At the beginning of session our office had three goals and I am pleased to announce that we were successful on all three issues, well almost successful.

Our office was successful in working with legislative leaders to pass an unclaimed property bill regarding the demutualization of life insurance companies. The bill allows the Treasurer's office to recoup money from insurance companies that change their corporate structure from a mutual company to a stock owned company. The original policyholders automatically become owners in the restructured company and as compensation for their "ownership," they can receive either cash or stock. The result was an immediate $10 million for Kansans but the final number may reach much higher. Now, the rightful owners or their heirs will have access to their money much sooner and will be able to search for FREE at www.kansascash.com.

The second legislative priority for our office was increasing the contribution limits for Learning Quest, the state's 529 college savings program. When the program was launched a few years ago, the state tax-deductible contribution limits were $2,000 for individuals or $4,000 for married couples, filing jointly. Beginning January 1, 2005, those parents or grandparents who want to help their loved ones go to college will be able to deduct $3,000 and $6,000, respectively, from their state taxes. Anyone can start a Learning Quest account but only Kansas residents are eligible for the increased personal income tax deductions on their Kansas returns.

The change will ensure that Learning Quest remains competitive and among the best plans in the nation. Plus, with college costs continuing to rise, anything that we can do to help our next generation achieve their goals is important and this legislation accomplishes that task.

Finally, we have worked with the legislature for two years in a row to put into place a solid funding source for our office, that eliminates any draw on State General Funds. By working with a bi-partisan group of leaders in both the House and the Senate we were able to compromise on funding that would allow us to use a business model, charging minimal cash management fees to state agencies that utilize our banking services.

However, Governor Sebelius vetoed our legislation, favoring her own proposal to charge a new tax on individual Kansans. The Governor's plan could cost Kansans a staggering tax on unclaimed property that could reach nearly 77%. Currently, Kansans with unclaimed property do not ever see any interest earnings from their lost property. The state keeps the interest off of the unclaimed property fund and uses it to fund things like the Capitol parking garage and renovations. In addition, many of these assets have already been taxed, therefore, the Sebelius plan would result in double-taxation. I believe strongly that double taxation is wrong and I will continue to work with legislators to provide funding for our office using the model currently in place.

As always, it is a pleasure serving as your State Treasurer. If you have any questions or would like additional information about any of the programs that we offer, please go online at www.kansasstatetreasurer.com.