9-1405.   Deposit of securities, security entitlements and financial assetsin securities account; written custodial agreement; receipt.(a) All bonds and securities given by any bank, savings and loan association orsavingsbankto secure public moneys of the United States or any board, commission or agencythereof, shall be deposited as required by the United States government or anyof its designated agencies.

      (b)   All securities, securityentitlements and financial assets securing the deposits of anymunicipal corporation or quasi-municipal corporation shall be depositedin a securities account with a bank incorporated under the laws of this state,ororganized under the laws of the United States or another state and which hasa main or branch office in this state, a trust company incorporated under the laws of this state or another state, thefederalhomeloan bank of Topeka or with the state treasurer pursuant to a writtencustodial agreement and areceipt taken therefor with onecopy going to the municipal corporation or quasi-municipal corporationmaking the public deposit and one copy going to the bank, savings and loanassociation or savings bank which has secured such public deposits. The receiptshall identify the securities, security entitlements and financial assets whichare subject to a security interest to secure payment of the deposits of themunicipal corporation or quasi-municipal corporation. This sectionshall not prohibit any custodial bank or trust company receiving securities,security entitlements and financial assets on depositfromissuing a receipt and depositing securities,security entitlements and financial assets identified in the receipt in suchbank's account withany bank chartered in Kansas or any other state, any trust company charteredin Kansas or any other state, any national bank, or anycentralized securitiesdepository wherever located within the United States. Nosecurities, security entitlements and financial assetssecuring public deposits shall bedeposited in any bank, trust company, or national bank which isowned directlyor indirectly by any parent corporationof the depository bank, or with any bank, trust company, or national bank,having common controlling shareholders,having a common majority ofthe board of directors or having common directors with the ability to controlor influence directly orindirectly the acts or policies ofthebank, savings and loan association or savings bank securing such public deposits. When securities, security entitlements and financial assetsare deposited with the state treasurer asauthorizedby this subsection, the state treasurer shall make a charge for such servicewhich is equivalent to the reasonable and customary charge made therefor. Securities, security entitlements and financial assets securing the depositsof any municipal corporation or quasi-municipal corporation may be depositedwith the federal reserve bank of Kansas City to be there held in such manner,under regulations and operating letters of the bank, as to secure payment ofthe deposits of the municipal corporation or quasi-municipal corporation in thedepository institution.

      (c)   The depositorybank, savings and loan association or savings bank and any agent, trustee,wholly-owned subsidiary or affiliate having identical ownership granting asecurity interest shall enterinto a written agreement with the municipal corporation or quasi-municipalcorporation granting the municipal corporation or quasi-municipal corporation asecurity interest in the securities, security entitlements and financial assetsqualified under K.S.A. 9-1402, and amendments thereto, to secure payment ofdeposits of public moneys of the municipal corporation or quasi-municipalcorporation. Such security interests shall be perfected by the depositorybank, savings and loan association or savings bank and any agent, trustee,wholly-owned subsidiary or affiliate having identical ownership granting asecurity interest causing controlof the securities, security entitlements and financial assets under the Kansasuniform commercial code to be given to the municipality or quasi-municipality. The security agreement and the custodial agreement shall be in writing,executed by all parties thereto, maintained as part of their official records,and except for the municipal corporations or quasi-municipal corporation,approved by their boards of directors or their loan committees, which approvalsshall be reflected in the minutes of the boards or committees.

      (d)   A bank, savings and loan association or savings bank which fails to payaccording to its termsanydepositof public moneys of any municipal or quasi-municipal corporation shallimmediately take such actions as are required to enable bonds andsecurities pledged to secure such deposit to be sold to satisfy itsobligation to the municipal or quasi-municipal corporation.

      History:   L. 1947, ch. 102, § 67; L. 1975, ch. 44, § 24; L. 1976,ch. 58, § 1; L. 1982, ch. 52, § 4; L. 1983, ch. 47, § 5; L. 1985,ch. 58, § 4; L. 1986, ch. 76, § 5; L. 1989, ch. 48, § 44; L. 1990, ch.60, § 1;L. 1993, ch. 207, § 1;L. 1994, ch. 105, § 1;L. 1997, ch. 180, § 6; May 29.