"Lawmakers are going to face a very challenging session this year, so we have taken a basic approach to our legislative package with what we think are important issues for Kansans. We will try and make investing for children's education more attractive because educating them is absolutely critical," said Jenkins. "In addition to this, we are asking for a change in the unclaimed property laws that could net an initial $10 million for state coffers. It is important to remain proactive during these challenging budget times."

Demutualization Bill

When an insurance company changes its corporate structure from a mutual company, the original policyholders automatically become owners in the restructured company. As compensation, the new owners have the option of either receiving cash or stock for their "ownership" in the company. The newly restructured insurer is then required to contact each policyholder for notification of the structure change and to communicate their ownership options (e.g. cash or stock). If the insurer is unable to locate the new owner, then the financial assets resulting from the reorganization become "unclaimed" and must be reported to the state where the owner was last known to reside. According to current Kansas law, those assets are turned over to the state five years after reorganization. However, the change that Treasurer Jenkins is requesting would accelerate the reporting period to two years after restructuring, versus the current five year period. To date, 21 states have already passed similar laws.

It has been estimated by Prudential that if the reporting period is changed, the State of Kansas could receive up to $10 million for FY 2005. As a matter of law, financial assets remitted as unclaimed property are deposited into the State General Fund. Currently, this bill enjoys the support of all interested parties including the insurance industry.

Learning Quest 529 Education Savings Plan Enhancements

In 1999, the Kansas Legislature authorized the creation of the Kansas Learning Quest 529 Education Savings program to help Kansans save for their post-secondary education needs. The program received its "529" designation after the portion of the Internal Revenue Service Code that it was created under. Treasurer Jenkins administers the program and American Century® Investment Management, Inc. currently serves as the program manager. The program officially opened on July 1, 2000 and permits individuals and organizations to contribute to Learning Quest accounts that can be used to pay for a beneficiary's qualified educational expenses.

An attractive feature of the Learning Quest program is the current adjusted gross income tax deduction for state filings of up to $2,000 for individuals or $4,000 for married couples filing jointly, per beneficiary, per year. Treasurer Jenkins has proposed an adjusted tax deduction increase to $4,000 and $8,000, respectively. The proposed increase is needed to ensure that the Kansas plan remains competitive with other states' plans. Plus, the increased deduction will offer a greater incentive for parents and grandparents to invest in higher education and send their loved ones to college or any other qualified educational institution (e.g. public/private universities, community colleges and vocational or technical schools). The proposed higher deduction limits compare favorably to other states' deduction limits.

General information about Learning Quest is available by calling 1-800-579-2203 or by visiting www.learningquest.com. Investment advisors interested in Learning Quest Advisor should call 1-877-882-6236 or visit www.americancentury/ipro.com. For information about the Schwab 529 College Savings Plan or purchasing Learning Quest through Schwab, call 1-800-435-4000, visit a Schwab Investor Center or go to www.schwab.com/529.

Treasurer Lynn Jenkins, CPA is a former State Representative and Senator from Topeka and was elected as the 37th State Treasurer on November 5, 2002. For more information about the Kansas 529 program or any of the programs offered by Treasurer Jenkins, please access her Web page at www.kansasstatetreasurer.com.

* Changes resulting from the 2001 Tax Act are effective through Dec. 31, 2010, and may or may not be extended past that date with further legislative action.

As with any investment, withdrawal value may be more or less than original investment. An account owner investing in a 529 plan outside of the state in which they pay taxes may lose any tax benefits offered by their own state's plan. Please consult the handbook for additional information about applicable fees.

Learning Quest and the Schwab 529 College Savings Plan are administered by Kansas State Treasurer Lynn Jenkins, CPA. Managed by American Century Investment Management, Inc. Notice: Accounts established under either Learning Quest or the Schwab 529 College Savings Plan and their earnings are neither insured nor guaranteed by the State of Kansas, the Kansas State Treasurer, American Century or Charles Schwab & Co., Inc. Learning Quest is distributed by American Century Investment Services, Inc. Accounts established under the Schwab 529 Plan are domiciled at American Century and not at Schwab.