WeVote
Log In

Bill

Bill

HB 2235

Updating provisions of the technology-enabled fiduciary financial institutions (TEFFI) act by making the act part of the state banking code, adjusting and providing certain definitions, reducing the TEFFI charter application fee, authorizing the issuance of certificates and trust certificates, providing for the supervision of TEFFIs by the state bank commissioner and including Kansas nonprofit corporations as qualified charities for the TEFFI income tax credit.

2025-2026 Regular Session

HB 2235 brings TEFFIs under Kansas’s State Banking Code, expanding powers (certificates/trusts) and oversight while lowering charter fees.

Died in Committee
#financialinstitutions #taxation
0
WeVote Research Nonpartisan
Bill Summary · HB 2235

Summary — HB 2235 (2025) — Technology-Enabled Fiduciary Financial Institutions (TEFFI) Act (Kansas)

Main purpose / intent

HB 2235 updates and reorganizes the Technology‑Enabled Fiduciary Financial Institutions (TEFFI) Act by making it part of the Kansas State Banking Code, clarifying and adding definitions, expanding regulatory authority and TEFFI powers, and adjusting fee and tax‑credit provisions. The bill is intended to integrate TEFFIs into the state banking regulatory framework while expanding permissible activities (notably issuance of certificates tied to alternative assets and trusts).

Key provisions

  • Incorporates the TEFFI Act into the State Banking Code (chapter 9).
  • Definitions: adds and revises terms used throughout the TEFFI Act (examples include “certificate,” “alternative asset custody account,” “controllable electronic record,” etc.).
  • Charters and fees:
    • Reduces the fiduciary financial institution charter application fee from $100,000 to $50,000.
  • Regulatory supervision and reporting:
    • Expands the authority of the State Banking Board and the State Bank Commissioner to regulate and supervise TEFFIs.
    • Requires TEFFIs to file an annual report of assets and liabilities with the Commissioner by March 1 each year.
    • Other financial reports requested by the Commissioner are due no earlier than 60 days after request.
    • Exempts TEFFIs from certain record‑retention and reporting obligations: permanent retention of business records, daily transaction summaries of assets/liabilities/net worth, and a monthly report of fiduciary asset transactions.
  • Powers and products:
    • Explicitly authorizes TEFFIs to issue “certificates” representing beneficial ownership of a trust or assets held in an alternative asset custody account, and to act as trustee and issue certificates on behalf of trusts.
    • “Certificate” may include digital implementations (e.g., records maintained via distributed ledger technology or other machine‑based digitization).
  • Tax credit / charities:
    • Expands the definition of “qualified charities” for purposes of the fiduciary financial institution income tax credit to include Kansas nonprofit corporations regardless of their federal tax classification.

Who is affected

  • TEFFIs (existing or prospective): gain new powers and fall under broader banking supervision.
  • State Bank Commissioner & State Banking Board: gain supervisory and regulatory responsibilities.
  • Department of Revenue / State General Fund: potential revenue impacts (see fiscal note).
  • Kansas nonprofit corporations: become eligible as “qualified charities” for the TEFFI income tax credit.
  • Investors, alternative asset holders, and trust beneficiaries: affected by new certificate structures and custodial frameworks.

Fiscal and procedural notes

  • Fiscal note (Division of the Budget, 2/11/2025):
    • Lower charter fee (−$50,000 per application) would reduce State General Fund revenues relative to current law.
    • Expanding qualified charities could increase claims of the TEFFI income tax credit, further reducing State General Fund revenues (magnitude uncertain).
    • Office of the State Bank Commissioner indicates it can implement provisions with existing resources and does not anticipate immediate new TEFFI applications (no fiscal effect reflected in FY 2026 budget).
  • Legislative status / timing:
    • Introduced: January 29, 2025.
    • Hearing scheduled: Friday, February 14, 2025, 9:00 AM, Room 218‑N.

Practical impact / considerations

  • Lower application cost and clarified powers may make Kansas more attractive for TEFFIs; however, no applicants have approached the Commissioner to date.
  • Bringing TEFFIs into the State Banking Code increases regulatory oversight and legal clarity.
  • Expanded charity eligibility broadens who may receive benefit from fiduciary structures but may increase state tax credit costs.

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

Sign in to ask a question.