day by the
35director of investments, in accordance with any procedures established by
36the pooled money investment board. Subject to any policies of the board,
37the market rate shall reflect the highest rate at which state moneys can be
38invested on the open market in investments authorized by K.S.A. 75-
394209(a), and amendments thereto, for equivalent maturities.
40(c) (1) Notwithstanding the provisions of this section, linked deposits
41made pursuant to the provisions of K.S.A. 2-3703 through 2-3707, and
42amendments thereto, shall be at an interest rate that is 2% less than the
43market rate determined under this section and that shall be recalculated on
1the first business day of each calendar year using the market rate then in
2effect.
3(2) Notwithstanding the provisions of this section, agricultural
4production loan deposits linked deposit loans made pursuant to the
5provisions of K.S.A. 75-4268 through 75-4274 sections 1 through 8, and
6amendments thereto, shall be at an interest rate that is 2% less than the
7market rate provided by this section and that shall be recalculated on the
8first business day of each calendar year using the market rate then in
9effect.
10(3) Notwithstanding the provisions of this section, loan deposits made
11pursuant to the city utility low-interest loan program shall be at an interest
12rate that is 2% less than the market rate provided by this section and that
13shall be recalculated on the first business day of each calendar year using
14the market rate then in effect.
15(4) Notwithstanding the provisions of this section, economic recovery
16loan deposits made pursuant to the Kansas economic recovery loan deposit
17program shall be at an interest rate that is 2% less than the market rate
18provided by this section and that shall be recalculated on the first business
19day of each calendar year using the market rate then in effect.
20(5) Notwithstanding the provisions of this section, extraordinary
21utility costs loan deposits made pursuant to the Kansas extraordinary
22utility costs loan deposit program shall be at an interest rate that is 2% less
23than the market rate provided by this section and that shall be recalculated
24on the first business day of each calendar year using the market rate then
25in effect.
26(d) (1) The director of investments may place deposits through a
27selected bank, savings and loan association or savings bank that is part of a
28reciprocal deposit program in which the bank, savings and loan association
29or savings bank:
30(A) Receives reciprocal deposits from other participating institutions
31located in the United States in an amount equal to the amount of funds
32deposited by the municipal corporation or quasi-municipal corporation;
33and
34(B) for which the total cumulative amount of each deposit does not
35exceed the maximum deposit insurance amount for one depositor at one
36financial institution as determined by the federal deposit insurance
37corporation.
38(2) Such deposits shall not be treated as securities and need not be
39secured as provided in this or any other act, except that such deposits shall
40be secured as provided in K.S.A. 75-4218, and amendments thereto, when
41they are held by the selected financial institution prior to placement with
42reciprocal institutions or upon maturity.
43(e) The pooled money investment board shall establish procedures for
1administering reciprocal deposit programs in its investment policies, as
2authorized by K.S.A. 75-4232, and amendments thereto.
3Sec. 12. K.S.A. 75-4268, 75-4269, 75-4270, 75-4271, 75-4272, 75-
44273, 75-4274, 75-4275, 75-4276, 75-4277, 75-4278, 75-4279, 75-4280,
575-4281 and 75-4282 and K.S.A. 2024 Supp. 75-4209, 75-4237, 75-4283,
675-4284, 75-4285, 75-4286, 75-4287, 75-4288, 75-4289, 75-4290, 75-
74291, 75-4292, 75-4293, 75-4294, 75-4295, 75-4296, 75-4297, 75-4298,
875-4299, 75-42,100, 75-42,101 and 75-42,102 are hereby repealed.
9Sec. 13. This act shall take effect and be in force from and after its
10publication in the statute book.