17-5101.   Definitions.The following words when used in articles 51 to 58, inclusive, of chapter17 of the Kansas Statutes Annotated shall, for the purpose of thisact, have the meanings respectively ascribed to them in this section:

      (a)   "Association" shall mean a savings and loan association subjectto the provisions of this act.

      (b)   "Board" shall mean the savings and loan board.

      (c)   "Combination home and business structure" shall mean a buildingor buildings, including residences for not more than four families,which is used in part for business purposes. The residential use of sucha building must be substantial and permanent, not merely transitory. Thebusiness use may predominate.

      (d)   "Commissioner" shall mean the savings and loan commissioner.

      (e)   "Direct reduction loan" shall mean a loan repayable inconsecutive installments, equal or unequal, beginning not later than sixmonths after the date of the advance of the loan, sufficient to retirethe debt, interest and principal, within 30 years. Any such loan isan amortized loan.

      (f)   "Sinking fund loan or share retirement loan" shall mean a loanto be repaid by maturing shares having an ultimate value equal to theloan. The borrower shall pay dues on the shares periodically and shallbe credited with dividends from the earnings of the association asprovided by the bylaws. The dues paid on the shares plus the dividendscredited shall equal the loan at maturity.

      (g)   "Gross income" shall mean the sum for an accounting period ofthe following: (1) Operating income; (2) real estate income; (3) allprofits actually received during such accounting period from the sale ofsecurities, real estate or other property, and (4) other nonrecurringincome.

      (h)   "Home" shall mean a dwelling or dwellings for not more than fourfamilies. A property does not cease to be a home because of theincidental use of it for minor business purposes so long as theprincipal use of the property is for residence purposes. A home on afarm is a home.

      (i)   "Home loan" shall mean a real estate loan when the security ishome property.

      (j)   "Home property" shall mean real estate on which there islocated, or will be located pursuant to a home loan, a home or acombination home and business structure located in an urban area.

      (k)   "Impairment of capital" shall mean that the net worth accounts inthe aggregate of the association do not exceed 2 1/2% of withdrawablecapital. A determination of impairment of capital may be made bythe board of directors or the commissioner.

      (l)   "Improved real estate" shall mean real estate (other than landin a state of nature or wild land) on which there is a structure or aninclosure, which is cultivated, reclaimed, used for the purpose ofagriculture in any form, or otherwise occupied, made better, more usefulor of greater value by care so as to produce an enjoyment thereof.

      (m)   "Insured association" shall mean an association insured byfederal savings and loan insurance corporation created under the titleIV of the national housing act, or acts amendatory or supplementalthereto.

      (n)   "Member" shall mean a borrower, obligor, contract purchaserindebted to the association or an individual, and any other legal entitywho is the owner of shares of an association.

      (o)   "Net earnings" shall mean gross income for an accounting periodless than the aggregate of the following: (1) Operating expenses; (2)real estate expenses; (3) all losses actually sustained during suchaccounting period from the sale of securities, real estate or otherproperty, or such portion of such losses as shall not have been chargedto reserves, pursuant to the provisions of this act; (4) all interestpaid, or due but unpaid, on borrowed money; (5) other nonrecurringcharges; and (6) interest or dividends on withdrawable capital.

      (p)   "Operating expenses" shall mean all expenses actually paid, ordue but unpaid, by an association during an accounting period, excludingthe following: (1) Real estate expenses; (2) interest on borrowed money;(3) other nonrecurring charges. That portion of prepaid expenses notapportionable to the period may be excluded from operating expenses, inwhich event operating expenses for future periods shall include thatportion of such prepaid expenses apportionable thereto.

      (q)   "Operating income" shall mean all income actually received by anassociation during an accounting period, excluding the following: (1)Real estate income; and (2) other nonrecurring income.

      (r)   "Other real estate loan" shall mean a real estate loan when thesecurity is improved real estate other than home property.

      (s)   "Participation value" shall mean the aggregate of payments by amember on shares plus dividends credited to the shares, less redemption andrepurchase payments.

      (t)   "Real estate expenses" shall mean all expenses actually paid ordue but unpaid, in connection with the ownership, maintenance and saleof real estate (other than office building or buildings) by anassociation during an accounting period excluding capital expendituresand losses on the sale of real estate.

      (u)   "Real estate income" shall mean all income actually received byan association during an accounting period from real estate owned (otherthan office building or buildings) excluding profit from sales of realestate.

      (v)   "Real estate loan" shall mean a loan on the security of realestate evidenced by any form of instrument whereby a lien is createdupon such real estate for the benefit of another person as security forthe payment of an obligation to such person or whereby title to realestate is conveyed to another person as trustee for a third person, assecurity for the payment of an obligation to such third person.

      (w)   "Capital" shall mean the aggregate of payments on shares bymembers, plus dividends credited to such shares, less redemption andrepurchase payments.

      (x)   "Net worth accounts" shall mean the sum of all reserve accounts, paidin surplus, retained earnings, guarantee stock, permanent stock and reservestock, of an association, excluding any specific or valuation reservesestablishedby an association or at the direction of the commissioner to cover a potentialloss on a specific loan or transaction.

      (y)   "Withdrawable capital" shall mean the sum of all savings deposits,shares or other authorized accounts of an association for fixed, minimumor indefinite periods of time as are authorized by the bylaws of an associationand regulations of the commissioner, excluding net worth accounts.

      (z)   "Residential real property" or "residential real estate" shall meanleaseholds, homes (including condominiums and cooperatives, except thatin connection with loans on individual cooperative units, such loans shallbe adequately secured as defined by the commissioner), combinations of homesand business property, other dwelling units or combinations of dwellingunits including homes and business property involving only minor or incidentalbusiness use, or property to be improved by construction of such structures.

      (aa)   "Loans" shall include obligations and extensions or advances ofcredit; and any reference to a loan or investment includes an interest insuch a loan or investment.

      (bb)   "State" shall mean any state of the United States, the District ofColumbia, the Commonwealth of Puerto Rico, the Virgin Islands, the Canal Zone,Guam, American Samoa, and any territory or possession of the United States.

      History:   L. 1943, ch. 133, § 1; L. 1955, ch. 140, § 1; L.1959, ch. 123, § 1; L. 1981, ch. 105, § 1; July 1.