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10-1009. Municipal bonds or obligations; interest rates; limitation. (a) The maximum stated rate of interest which may be fixed on fixed-rate bonds issued by a municipality or taxing subdivision of the state of Kansas shall be determined on the day the bonds are sold and shall not exceed the daily yield for the ten-year treasury bonds published by The Bond Buyer, in New York, New York, on the Monday next preceding the day on which the bonds are sold, plus (1) three percent, if the interest on the bonds is excluded from gross income for federal income tax purposes or (2) four percent, if the interest on the bonds is included in gross income for federal income tax purposes.

(b) The maximum stated rate of interest which may be fixed on variable-rate bonds issued by a municipality or taxing subdivision of the state of Kansas shall be determined on the date on which the rate is determined in accordance with the resolution or ordinance of the issuer and shall not exceed the daily yield for the ten-year treasury bonds published by The Bond Buyer, in New York, New York, on the Monday next preceding such date, plus (1) three percent, if the interest on the bonds is excluded from gross income for federal income tax purposes or (2) four percent, if the interest on the bonds is included in gross income for federal income tax purposes.

(c) Except as provided for variable-rate bonds, the maximum rate of interest specified in this section shall be applicable to bonds issued after the effective date of this act. The maximum rate of interest on variable-rate bonds issued prior to the effective date of this act shall be the higher of (1) the maximum rate of interest specified by subsection (a) or (b) of this section, as in effect prior to the effective date of this act, (2) the maximum rate of interest specified in this section or (3) the rate for such variable-rate bonds specified in the documents authorizing the issuance thereof.

(d) Notwithstanding the foregoing, for the period from the effective date of this act until and including June 30, 2017, the maximum stated rate of interest which may be fixed on fixed-rate or variable-rate bonds issued by a municipality or taxing subdivision of the state of Kansas shall be determined on the day the bonds are sold and shall not exceed the daily yield for the ten-year treasury bonds published by The Bond Buyer, in New York, New York, on the Monday next preceding the day on which the bonds are sold, plus (1) 6%, if the interest on the bonds is excluded from gross income for federal income tax purposes or (2) 7%, if the interest on the bonds is included in gross income for federal income tax purposes.

History: L. 1970, ch. 64, § 104; L. 1975, ch. 48, § 1; L. 1980, ch. 55, § 1; L. 1982, ch. 54, § 1; L. 1987, ch. 60, § 6; L. 1988, ch. 65, § 2; L. 1990, ch. 63, § 1; L. 1993, ch. 67, § 2; L. 1994, ch. 103, § 2; L. 2002, ch. 75, § 1; L. 2009, ch. 95, § 1; L. 2010, ch. 54, § 2; L. 2012, ch. 167, § 1; July 1.

Law Review and Bar Journal References:

"New Kansas Usury Laws and Interest Rate Regulation," Robert G. Martin, 20 W.L.J. 572, 587 (1981).

Attorney General's Opinions:

Investment of funds received from industrial revenue bonds. 81-117.

Sales tax revenue bonds; use of transient guest tax revenues on payment thereof. 87-185.

CASE ANNOTATIONS

1. Limitation hereunder applicable to all bonds issued after effective date, though previously authorized. Baker v. Unified School District, 206 Kan. 581, 585, 586, 480 P.2d 409.


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