SESSION OF 2023
SUPPLEMENTAL NOTE ON SENATE BILL NO. 204
As Amended by Senate Committee on Financial
Institutions and Insurance

Brief*
SB 204, as amended, would would modify definitions
specified in the Technology-enabled Fiduciary Financial
Institutions Act (TEFFI Act) to reference the term “qualified
charities” and make changes in the corresponding tax statute
applicable to the tax liability of a fiduciary financial institution
and its qualified charitable distributions.

TEFFI Act Definitions
The bill would remove the term “charitable beneficiaries”
from the Act (this term is not referenced elsewhere) and add
a definition for the term “qualified charities” and assign the
term its meaning in the statute providing for the income tax
credit against Fiduciary Financial Institution tax liability.

Income Tax Credit for Fiduciary Financial Institutions;
Qualified Charities
The bill would expand the definition of the term “qualified
charities” within the income tax credit against Fiduciary
Financial Institution tax liability to add certain nonprofit
corporations and specify these charities would either be:
● Charities in which contributions are allowable as a
deduction pursuant to section 170 of the federal
Internal Revenue Code; or
____________________
*Supplemental notes are prepared by the Legislative Research
Department and do not express legislative intent. The supplemental
note and fiscal note for this bill may be accessed on the Internet at
http://www.kslegislature.org
 ● One of more Kansas nonprofit corporations,
regardless of their federal income tax treatment.
Under current law, qualified charities are subject to
specified criteria including: organization for the purpose of
making distributions for the benefit of economic growth zones
and a commitment to use the entire amount of qualified
charitable distributions, excluding reasonable administrative
expenses, for the benefit of charitable causes located in one
or more of the economic growth zones or postsecondary
educational institutions.

Background
The bill was introduced by the Joint Committee on
Fiduciary Financial Institutions. [Note: The Joint Committee
met in December 2022, and among topics discussed, the
Committee considered a request from the Beneficient
Company Group, LP, to expand the definition of “charitable
beneficiaries” within the TEFFI Act regarding an income tax
credit for certain qualified charitable distribution of fiduciary
financial institutions. The Joint Committee recommended the
introduction of this legislation.]

Senate Committee on Financial Institutions and
Insurance
In the Senate Committee hearing, a representative of
the Beneficient Company Group, LP, provided proponent
testimony, stating the bill would make significant contributions
to the economic growth zone program created under the
TEFFI Act by expanding the categories of charitable
participants while maintaining appropriate financial reporting
and regulatory oversight.
No other testimony was submitted.


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 The Senate Committee amended the bill to include and
update statutory language regarding fiduciary financial
institutions and credit for qualified charitable distributions. The
amendment was provided by the Committee Revisor (the bill,
as amended by Senate Committee, reflects the intent of the
Joint Committee’s request for bill introduction).

Fiscal Information
According to the fiscal note prepared by the Division of
the Budget on the bill, as introduced, the Office of the State
Bank Commissioner indicates the bill would not have a fiscal
effect. [Note: A fiscal note was not immediately available on
the bill, as amended by the Senate Committee.]
Fiduciary financial institutions; TEFFI Act; qualified charities; income and privilege tax
credit


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Statutes affected:
As introduced: 9-2301, 9-701
As Amended by Senate Committee: 9-2301, 79-32, 9-701