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HB 2281

Establishing the Kanbucks program to authorize the state treasurer to invest in linked deposits with eligible financial institutions to provide linked deposit loans to eligible borrowers and abolishing the Kansas agricultural production, housing, extraordinary utility costs and economic recovery loan deposit programs and the city utility low-interest loan program.

2025-2026 Regular Session

Creates Kanbucks: a state-backed, below-market linked-deposit program to spur low-cost loans for agriculture, housing, small business, and certain energy relief.

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Bill Summary · HB 2281

Summary — HB 2281 (Kanbucks Program)

Status: Introduced January 30, 2025 — Referred to House Committee on Financial Institutions and Pensions

Purpose

Creates the "Kanbucks" linked‑deposit program to encourage Kansas banks, credit unions, and farm credit institutions to make lower‑cost loans for agricultural production, housing and adult‑care home construction/development, small business purposes, and to provide relief for wholesale natural gas customers who incurred extraordinary costs during the February 2021 winter event. The bill also abolishes several existing linked‑deposit programs and continues any outstanding linked deposits under their original terms through July 1, 2025.

Key provisions

  • Establishes the Kanbucks program (new Sections 1–8).
  • Authorizes the State Treasurer, working with the Pooled Money Investment Board (PMIB) and the director of investments, to place linked deposit accounts with eligible lending institutions.
  • Aggregate deposit cap: up to 5.0% of the Pooled Money Investment Portfolio at any one time; PMIB approval required to exceed 5%.
  • Deposit interest: set at 2.0 percentage points below the applicable market rate (per K.S.A. 75‑4237), recalculated on the first business day of January and July each year; fiscal note references a minimum deposit interest rate of 0.25%.
  • Loan interest to borrowers: lenders must offer loans at an interest rate that is at least 2.0% below market (via the deposit) and may not charge more than 3.0 percentage points above the interest the state earns on the deposit. Loan interest rates are recalculated annually (first business day of January).
  • Loan size and terms:
    • Single‑loan cap for agricultural production or business loans: $2,500,000.
    • Housing loans: amortization period not to exceed 15 years.
    • Fiscal‑note language indicates other linked loans may have a maximum term of 10 years.
  • Eligibility:
    • Borrowers: farmers/family farm entities, housing developers or not‑for‑profit adult care home developers, businesses with ≤200 full‑time employees doing business in Kansas, and certain wholesale natural gas customers impacted by Feb 2021.
    • Lenders: Kansas banks, qualifying credit unions, and farm credit institutions that provide acceptable securities to PMIB.
  • Administration:
    • Eligible lending institutions underwrite loans and apply normal credit standards.
    • State Treasurer evaluates and approves loan packages and may adopt implementing rules.
    • State and State Treasurer are expressly not liable for borrower default.
    • Treasurer must submit an annual Kanbucks status report to the Governor and Legislature.

Fiscal and administrative impact (fiscal note highlights)

  • PMIB projects reduced investment earnings due to below‑market linked deposits:
    • Estimated revenue loss to pooled investments: $5.4 million in FY 2026 and $8.1 million in FY 2027.
    • Analysis assumes a $9.0 billion portfolio and linked deposits totaling 3.0% ($270M) in FY26 and 4.5% ($405M) in FY27; losses estimated as linked balance × 2.0%.
  • Treasurer expects initial rulemaking to be handled with existing resources but estimates one additional FTE and associated overhead (approx. $114,200 from the State Treasurer Operating Fund in FY2026) for ongoing administration.
  • The fiscal note notes potential local benefits (increased lending activity) are not monetized in the state revenue estimate.

Affected parties

  • Beneficiaries: eligible borrowers (farmers, housing and adult‑care home developers, small businesses ≤200 FTE, eligible wholesale natural gas customers).
  • Participating financial institutions: Kansas banks, qualifying credit unions, and farm credit institutions.
  • State fiscal accounts that earn retained investment interest (State General Fund, State Highway Fund, Budget Stabilization Fund, etc.) could see reduced interest receipts.

Other procedural elements

  • Repeals multiple existing Kansas linked‑deposit statutes/programs and removes related statutory references (list contained in bill caption).
  • Outstanding linked deposit loans in effect on July 1, 2025, remain governed by their original program terms.
  • Treasurer may promulgate rules and must report annually on program status.

For more detail, see the bill text (introducing version) and the April 29, 2025 fiscal note from the Kansas Division of the Budget.

Compiled from official sources — confirm details with the bill’s official record.

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