68-2311. Express highways and freeways; management and investment of moneys in freeway fund and freeway construction fund; standards and limitations; powers and duties of secretary of transportation a
68-2311
68-2311. Express highways and freeways; management and investment ofmoneys in freeway fund and freeway construction fund; standards andlimitations; powers and duties of secretary of transportation and pooledmoney investment board.(a) All moneys received pursuant to the authority of this act, whetheras proceeds from the sale of bonds or as payments from the state freewayfund, shall be deemed to be trust funds to be held and applied solely asprovided in this act. The secretary of transportation shall have theresponsibility for the management of the state freeway fund and the statefreeway construction fund. Within the limitations provided by this section,the pooled money investment board shall invest and reinvest moneys in thefunds and shall acquire, retain, manage, including theexercise of any voting rights, and dispose of investments of the funds,except that moneys in the state freeway construction fund may be investedonly in direct obligations of, or obligations the principal of and intereston which are unconditionally guaranteed by, the United States of America orin interest-bearing time deposits in any commercial banklocated in Kansas, or, if the board determines that it is impossible todeposit such moneys in such time deposits, in repurchase agreements of lessthan 30 days' duration with a Kansas bank or with a primary governmentsecurities dealer which reports to the market reports division of thefederal reserve bank of New York for direct obligations of, or obligationsthat are insured as to principal and interest by, theUnited States government or any agency thereof. In investing or reinvestingmoneys in the funds, and in acquiring, retaining, managing and disposing ofinvestments of the funds, there shall be exercised the judgment and careunder the circumstances then prevailing, which persons of prudence,discretion and intelligence exercise in the management of their ownaffairs, not in regard to speculation but in regard to the permanentdisposition of their funds, considering the probable income as well as theprobable safety of their capital. Within the limitations of the foregoingstandard and subject to subsection (c), there may beacquired, retained, managed and disposed of as investments of the fundsevery kind of investment which persons of prudence, discretion andintelligence acquire, retain, manage and dispose of for their own account,with the objective of all such investments being to make the moneys in suchfund as productive as possible, except that no funds may be invested inthe common stock of any foreign or domestic corporation. Nothing in thissubsection shall be deemed to require the disposition of any common stockin which funds were invested prior to the effective date of this act.
(b) Subject to the standards, objectives and restrictions set forth insubsection (a), the pooled money investment board shall formulate policiesfor the investment and reinvestment of moneys in the state freeway fund andthe state freeway construction fund and the acquisition, retention,management and disposition of investments of these funds. From time totime, the pooled money investment board shall review any policies soadopted and make such changes therein as it deems necessary.
(c) Notwithstanding any of the provisions of subsection (a) or anypolicies adopted pursuant to subsection (b) to the contrary, the pooledmoney investment board shall invest only those moneys which are notobligated to be expended within the immediately ensuing six-month periodpursuant to contract or for debt service requirements pursuant to theprovisions of this act.
(d) The pooled money investment board may enter into contracts with oneor more financial advisors whom the board determines to be qualified,whereby the financial advisors undertake to perform the functions specifiedin subsection (a) to the extent provided in the contract. Performance offunctions under contract so entered into shall be paid for out of the grossinterest or other income of the investments with respect to which thefunctions are performed, and the net interest or other income of theinvestments after that payment shall be considered income of the statefreeway fund. The pooled money investment board shall require a financialadvisor contracted with to give a fidelity bond in such sum as may be fixedby law or, if not so fixed, as may be fixed by the board, with corporatesurety authorized to do business in this state.
(e) In the acquisition or disposition of securities, the pooled moneyinvestment board may rely on the written legal opinion of a reputable andnationally recognized bond attorney or attorneys, or the written legalopinion of the attorney of the financial advisors.
(f) Except as provided in subsection (d) and this subsection the custodyof money and securities of the funds shall remain with the state treasurer,except that the pooled money investment board may arrange for the custodyof such money and securities as it considers advisable with a member bankof the federal reserve system, or with one or more banks in the state ofKansas, or both, to be held in safekeeping by the bank or banks for thecollection of the principal and interest or other income or of the proceedsof sale. The services provided by any such bank shall be paid for out ofthe gross receipts from such interest or other income, and the net interestor other income after such payment shall be considered income of the state freeway fund.
(g) With the advice and consent of the state director of accounts andreports, the pooled money investment board shall establish the requirementsand procedure for reporting any and all activity relating to investmentfunctions provided for in this section, in order to prepare a recordmonthly of the investment income and changes made during the precedingmonth. The record shall reflect a detailed summary of investment,reinvestment, purchase, sale and exchange transactions, showing the datesthereof, the prices paid and obtained, the names of the dealers and suchother information as the board may consider advisable to reflect a trueaccounting of the investment activity of the state freeway fund and thestate freeway construction fund.
(h) The pooled money investment board shall provide for an examinationof the investment program annually. The examination shall include anevaluation of current investment policies and practices and of specificinvestments of the funds in relation to the standards and objectives setforth in subsection (a) and other criteria as may be appropriate, andrecommendations relating to the investment policies and practices and tospecific investments of the funds as are considered necessary or desirable.
History: L. 1972, ch. 252, § 10; L. 1975, ch. 404,§ 5; L. 1975, ch. 427, § 233; L. 1976, ch. 297, § 2;L. 1987, ch. 295, § 7; L. 1989, ch. 48, § 89; July 1.