Division of the Budget
Landon State Office Building Phone: (785) 296-2436
900 SW Jackson Street, Room 504 adam.c.proffitt@ks.gov
Topeka, KS 66612 Division of the Budget http://budget.kansas.gov
Adam Proffitt, Director Laura Kelly, Governor


March 22, 2021


The Honorable Jeff Longbine, Chairperson
Senate Committee on Financial Institutions
Statehouse, Room 235A-E
Topeka, Kansas 66612
Dear Senator Longbine:
SUBJECT: Fiscal Note for SB 288 by Senate Committee on Ways and Means
In accordance with KSA 75-3715a, the following fiscal note concerning SB 288 is
respectfully submitted to your committee.
SB 288 would enact the Technology-Enabled Trust Bank Act. The bill details the function
of a trust bank. Each trust bank would be required to have a certificate of authority approved by
the State Banking Board. The bill details requirements of the application, including fingerprints
of any officer, director, organizer, or other person deemed necessary by the Board. SB 288 details
when the Board would not accept an application, deny an application, and notify an applicant of
approval or disapproval of the application. A trust bank would be issued a charter upon compliance
with of the requirements of the Act and upon satisfaction of the Bank Commissioner that the
applicable distribution has been made. The bill details how the applicable distribution would be
disbursed. The bill would require a trust bank to be managed and controlled by a board of directors.
Each trust bank would be assessed an initial fee of $500,000 and an annual assessment that
is defined in the bill. Of the fees and assessments received, 75.0 percent would be deposited to
the Bank Commissioner Fee Fund and 25.0 percent to the Technology-Enabled Trust Bank
Development and Expansion Fund that is established in the bill. The Technology-Enabled Trust
Bank Development and Expansion Fund would be administered by the Secretary of Commerce.
The Fund would be used to promote and facilitate the development, growth, and expansion of trust
banks, fidfin activities, and custodial services in the state and to locate trust banks’ office space in
an economic growth zone.
The bill would require a trust bank applying for approval from the State Banking Board to
conduct fidfin transactions to consult with the Department of Commerce regarding economic
growth zones in which the trust bank plans to make either a qualified investment or a financial
The Honorable Jeff Longbine, Chairperson
Page 2—SB 288

transaction structured as a qualified charitable contribution. The Department of Commerce would
also be required to publish fund investment schedules in the Kansas Register for trust banks
chartered after January 1, 2023, as well as submit reports to the State Bank Commissioner
regarding the publication of such reports.
The bill would require a trust bank to be managed and controlled by a board of directors
and to file annual reports with the Commissioner that include information regarding fidfin
transactions and capital solvency. The bill would create a tax credit for trust banks that would be
allowed as a credit against its liabilities starting on December 31, 2020.

Estimated State Fiscal Effect
FY 2021 FY 2021 FY 2022 FY 2022
SGF All Funds SGF All Funds
Revenue -- -- -- $1,125,000
Expenditure -- -- $195,964 $195,964
FTE Pos. -- -- -- 1.00
The Office of the State Bank Commissioner indicates that one technology-enabled trust
bank will be chartered and examined in FY 2022 and would be subject to the fees outlined in the
bill. The Office estimates that in FY 2022 it would receive $1,125,000 into its Bank Commissioner
Fee Fund. Of that amount $375,000 ($500,000 x 75.0 percent) would be from one initial fee and
$750,00 ($1,000,000 x 75.0 percent) would be from an annual examination fee. Any additional
expenditures to create new forms, develop an application process, investigate, train, or perform
annual exams would be paid with the additional revenues received from enactment of the bill.
However, the agency does not have any data to estimate such expenditures at this time.
The Department of Revenue indicates SB 288 would decrease State General Fund revenues
beginning in FY 2022 by an unknown amount. The Department of Revenue does not have data
on technology-enabled trust banks to make a precise estimate of the fiscal effect of providing an
income and privilege tax credit for trust banks making certain charitable donations. The
Department of Revenue indicates that it would require a total $105,664 from the State General
Fund in FY 2022 to implement the bill and to modify the automated tax system. The required
programming for this bill by itself would be performed by existing staff of the Department of
Revenue. In addition, if the combined effect of implementing this bill and other enacted legislation
exceeds the Department’s programming resources, or if the time for implementing the changes is
too short, additional expenditures for outside contract programmer services beyond the
Department’s current budget may be required.
The Kansas Bureau of Investigation states that the bill would create additional state and
national criminal history record check requests. Any additional expenditures created by the bill
would be offset by revenues received to perform the checks by staff and maintenance on required
systems.
The Honorable Jeff Longbine, Chairperson
Page 3—SB 288

The Department of Commerce states that it would require $90,300 in FY 2022 from the
State General Fund and $85,300 in FY 2023 from the Technology-Enabled Trust Bank
Development and Expansion Fund to staff and manage the new fund. Of that amount for FY 2022,
$74,250 would be for 1.00 FTE position, $6,050 would be for overhead expenditures, and $10,000
would be for travel expenditures. For FY 2023, $74,250 would be for 1.00 FTE position, $6,050
would be for overhead expenditures, and $5,000 would be for travel expenditures. The agency
states that it would require an appropriation from the State General Fund to finance its expenditures
until there is enough funding in the Technology-Enabled Trust Bank Development and Expansion
Fund to support expenditures. Any fiscal effect associated with SB 288 is not reflected in The FY
2022 Governor’s Budget Report.
The Kansas Association of Counties states that the bill could impact Harvey county since
they will be the first economic growth zone. If additional businesses are drawn to Kansas as a
result of the bill, then there could be a fiscal effect on those counties as well. However, a fiscal
effect cannot be estimated. The League of Kansas Municipalities states that the bill would not
have a fiscal effect on cities.


Sincerely,

Adam Proffitt
Director of the Budget

cc: Lynn Robinson, Department of Revenue
Paul Weisgerber, KBI
Jay Hall, Association of Counties
Melissa Wangemann, Office of Banking Commissioner
Wendi Stark, League of Municipalities
Sherry Rentfro, Department of Commerce