10-131.   Investment of proceeds of bonds or temporary notes and certainfunds authorized; disposition of interest received therefrom.(a) The governing body of any municipality, as defined in K.S.A. 10-101,andamendments thereto, which has issued or may issue bonds or temporary notesfor any purpose, is hereby authorized and empowered to invest any portionof the proceeds of such bonds, notes or funds held pursuant to theresolution or ordinance authorizing the issuance of such bonds or notes,which is not currently needed, in: (1) Investments authorized byK.S.A.12-1675, and amendments thereto, in the manner prescribed therein;(2) themunicipal investment pool established pursuant to K.S.A. 12-1677a,and amendments thereto; (3)direct obligations of the United States government or any agency thereof; (4)the municipality's temporary notes issued pursuant to K.S.A. 10-123,and amendments thereto; (5) interest-bearing timedeposits in commercial banks located in the county orcounties in which the municipality is located;(6) subject to the limitations provided insubsection (b), obligations of the federal national mortgage association,federal home loan banks or the federal home loan mortgage corporation; (7)repurchaseagreements for securities described in (3) or (6); (8)investmentagreements with or other obligations of a financial institution theobligations of which at the time of investment are rated in either of thethree highest rating categories by Moody's investors service or Standardand Poor's corporation; (9) investments in shares or units of amoneymarket fund or trust the portfolio of which is comprised entirely ofsecurities described in (3) or (6); (10) receipts evidencingownership interests in securities or portions thereof described in (3) or (6);(11) municipal bonds or other obligationsissued by anymunicipality of the state of Kansas as defined in K.S.A. 10-1101, andamendments thereto, which aregeneral obligations of the municipality issuing the same; or (12)bonds ofany municipality of the state of Kansas as defined in K.S.A. 10-1101, andamendments thereto, whichhave been refunded in advance of their maturity and are fully secured as topayment of principal and interest thereon by deposit in trust, under escrowagreement with a bank, of securities described in (3) or (6). The interestreceived onany such investment shall upon receipt thereof be set aside and used forthe purpose of paying interest on the bonds or notes issued or used for payingthe cost of the project for which the bonds or notes were issued.

      (b)   No moneys authorized to be invested pursuant to subsection (a) shallbeinvested in a derivative.

      For the purposes of this section, "derivative" means any investmentinstrument whose market price is derived from the fluctuating value of anunderlying asset, index, currency, futures contract, including futures, optionsand collateralized mortgage obligations.

      History:   L. 1947, ch. 106, § 1; L. 1949, ch. 113, § 1; L.1953, ch. 56, § 1; L. 1971, ch. 38, § 1; L. 1971, ch. 39, § 1; L.1976, ch. 62, § 1; L. 1977, ch. 54, § 2; L. 1980, ch. 52, § 1;L. 1987, ch. 60, § 2; L. 1988, ch. 66, § 1; L. 1989, ch. 48, § 64;L. 1994, ch. 103, § 1;L. 1996, ch. 84, § 1; July 1.