Prohibiting the office of the state bank commissioner or any other state agency from becoming a receiver for a technology-enabled fiduciary financial institution that becomes insolvent or declares bankruptcy.

Session of 2026
HOUSE BILL No. 2418
By Joint Committee on Fiduciary Financial Institutions Oversight
1-5
AN ACT concerning financial institutions; relating to the technology-
enabled fiduciary financial institutions act; prohibiting the office of the
state bank commissioner or any other state agency from becoming a
receiver for a technology-enabled fiduciary financial institution that
becomes insolvent or declares bankruptcy; amending K.S.A. 2025
Supp. 9-2301 and repealing the existing section.
Be it enacted by the Legislature of the State of Kansas:
New Section 1. (a) The office of the state bank commissioner or any
other state agency shall not become a receiver for any technology-enabled
fiduciary financial institution that becomes insolvent or declares
bankruptcy. For purposes of this section, "state agency" means the same as
defined in K.S.A. 75-3701, and amendments thereto.
(b) A fiduciary financial institution shall be deemed to be insolvent if
the:
(1) Actual cash market value of such fiduciary financial institution's
assets is insufficient to pay such fiduciary financial institution's creditor
liabilities; or
(2) fiduciary financial institution is unable to meet the demands of
such fiduciary financial institution's creditors in the usual and customary
manner.
(c) The provisions of this section shall be a part of and supplemental
to the technology-enabled fiduciary financial institutions act.
Sec. 2. K.S.A. 2025 Supp. 9-2301 is hereby amended to read as
follows: 9-2301. (a) The provisions of K.S.A. 9-2301 through 9-2327, and
amendments thereto, and section 1, and amendments thereto, shall be
known and may be cited as the technology-enabled fiduciary financial
institutions act. The technology-enabled fiduciary financial institutions act
shall be a part of and supplemental to chapter 9 of the Kansas Statutes
Annotated, and amendments thereto.
(b) For purposes of the technology-enabled fiduciary financial
institutions act:
(1) "Act" means the technology-enabled fiduciary financial
institutions act;
(2) "alternative asset" means professionally managed investment
assets that are not publicly traded, including, but not limited to, private
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HB 2418 2
equity, venture capital, leveraged buyouts, special situations, structured
credit, private debt, private real estate funds and natural resources,
including any economic or beneficial interest therein;
(3) "alternative asset custody account" means an account created by
the owner of an alternative asset that designates a fiduciary financial
institution as custodian or agent and into which the owner transfers,
electronically or otherwise, content, materials, data, information,
documents, reports and contracts in any form, including, without
limitation, evidence of ownership, subscription agreements, private
placement memoranda, limited partnership agreements, operating
agreements, financial statements, annual and quarterly reports, capital
account statements, tax statements, correspondence from the general
partner, manager or investment advisor of the alternative asset, an
investment contract as defined in K.S.A. 17-12a102(28)(E), and
amendments thereto, and any digital asset as defined in K.S.A. 58-4802,
and amendments thereto, whether such information is in hard copy form or
a representation of such information that is stored in a computer readable
format;
(4) "charitable beneficiaries" means one or more charities,
contributions to which are allowable as a deduction pursuant to section
170 of the federal internal revenue code that are designated as
beneficiaries of a fidfin trust;
(5) "custodial services" means the safekeeping and management of an
alternative asset custody account, including the execution of customer
instructions, serving as agent, fund administrative services and overall
decision-making and management of the account by a fiduciary financial
institution and . "Custodial services" shall be deemed to involve the
exercise of fiduciary and trust powers;
(6) "director" means a person designated as a member of the board of
directors pursuant to K.S.A. 9-2306, and amendments thereto;
(7) "economic growth zone" means an incorporated community with
a population of not more than 5,000 people located within one of the
following counties: Allen, Anderson, Barber, Bourbon, Brown, Chase,
Chautauqua, Cherokee, Cheyenne, Clark, Clay, Cloud, Coffey, Comanche,
Decatur, Doniphan, Edwards, Elk, Ellsworth, Gove, Graham, Grant, Gray,
Greeley, Greenwood, Hamilton, Harper, Harvey, Haskell, Hodgeman,
Jackson, Jewell, Kearny, Kingman, Kiowa, Labette, Lane, Lincoln, Linn,
Logan, Marion, Marshall, Meade, Mitchell, Montgomery, Morris, Morton,
Nemaha, Neosho, Ness, Norton, Osborne, Ottawa, Pawnee, Phillips, Pratt,
Rawlins, Republic, Rice, Rooks, Rush, Russell, Scott, Sheridan, Sherman,
Smith, Stafford, Stanton, Stevens, Sumner, Trego, Thomas, Wabaunsee,
Wallace, Washington, Wichita, Wilson or Woodson;
(8) "excluded fiduciary" means a fiduciary financial institution in its
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HB 2418 3
capacity as trustee of a fidfin trust, provided except that a fiduciary
financial institution shall only be deemed an "excluded fiduciary" to the
extent the fiduciary financial institution is excluded from exercising
certain powers under the instrument that may be exercised by the trust
advisor or other persons designated in the instrument;
(9) "fidfin," "fidfin services" or "fidfin transactions" means the
financing of a fidfin trust or the acquisition of alternative assets on behalf
of and through a fidfin trust, or both, as provided in K.S.A. 9-2311, and
amendments thereto, including loans, extensions of credit and direct
investments;
(10) "fidfin trust" means a trust created to facilitate the delivery of
fidfin services by a fiduciary financial institution;
(11) "fiduciary" means a trustee, a trust advisor or a custodian of an
alternative asset custody account appointed under an instrument that is
acting in a fiduciary capacity for any person, trust or estate;
(12) "instrument" means any document creating a fidfin trust or
alternative asset custody account;
(13) "officer" means a person who participates or has authority to
participate, other than in the capacity of a director, in major policymaking
functions of a bank, trust company or fiduciary financial institution,
whether or not the officer has an official title or if the officer is serving
without salary or other compensation. "Officer" includes the chairperson
of the board, president, vice president, cashier, secretary and treasurer of a
bank, trust company or fiduciary financial institution;
(14) "organizer" means a person who filed the fiduciary financial
institution formation documents;
(15) "out-of-state bank" means a national or state bank, savings and
loan association or savings bank not incorporated under the laws of
Kansas;
(16) "out-of-state financial institution" means an out-of-state bank or
an out-of-state trust company;
(17) "out-of-state trust company" means a national or state trust
company not incorporated under the laws of Kansas;
(18) (A) "qualified investment" means the purchase or development,
in the aggregate, of at least 10,000 square feet of commercial, industrial,
multiuse or multifamily real estate in the economic growth zone where the
fiduciary financial institution maintains its principal office pursuant to
K.S.A. 9-2309, and amendments thereto, provided that such community
has committed to develop the necessary infrastructure to support a
"qualified investment." A "qualified investment":
(i) May include, as part of satisfying the square footage requirements,
the suitable office space of such fiduciary financial institution, as provided
in K.S.A. 9-2309, and amendments thereto, if owned by the fiduciary
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HB 2418 4
financial institution;
(ii) shall be exempt from the provisions and limitations of K.S.A. 9-
1102, and amendments thereto;
(iii) may be retained by a fiduciary financial institution for as long as
the fiduciary financial institution operates in this state; and
(iv) may be sold, transferred or otherwise disposed of, including a
sale or transfer to an affiliate of the fiduciary financial institution, if the
fiduciary financial institution continues to maintain its principal office in
an economic growth zone pursuant to K.S.A. 9-2309, and amendments
thereto;
(B) notwithstanding the foregoing provisions, if a fiduciary financial
institution leases any portion of a qualified investment made by another
fiduciary financial institution as the lessee fiduciary financial institution's
suitable office space:
(i) The lessee fiduciary financial institution shall make, or cause to be
made, a qualified investment in an economic growth zone other than the
economic growth zone where such fiduciary financial institution maintains
its principal office;
(ii) the leased square footage shall count toward the square footage
requirement applicable to a qualified investment under this section, if such
lease has an initial term of not less than five years; and
(iii) the square footage requirement otherwise applicable to a
qualified investment of the lessee fiduciary financial institution shall be
reduced from 10,000 square feet to 5,000 square feet;
(19) "technology-enabled fiduciary financial institution" or "fiduciary
financial institution" means any limited liability company, limited
partnership or corporation that:
(A) Is organized to perform any one or more of the activities and
services authorized by this act;
(B) has been authorized to conduct business as a fiduciary financial
institution under this chapter pursuant to the provisions of K.S.A. 9-2302,
and amendments thereto;
(C) has made, committed to make or caused to be made a qualified
investment; and
(D) has committed, in or as a part of the application provided in
K.S.A. 9-2302, and amendments thereto, to conduct any fidfin transactions
in accordance with K.S.A. 9-2311, and amendments thereto, including the
distributions required therein;
(20) "trust" means a trust created pursuant to the Kansas uniform trust
code, K.S.A. 58a-101 et seq., and amendments thereto, or created pursuant
to the Kansas business trust act of 1961, K.S.A. 17-2707 et seq., and
amendments thereto;
(21) "trust advisor" means a fiduciary granted authority by an
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instrument to exercise, consent, direct, including the power to direct as
provided in K.S.A. 58a-808, and amendments thereto, or approve all or
any portion of the powers and discretion conferred upon the trustee of a
fidfin trust, including the power to invest the assets of a fidfin trust or
make or cause distributions to be made from such fidfin trust; and
(22) the definitions of K.S.A. 9-701, and amendments thereto, apply
to fiduciary financial institutions except as otherwise provided in this act.
Sec. 3. K.S.A. 2025 Supp. 9-2301 is hereby repealed.
Sec. 4. This act shall take effect and be in force from and after its
publication in the statute book.
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