Kansas House Bill HB2235

Kansas 2025-2026 Regular Session

• Introduced: 2/4/25
• Refer: 2/4/25

Caption

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.

Summary

HB 2235 updates Kansas’s Technology-Enabled Fiduciary Financial Institutions Act (TEFFI Act) and folds it into the state banking code. The bill revises and expands statutory definitions for TEFFIs, fidfin transactions, alternative asset custody accounts, certificates, trust certificates, and related digital-record concepts. It also clarifies that TEFFIs may provide financing through fidfin trusts, acquire or invest in alternative assets, issue certificates tied to trusts or custody accounts, and use technology platforms and third-party service providers without those arrangements being treated as separate trust offices or out-of-state trust facilities in certain circumstances. The bill lowers the TEFFI charter application fee from $250,000 to $50,000 beginning July 1, 2025, and adjusts annual assessment and reporting rules. It sets reporting deadlines, exempts TEFFIs from certain records-retention requirements, and gives the state bank commissioner supervision and examination authority over TEFFIs, including authority to adopt rules and regulations and contract for technical assistance. The bill also modifies the TEFFI income tax credit so that Kansas nonprofit corporations qualify as eligible charities for required distributions tied to TEFFI activity. HB 2235’s practical effect is to make Kansas’s TEFFI framework more detailed and operationally flexible while reducing entry costs for new applicants. It affects the banking code, TEFFI chartering and supervision provisions, and the Kansas income tax credit statute for fiduciary financial institutions. It also changes how TEFFI-related distributions are routed, preserving the economic-growth-zone incentive structure while broadening the set of organizations that can receive qualifying charitable distributions. Because no committee transcripts or recorded votes were provided, there is no documented debate or roll-call sentiment in the materials supplied. Based on the bill text and caption, the overall policy direction appears supportive of TEFFI development, with a focus on modernization, regulatory clarity, and economic development incentives. The main policy tradeoff is that the bill eases charter costs and expands operational flexibility while maintaining commissioner oversight and distribution requirements tied to charitable and economic-growth-zone goals.

Impact

HB 2235 amends multiple sections of chapter 9 of the Kansas Statutes Annotated and the Kansas income tax act. It revises the TEFFI Act’s definitions and operating rules, lowers the charter application fee, changes reporting and assessment timing, authorizes certificates and trust certificates, clarifies supervision by the state bank commissioner, and expands the list of qualified charities to include Kansas nonprofit corporations for purposes of the TEFFI income tax credit. It also updates related banking-code references and repeals the prior versions of the affected statutes.

Sentiment

No committee discussion or vote history was provided, so there is no direct record of support or opposition in the supplied materials. On its face, the bill reflects a generally favorable posture toward TEFFIs and fintech-style fiduciary services, emphasizing modernization, lower barriers to entry, and economic development. The structure of the bill suggests support for the industry while preserving state oversight and charitable distribution requirements.

Contention

The likely points of contention are the reduced charter application fee, the scope of TEFFI powers over alternative assets and digital certificates, and the extent to which TEFFIs are exempted from certain banking and records requirements. Another possible issue is the bill’s economic-development model, which ties TEFFI activity to required distributions and tax credits in economic growth zones. Supporters would likely emphasize innovation and investment attraction, while critics may focus on regulatory risk, consumer protection, and whether the incentives are sufficient or too generous.