Kansas Statutes

Chapter 10: Bonds And Warrants

Article 6: Registration Of Bonds

Statutes:

• 10-601: Registration of bonds by state treasurer; notations; coupons; transfers; negotiability.
• 10-602: Assignments; release from registration.
• 10-603: Payment of bonds; deposit in bond services fee fund.
• 10-604:
• 10-605: Negotiability of coupons.
• 10-606: Registration of bonds by designated fiscal agents; record; notice; coupons; transfers; assignments; forms.
• 10-607: Same; redemption of bonds.
• 10-608 to 10-619: Reserved.
• 10-620: Citation of act.
• 10-621: Definitions.
• 10-622: Purpose of registration; federal requirement.
• 10-623: Systems of registration; approval by attorney general.
• 10-624: Uncertificated bonds; statement of rights; facsimile signatures.
• 10-625: Authenticating trustee, transfer agent, registrar; paying and other agents; central depository system.
• 10-626: Costs of system of registration; fees and charges.
• 10-627: Transfer fee.
• 10-628: State treasurer; municipal securities rulemaking board requirements.
• 10-629: Bonds pledgeable as a security for public deposits.
• 10-630: Registration records; exempt from public inspection.
• 10-631: Act applicable at the election of issuer; rescission of election prohibited; applicable to previously issued bonds.
• 10-632: Provisions to be construed with uniform commercial code and contract law.

• 10-601: Registration of bonds by state treasurer; notations; coupons; transfers; negotiability. The state treasurer shall register any state bonds or bonds issued by a municipality as defined by K.S.A. 10-101, and amendments thereto, which the bondholder may present to the state treasurer, for recording in a book kept for that purpose, showing the municipality issuing the same, the series of the bond, the date, amount, number, maturity, the purpose for which the bond was issued and the name and post-office address of the bondholder. On registering any bond the state treasurer shall notify the municipality issuing the bond of its registration and the bond shall be payable on its maturity by the municipality to the state treasurer. When the state treasurer registers any bond, the registration shall be evidenced by notation to that effect on the reverse side of the bond, after which no transfer shall be valid unless made at the written request of the registered owner or a duly authorized agent in writing and similarly noted on the bond. The bond may be discharged from registration by being registered to bearer and thereupon transferability shall be restored. The bond may again be registered or be transferred to bearer as before. Registration shall not affect the negotiability of any interest coupons appertaining to any bond issued prior to the effective date of this act. This section shall not apply to any bond or bonds for which a fiscal agent other than the state treasurer has been designated.

        History:   L. 1923, ch. 225, § 1; R.S. 1923, § 10-601; L. 1969, ch. 63, § 5; L. 1981, ch. 57, § 1; L. 1983, ch. 49, § 33; May 12.

• 10-602: Assignments; release from registration. After the registration of any bond it shall be negotiable only by formal assignment before a notary public, identifying the bond assigned by the name of the municipality issuing the same, the number, date, amount, and said assignment shall be acknowledged the same as conveyances of real property. All assignments of bonds shall be forwarded to the state treasurer for endorsement on the state treasurer's records, which record shall set forth the name and address of the assignee, except when it is the desire of the registered owner to release the bond from registration and further assignment, in which case the bond shall be assigned to "bearer," and by the state treasurer so endorsed upon his or her records. The state treasurer shall have printed such forms as may be necessary for use in making such assignments which shall be delivered to persons desiring the same on request.

        History:   L. 1923, ch. 225, § 2; R.S. 1923; § 10-602; L. 1927, ch. 93, § 1; June 1.

• 10-603: Payment of bonds; deposit in bond services fee fund. On the maturity of any registered bond, it shall be forwarded by the holder to the state treasurer, who shall collect the same and pay the proceeds to the last registered holder thereof. All fees collected under the provisions of this act shall be deposited in the state treasury and credited to the bond services fee fund established under K.S.A. 10-108, and amendments thereto.

        History:   L. 1923, ch. 225, § 3; R.S. 1923, § 10-603; L. 2000, ch. 125, § 13; July 1.

• 10-604:

        History:   L. 1923, ch. 225, § 4; R.S. 1923, § 10-604; L. 1969, ch. 66, § 2; Repealed, L. 1983, ch. 49, § 100; May 12.

• 10-605: Negotiability of coupons. This act shall not affect the negotiability of any coupons attached to any registered bond.

        History:   L. 1923, ch. 225, § 5; R.S. 1923, § 10-605; L. 1983, ch. 49, § 34; May 12.

• 10-606: Registration of bonds by designated fiscal agents; record; notice; coupons; transfers; assignments; forms. The Kansas bank designated as the fiscal agent by the governing body of a municipality shall register any bonds payable at the office of the fiscal agent which the bondholder may present, for recording in a book kept for that purpose, showing the municipality issuing the bond, the series of the bond, the date, amount, number, maturity, the purpose for which the bond was issued and the name and post-office address of the bondholder. On registering any bond, the fiscal agent shall notify the municipality issuing the bond of its registration and the bond shall be payable on its maturity by the municipality through the fiscal agent. When the fiscal agent registers any bond, the registration shall be evidenced by notation to that effect on the reverse side of the bond, after which no transfer shall be valid unless made at the written request of the registered owner or a duly authorized agent in writing and similarly noted on the bond. The bond may be discharged from registration by being registered to bearer and thereupon transferability shall be restored. The bond may again be registered or be transferred to bearer as before. Registration shall not affect the negotiability of any interest coupons appertaining to any bond issued prior to the effective date of this act. The fiscal agent shall have printed forms for use in making such assignments which shall be delivered to persons desiring the same on request.

        History:   L. 1969, ch. 63, § 6; L. 1981, ch. 57, § 2; L. 1983, ch. 49, § 35; May 12.

• 10-607: Same; redemption of bonds. On the maturity of any registered bond or when any registered bond is called for redemption, it shall be forwarded by the holder to the fiscal agent, who shall collect the same and pay the principal thereof to the last registered holder thereof.

        History:   L. 1969, ch. 63, § 7; July 1.

• 10-608 to 10-619: Reserved.
• 10-620: Citation of act. K.S.A. 10-620 to 10-632, inclusive, shall be known and may be cited as the Kansas bond registration law.

        History:   L. 1983, ch. 49, § 1; May 12.

• 10-621: Definitions. As used in this act:

        (a)   "Bond" means a certificated or an uncertificated bond, no-fund warrant, temporary note or other agreement to repay borrowed money and any interest thereon whether in the form of a contract, lease, installment purchase agreement or otherwise, including a share, participation or other interest in any such agreement.

        (b)   "Certificated bond" means a registered bond which is represented by an instrument.

        (c)   "Code" means the internal revenue code of 1954, as amended.

        (d)   "Financial intermediary" means a bank, broker or clearing corporation or the nominee of any of them or other person or nominee which in the ordinary course of its business maintains bond accounts for its customers, when so acting.

        (e)   "Issuer" means a public entity which issues a bond.

        (f)   "Obligation" means an agreement of an issuer to pay the principal and any interest on a bond.

        (g)   "Original issuance" means the first transfer of a bond by an issuer to a purchaser.

        (h)   "Public entity" means the state of Kansas, political subdivisions, cities, counties, state universities or colleges, school districts, all special districts, joint agreement entities, public authorities, public trusts, nonprofit corporations and other organizations which are authorized under the constitution or laws of the state of Kansas to issue bonds, the interest thereon which may be exempt from federal income tax.

        (i)   "Registered bond" means a bond issued by a public entity pursuant to a system of registration.

        (j)   "System of registration" means a plan which:

        (1)   Provides that (A) a certificated bond specify a person entitled to the bond and the rights it represents and (B) the transfer of a certificated bond may be registered upon books maintained for that purpose by or on behalf of the issuer; and

        (2)   provides that (A) the transfer of an uncertificated bond be registered upon books maintained for that purpose by or on behalf of the issuer and (B) such books specify the person entitled to the bond and the rights it represents.

        (k)   "Uncertificated bond" means a bond which is issued pursuant to a system of registration and is not represented by an instrument.

        History:   L. 1983, ch. 49, § 2; May 12.

• 10-622: Purpose of registration; federal requirement. (a) The code provides that interest on certain bonds may not be exempt from federal income tax if they are not in registered form. It is therefor a matter of concern to Kansas that public entities be authorized to provide for the issuance of bonds in such form. It is a purpose of this act, subject to the approval of the attorney general, to authorize all public entities to establish and maintain a system by which bonds may be issued in registered form within the meaning of this act.

        (b)   Bonds have traditionally been issued in bearer rather than in registered form, and a change from bearer to registered form will significantly affect the relationships, rights and duties and costs of issuers of and persons who deal with bonds. Such effects will impact the various issuers and varieties of bonds differently depending on their legal and financial characteristics, their markets and their adaptability to recent and prospective technological and organizational developments. It is therefor a matter of concern to Kansas that public entities be provided flexibility in the development of such systems and control over system incidents, so as to accommodate such differing impacts. It is the purpose of this act to authorize the establishment and maintenance and amendment, from time to time, of differing systems of registration of bonds, including system incidents, so as to accommodate the differing impacts upon issuers and varieties of bonds.

        History:   L. 1983, ch. 49, § 3; May 12.

• 10-623: Systems of registration; approval by attorney general. (a) Each issuer is authorized to establish and regularly maintain a system of registration with respect to the bonds it issues. The system may either be a system pursuant to which only certificated bonds are issued or a system pursuant to which both certificated and uncertificated bonds are issued. The issuer, from time to time, may discontinue and reinstitute either system.

        (b)   The system shall be established and regularly maintained, amended, discontinued or reinstituted for the issuer by its governing body.

        (c)   The system shall be described in the ordinance or resolution which authorizes the original issuance, and in subsequent ordinances or resolutions providing for amendments and other matters. Such description may be by reference to a program of the issuer which is established by its governing body.

        (d)   The system shall define the method or methods by which transfer of the bonds shall be effective with respect to the issuer, which method or methods shall be exclusive, substantial compliance being essential to a valid transfer, and by which payment of principal and any interest shall be made. The system may permit the issuance of bonds in any denomination to represent several bonds of smaller denominations. The system may also provide for the form of any certificated bonds, for differing record and payment dates, varying denominations, and for accounting, canceled certificate destruction and other incidental matters.

        (e)   Under a system pursuant to which both certificated and uncertificated bonds are issued, both types of bonds may be regularly issued, or one type may be regularly issued and the other type issued only under described circumstances or to particular described categories of owners. Under a system pursuant to which uncertificated bonds are regularly issued, provision may be made for registration of pledges and releases.

        (f)   The system may include covenants of the issuer as to amendments, discontinuances and reinstitutions and the effect of such on the exemption of interest from federal income tax provided by the code.

        (g)   If the effect of a conversion from one of the forms of bonds hereunder provided for to a form not hereunder provided for is that interest shall continue to be exempt from federal income under the code, this act does not preclude such conversion.

        (h)   Each certificated bond may have placed upon it a certificate or certificates for the signature of the authenticating trustee, registrar, transfer agent or the like.

        (i)   No system of registration authorized herein shall be established without the approval of the attorney general. The attorney general may approve no more than two basic systems of registration for issuers. Variances from such systems may be approved when, in the opinion of the attorney general, it is in the public interest of the issuer or the state. The two approved basic systems of registration and any explanation, rules or regulations appertaining thereto which are determined to be necessary or desirable shall be published by the attorney general in the Kansas register prior to July 1, 1983.

        History:   L. 1983, ch. 49, § 4; May 12.

• 10-624: Uncertificated bonds; statement of rights; facsimile signatures. The issuer shall attach to its uncertificated bonds, written statements which provide a record of certain rights as of the time of issuance of the statements. Such statements shall be provided to each person acquiring rights by registration in uncertificated bonds and such statements shall be signed by a person whose signature is required or permitted to be placed on a certificated bond of the same class or series. The statement shall confer no rights on the recipient and it shall be neither a negotiable instrument nor a security.

        The written statements attached to uncertificated bonds may be signed with a facsimile of the signature of the person required to sign such statements. If such statements are signed with a facsimile signature, the transfer agent shall sign such statements manually.

        History:   L. 1983, ch. 49, § 5; May 12.

• 10-625: Authenticating trustee, transfer agent, registrar; paying and other agents; central depository system. (a) Except as provided by K.S.A. 10-501, and amendments thereto, an issuer may appoint the state treasurer or other agents authorized under the authority by which the bonds are issued as an authenticating trustee, transfer agent, registrar, paying or other agents for a term agreed upon and specify their rights, compensation and duties, limit their liabilities and provide for the payment of liquidated damages in the event of breach of duty imposed. Such liquidated damages may be made payable to a financial intermediary. None of such need have an office or do business within this state.

        (b)   An issuer may enter into agreements with the state treasurer, custodian banks and financial intermediaries, and nominees of any of them, in connection with the establishment and maintenance by others of a central depository system for the transfer or pledge of bonds. Any custodian banks and financial intermediaries, and nominees, if qualified and acting as fiduciaries, may also serve as authenticating trustees, transfer agents, registrars, paying or other agents of the issuer for the same issue of bonds.

        History:   L. 1983, ch. 49, § 6; May 12.

• 10-626: Costs of system of registration; fees and charges. (a) An issuer, prior to or at original issuance, may provide as a part of a system of registration, that the transferor or transferee of the bonds pay all or a designated part of the costs of the system, that costs be paid out of proceeds of the bonds, or that both methods be used. The portion of the costs of the system not provided to be paid for by the transferor or transferee or out of proceeds shall be the liability of the issuer.

        (b)   The issuer may, as a part of the system, provide for reimbursement or for satisfaction of its liability by payment by others. The issuer may enter into agreements with others for such reimbursement or payment, establish fees and charges pursuant to such agreements or otherwise and authorize the amount or estimated amount of such fees and charges to be reimbursed or paid from the same sources and by means of the same collection and enforcement procedures and with the same priority as the bond.

        History:   L. 1983, ch. 49, § 7; May 12.

• 10-627: Transfer fee. The transfer agent may charge to the presentor of a bond a transfer fee in an amount not to exceed the amount fixed by the state treasurer. The state treasurer shall fix the amount of the fee on July 1, 1983, and may adjust the amount annually thereafter. All fees collected by the state treasurer under the provisions of the Kansas bond registration law shall be deposited in the state treasury and credited to the bond services fee fund established under K.S.A. 10-108, and amendments thereto.

        History:   L. 1983, ch. 49, § 8; L. 2000, ch. 125, § 14; July 1.

• 10-628: State treasurer; municipal securities rulemaking board requirements. The state treasurer is hereby authorized to take any action necessary to comply with the appropriate municipal securities rulemaking board requirements for securities transfer or clearing agencies.

        History:   L. 1983, ch. 49, § 9; May 12.

• 10-629: Bonds pledgeable as a security for public deposits. Whenever any bond is authorized to be pledged as a security under K.S.A. 9-1402 et seq. or 75-4201 et seq., and amendments thereto, or under any other statute of this state, such bond shall be accepted as a security under such statute if (a) in the case of a certificated bond, it is assigned, delivered or pledged to the holder of the deposit for security in accordance with the provisions of such statutes; (b) in the case of an uncertificated bond, registration of a pledge of the bond is authorized by the system and the pledge of the uncertificated bond is registered; or (c) in a form approved by the attorney general, which assures the availability of the bond proceeds pledged as a security for public deposits.

        History:   L. 1983, ch. 49, § 10; May 12.

• 10-630: Registration records; exempt from public inspection. (a) Registration records of the issuer may be maintained at such locations within or without the state as the issuer determines.

        (b)   Records of the ownership or pledge of bonds are not subject to inspection or copying under any law of this state relating to the right of the public to inspect or copy public records.

        History:   L. 1983, ch. 49, § 11; May 12.

• 10-631: Act applicable at the election of issuer; rescission of election prohibited; applicable to previously issued bonds. (a) At the election of the issuer, made at any time prior to or at original issuance of the bond, this act may be made applicable, notwithstanding any provision of law to the contrary. When this act is applicable, it is alternative to any provision of law to the contrary and no such provision to the contrary shall apply.

        (b)   The public entity that authorizes the original issuance of the bond may make the election of the issuer which shall be part of the ordinance or resolution authorizing such issuance.

        (c)   An issuer shall not rescind an election after original issuance of the bond.

        (d)   Nothing in this act shall limit or prevent the issuance of bonds in any other form or manner authorized by law.

        (e)   The provisions of this act may be made applicable to bonds which have heretofore been authorized and issued.

        History:   L. 1983, ch. 49, § 12; May 12.

• 10-632: Provisions to be construed with uniform commercial code and contract law. The provisions of the Kansas bond registration law shall be construed in conjunction with the uniform commercial code and the principles of contract law relative to the registration and transfer of bonds.

        History:   L. 1983, ch. 49, § 13; May 12.