SENATE BILL No. 139
AN ACT concerning banks and trust companies; relating to the state banking code;
updating certain definitions, terms and conditions therein; specifying that certain
hearings be held in accordance with the Kansas administrative procedure act;
updating certain internal references; requiring immediate notification of changes in
board members; specifying that the charter of certain banks be deemed void on the
effective date of a merger; establishing conditions under which it would be lawful to
engage in banking without first obtaining authority from the commissioner;
amending K.S.A. 9-519, 9-1111, 9-1114, 9-1724, 9-1807, 9-2011, 9-2108 and 9-2111
and K.S.A. 2024 Supp. 9-2107 and repealing the existing sections; also repealing
K.S.A. 9-2101 and 16-842.
Be it enacted by the Legislature of the State of Kansas:
Section 1. K.S.A. 9-519 is hereby amended to read as follows: 9-
519. For the purposes of K.S.A. 9-520 through 9-524, and amendments
thereto, and K.S.A. 9-532 through 9-541, and amendments thereto,
unless otherwise required by the context:
(a) "Bank" means an insured bank as defined in 12 U.S.C. §
1813(h) except the term shall. "Bank" does not include a national bank
that:
(1) Engages only in credit card operations;
(2) does not accept demand deposits or deposits that the depositor
may withdraw by check or similar means for payment to third parties or
others;
(3) does not accept any savings or time deposits of less than
$100,000;
(4) maintains only one office that accepts deposits; and
(5) does not engage in the business of making commercial loans.
(b) (1) "Bank holding company" means any company that:
(A) Directly or indirectly owns, controls, or has power to vote
25% or more of any class of the voting shares of a bank or 25% or
more of any class of the voting shares of a company that is or becomes
a bank holding company by virtue of this act;
(B) controls in any manner the election of a majority of the
directors of a bank or of a company that is or becomes a bank holding
company by virtue of this act;
(C) the commissioner determines, after notice and opportunity for
a hearing to be conducted in accordance with the Kansas
administrative procedure act, directly or indirectly exercises a
controlling influence over the management or policies of the bank or
company.
(2) Notwithstanding paragraph (1), no company:
(A) Shall be deemed to be a bank holding company by virtue of
the company's ownership or control of shares acquired by the company
in connection with such company's underwriting of securities if such
shares are held only for such period of time as will permit the sale
thereof on a reasonable basis;
(B) formed for the sole purpose of participating in a proxy
solicitation shall be deemed to be a bank holding company by virtue of
the company's control of voting rights of shares acquired in the course
of such solicitation;
(C) shall be deemed to be a bank holding company by virtue of the
company's ownership or control of shares acquired in securing or
collecting a debt previously contracted in good faith, provided such
shares are disposed of within a period of two years from the date on
which such shares could have been disposed of by such company; or
(D) owning or controlling voting shares of a bank shall be deemed
to be a bank holding company by virtue of the company's ownership or
control of shares held in a fiduciary capacity except where such shares
are held for the benefit of such company or the company's shareholders.
(c) "Company" means any corporation, limited liability company,
trust, partnership, association or similar organization, including a bank, SENATE BILL No. 139—page 2
but shall does not include any corporation, the majority of the shares of
which are owned by the United States or by any state, or include any
individual, partnership or qualified family partnership upon the
determination by the commissioner that a general or limited partnership
qualifies under the definition in 12 U.S.C. § 1841(o)(10).
(d) "Foreign bank" means any company organized under the laws
of a foreign country, a territory of the United States, Puerto Rico,
Guam, American Samoa or the Virgin Islands or any subsidiary or
affiliate organized under such laws, which that engages in the business
of banking.
(e) "Kansas bank" means any bank, as defined by subsection (a),
that, in the case of a state chartered bank, is a bank chartered under the
authority of the state of Kansas, and, in the case of a national banking
association, a bank with its charter location in Kansas.
(f) "Kansas bank holding company" means a bank holding
company, as defined by subsection (b), with total subsidiary bank
deposits in Kansas that exceed the bank holding company's subsidiary
bank deposits in any other state.
(g) "Out-of-state bank holding company" means any holding
company that is not a Kansas bank holding company as defined in
subsection (f).
(h) "Subsidiary" means, with respect to a specified bank holding
company:
(1) Any company with more than 5% of the voting shares,
excluding shares owned by the United States or by any company
wholly owned by the United States, that are directly or indirectly
owned or controlled by, or held with power to vote, such bank holding
company; or
(2) any company, the election of a majority of the directors of
which, is controlled in any manner by such bank holding company.
Sec. 2. K.S.A. 9-1111 is hereby amended to read as follows: 9-
1111. (a) (1) The general business of every bank shall be transacted at
the place of business specified in the bank's certificate of authority and
at one or more branch banks established and operated as provided in
this section. It shall be unlawful for any bank to establish and operate
any branch bank or relocate an existing branch bank except as
hereinafter provided. Notwithstanding the provisions of this section,
any location at which where a depository institution, as defined by
K.S.A. 9-701, and amendments thereto, receives deposits, renews time
deposits, closes loans, services loans or receives payments on loans or
other obligations, as agent, for a bank pursuant to K.S.A. 9-1101(a)
(25), and amendments thereto, or other applicable state or federal law,
or is authorized to open accounts or receive deposits under K.S.A. 9-
1101(a)(28), and amendments thereto, shall not be deemed to be a
branch bank:.
(a)(2) For the purposes of this section, the term "branch bank"
means any office, agency or other place of business located within this
state, other than the place of business specified in the bank's certificate
of authority, at which where deposits are received, checks paid, money
lent or trust authority exercised, if approval has been granted by the
commissioner pursuant to K.S.A. 9-1602 9-1601, and amendments
thereto;.
(b) establishment ofTo establish a new branch bank or relocation
of relocate an existing branch bank:
(1) After first applying for and obtaining the approval of the
commissioner, A bank incorporated under the laws of this state may
establish and operate one or more branch banks or relocate an existing
branch bank, anywhere within this state after first applying for and
obtaining the commissioner's approval; SENATE BILL No. 139—page 3
(2) the application shall include the nature of the banking business
to be conducted at the proposed branch bank, the primary geographical
area to be served by the proposed branch bank, the personnel and office
facilities to be provided at the proposed branch bank and other
information the commissioner may require;
(3) the application shall include the name selected for the
proposed branch bank. The name selected for the proposed branch bank
shall not be the name of any other bank or branch bank:
(A) Doing business in the same city or town; or
(B) within a 15-mile radius of the proposed location, nor shall the
name selected be required to contain the name of the applicant bank. If
the name selected for the proposed branch bank does not contain the
name of the applicant bank, the branch bank shall provide in the public
lobby of such branch bank, a public notice that it is a branch bank of
the applicant bank. Any bank may request exemption from the
commissioner from the provisions of this paragraph;
(4) the application shall include proof of publication of notice that
the applicant bank intends to file or has filed an application to establish
a branch bank or relocate an existing branch bank. The notice shall be
published in a newspaper of general circulation in the county where the
applicant bank proposes to locate the branch bank. The notice shall be
in the form prescribed by the commissioner and, at a minimum, shall
contain the name and address of the applicant bank, the location of the
proposed branch and a solicitation for written comments. The notice
shall be published on the same day for two consecutive weeks and
provide for a comment period of not less than 10 days after the date of
the second publication;
(5) upon receipt of the application, and following expiration of the
comment period, the commissioner may hold a hearing in the county in
which where the applicant bank seeks to operate the branch bank. The
applicant shall publish notice of the time, date and place of such
hearing in a newspaper of general circulation in the county where the
applicant bank proposes to locate the branch bank, within not less than
10, nor more than 30, days prior to the date of the hearing, and proof of
publication shall be filed with the commissioner. At any such hearing,
all interested persons shall be allowed to present written and oral
evidence to the commissioner, or the commissioner's designee, in
support of or in opposition to the branch bank. Upon completion of a
transcript of the testimony given at any such hearing, the transcript
shall be filed in the office of the commissioner;
(6) if the commissioner determines a public hearing is not
warranted, the commissioner shall approve or disapprove the
application within 15 days after receipt of a complete application, but
not prior to the end of the comment period. If a public hearing is held,
the commissioner shall approve or disapprove the application within 60
days after consideration of the complete application and the evidence
gathered during the commissioner's investigation. The period for
consideration of the application may be extended if the commissioner
determines that the application presents a significant supervisory
concern. The new branch or relocation shall only be granted if the
commissioner finds that:
(A) There is a reasonable probability of usefulness and success of
the proposed branch bank; and
(B) the applicant bank's financial history and condition is sound;
(7) within 15 days after any final action of the commissioner
approving or disapproving an application, the applicant, or any
adversely affected or aggrieved person that provided written comments
during the specified comment period, may request a hearing with the
state banking board. Upon receipt of a timely request, the state banking SENATE BILL No. 139—page 4
board shall conduct a hearing in accordance with the provisions of the
Kansas administrative procedure act. Any decision of the state banking
board is subject to review in accordance with the Kansas judicial
review act;.
(c) Upon the request of any bank proposing to relocate an existing
branch less than one mile from the existing location, the commissioner
may exempt such bank from the requirements of this section;.
(d) Any branch bank lawfully established and operating on the
effective date of this act may continue to be operated by the bank then
operating the branch bank and by any successor bank;.
(e) Any bank location which that has been established and is being
maintained by a bank at the time of the bank's merger into or
consolidation with another bank or at the time the bank's assets are
purchased and the bank's liabilities are assumed by another bank may
continue to be operated by the surviving, resulting or purchasing and
assuming bank;.
(f) Any state bank or national banking association may provide
and engage in banking transactions by means of remote service units
wherever located, which. Remote service units shall not be considered
to be branch banks. Any banking transaction effected affected by use of
a remote service unit shall be deemed to be transacted at a bank and not
at a remote service unit;.
(g) As a condition to the operation and use of any remote service
unit in this state, a state bank or national banking association, each
hereinafter referred to as a bank, which that desires to operate or enable
its customers to utilize a remote service unit must shall agree that such
remote service unit will be available for use by customers of any other
bank or banks upon the request of such bank or banks to share the use
of the remote service unit and the agreement of such bank or banks to
share all costs, including a reasonable return on capital expenditures
incurred in connection with the remote service unit's development,
installation and operation. The owner of the remote service unit,
whether a bank or any other person, shall make the remote service unit
available for use by other banks and their customers on a
nondiscriminatory basis, conditioned upon payment of a reasonable
proportion of all costs, including a reasonable return on capital
expenditures incurred in connection with the development, installation
and operation of the remote service unit. Notwithstanding the foregoing
provisions of this subsection, a remote service unit located on the
property owned or leased by the bank where the principal place of
business of a bank, or branch bank of a bank, is located need not be
made available for use by any other bank or banks or customers of any
other bank or banks;.
(h) For purposes of this section, "remote service unit" means an
electronic information processing device, including associated
equipment, structures and systems, through or by means of which
information relating to financial services rendered to the public is
stored and transmitted to a bank and which that, for activation and
account access, is dependent upon the use of a machine-readable
instrument in the possession and control of the holder of an account
with a bank or is activated by a person upon verifiable personal
identification. The term shall include "Remote service unit" includes
"online" computer terminals which that may be equipped with a
telephone or televideo device that allows contact with bank personnel
and "offline" automated cash dispensing machines and automated teller
machines. Withdrawals by means of "offline" systems shall not exceed
$300 per transaction and shall be restricted to individual, not corporate
or commercial, accounts;.
(i) Upon providing notice to the commissioner, any state bank SENATE BILL No. 139—page 5
may conduct loan production activity at locations other than the place
of business specified in the bank's certificate of authority or approved
branch banks.
(1) Loan production activity shall consist of the following:
(A) Soliciting, assembling or processing of credit information and
loan applications;
(B) approval of loan applications; or
(C) loan closing activities, such as the execution of promissory
notes and deeds of trust.
(2) No customer shall be allowed to take actual receipt of the loan
funds;.
(j) Upon providing notice to the commissioner, any state bank
may conduct deposit production activity at locations other than the
place of business specified in the bank's certificate of authority or
approved branch banks provided there is no acceptance of actual
deposits in person or by drop box;.
(k) Upon providing notice to the commissioner, any state bank
may provide any of the following at a location other than the place of
business specified in the bank's certificate of authority without
becoming a branch bank:
(1) Operate safe deposit boxes;
(2) sell travelers checks and saving bonds; and
(3) operate check cashing check-cashing services so long as if no
actual account withdrawal occurs;
(l) any bank or trust company closing a branch bank, loan
production office, deposit production office or other location shall
provide notice to the commissioner.
Sec. 3. K.S.A. 9-1114 is hereby amended to read as follows: 9-
1114. (a) The business of any bank or trust company shall be managed
and controlled by such bank's or trust company's board of directors.
(b) The board shall consist of not less fewer than five nor more
than 25 members who shall be elected by the stockholders at any
regular annual meeting which that shall be held on the date specified in
the bank's or trust company's bylaws. A majority of the directors shall
be residents of this state. Minutes shall be made of each stockholders'
meeting of a bank or trust company. The minutes shall show any action
taken by the stockholders, including the election of all directors.
(c) If, for any reason, the meeting cannot be held on the date
specified in the bylaws, the meeting shall be held on a subsequent day
within 60 days of the day fixed, to be designated by the board of
directors, or, if the directors fail to fix the day, by the shareholders
representing
2
/3 of the shares.
(d) In all cases, at least 10 days' notice of the date for the annual
meeting shall have been be given by first-class mail to the shareholders.
(e) Any newly created directorship must shall be approved and
elected by the shareholders in the manner provided in the general
corporation code. A special meeting of the shareholders may be
convened at any time for such purpose.
(f) Any vacancy in the board of directors may be filled by the
board of directors in the manner provided in the general corporation
code.
(g) Any director of any bank or trust company who shall become
becomes indebted to such bank or trust company on any judgment or
whose indebtedness is charged off or forgiven shall forfeit such
person's position as director.
(h) Within 15 days after the annual meeting, the president or
cashier of every bank and every trust company shall submit to the
commissioner a certified list of stockholders and the number of shares
owned by each. This list of stockholders shall be kept and maintained SENATE BILL No. 139—page 6
in the bank's or trust company's main office and shall be subject to
inspection by all stockholders during the business hours of the bank or
trust company. The commissioner may require the list to be filed using
an electronic means.
(i) Each director shall take and subscribe an oath to administer the
affairs of such bank or trust company diligently and honestly and to not
knowingly or willfully permit any of the laws relating to banks or trust
companies to be violated. A copy of each oath shall be retained by the
bank or trust company in the bank's or trust company's records after the
election of any officer or director, for review by the commissioner's
staff during the next examination. Each bank and trust company shall
file an oath with the commissioner within 15 days of the election of any
officer or director. The commissioner may require the oath to be filed
using an electronic means.
(j) EveryEach bank and trust company shall notify the
commissioner of any change in the newly appointed chief executive
officer, president or directors prior to the commencement of any such
individual's duties, including in such bank's or trust company's report a
statement of the past and current business and professional affiliations
of the new chief executive officer, president or directors. Each bank
and trust company shall notify the commissioner of any chief executive
officer, president or director that is voluntarily or involuntarily relieved
from the position duties within five business days.
Sec. 4. K.S.A. 9-1724 is hereby amended to read as follows: 9-
1724. (a) The provisions of K.S.A. 9-1720 through 9-1724, and
amendments thereto, shall not apply to the merger transaction of a bank
or trust company when the surviving entity is a national banking
association or other state or federally chartered financial institution or a
trust company, except that the bank or trust company shall provide
written notification to the commissioner of such a merger,
consolidation or transfer of assets and liabilities at least 10 days prior to
the consummation of any such transaction.
(b) Any bank or trust company that will cease to exist following
the consummation of any approved merger transaction shall have its
charter deemed void on the next business day immediately following
the merger consummation date. Not more than 15 days following any
merger transaction, any bank or trust company that will cease to exist
shall surrender such bank's or trust company's state certificate of
authority or charter and shall certify in writing that the proper
instruments have been executed and filed in accordance with K.S.A.
17-6003, and amendments thereto.
(c) Notice of the merger transaction shall be published twice in a
newspaper of general circulation in each city or county in which where
the bank or trust company is located, or the newspaper nearest such city
or county, and a certified copy of each notice shall be filed with the
commissioner. The first publication shall be no not later than five days
after an application is filed. The second publication shall be on the 14
th
day after the date of the first publication or, if the newspaper does not
publish on the 14
th
day, then the date that is the closest to the 14
th
day.
The notice shall be in the form prescribed by the commissioner and
shall provide for a comment period of not less than 10 days after the
date of the second publication.
Sec. 5. K.S.A. 9-1807 is hereby amended to read as follows: 9-
1807. (a) If the commissioner finds that any bank or trust company is
engaging, has engaged or is about to engage in an unsafe or unsound
practice or if the commissioner finds that any bank or trust company is
violating, has violated or is about to violate a law, rule and regulation or
order of the commissioner or state banking board, the commissioner
may issue and serve upon the bank or trust company a notice of SENATE BILL No. 139—page 7
charges. The notice of charges shall contain a statement of the facts that
forms the basis for a proposed cease and desist order and shall state the
time and place at which that a hearing will be held by the state banking
board to determine whether an order to cease and desist therefrom
should be issued by the state banking board against the bank or trust
company. Such hearing shall be fixed for a date not earlier than 30 days
nor later than 60 days after service of such notice and shall be held in
accordance with the Kansas administrative procedure act.
(b) Unless the bank or trust company shall appear appears at the
hearing, such bank or trust company shall be deemed to have consented
to the issuance of the cease and desist order. In the event of such
consent, or if, upon the record made at any such hearing, the state
banking board shall find finds that any unsafe or unsound practice or
violation specified in the notice of charges has been established, the
state banking board may issue and serve upon the bank or trust
company an order to cease and desist from any such practice or
violation. Such order may require the bank or trust company and such
bank's or trust company's directors, officers, employees or agents to
cease and desist or to take affirmative action to correct the conditions
resulting from any such practice or violation. A cease and desist order
shall become effective at the time specified therein and shall remain
effective and enforceable as provided therein, except to such extent as
it is stayed, modified or terminated by the state banking board.
(c) Whenever the commissioner finds that a bank's or trust
company's unsafe or unsound practice or violation, or the continuation
thereof, is likely to cause insolvency, substantial dissipation of assets or
earnings or is likely to otherwise seriously prejudice the interests of the
bank's depositors or trust company's clients, the commissioner may
issue a temporary order requiring the bank or trust company to cease
and desist from any such practice or violation. The order shall contain a
notice of charges with a statement of the facts that forms the basis for a
proposed temporary cease and desist order. Such order shall be
effective upon service on the bank or trust company and shall remain
effective and enforceable pending the completion of the proceedings
pursuant to such notice and until such time as the state banking board
shall dismiss dismisses the charges specified in such notice, or, if a
cease and desist order is issued against the bank or trust company, until
the effective date of any such order.
Sec. 6. K.S.A. 9-2011 is hereby amended to read as follows: 9-
2011. (a) It shall be unlawful for any individual, firm or corporation to
advertise, publish or otherwise promulgate that the such individual,
firm or corporation is engaged in the banking business or trust business
without first having obtained authority from the commissioner, unless
its deposits are federally insured and either chartered in Kansas,
another state or the federal government.
(b) It shall be unlawful for any individual, firm or corporation to
advertise, publish or otherwise communicate that such individual, firm
or corporation is engaged in the trust business without first having
obtained authority from the commissioner, unless the entity is a
federally insured bank or credit union and has authorization from
another state or the federal government to engage in trust business in
Kansas.
(c) Any such individual or member of any such firm or officer of
any such corporation violating this section, upon conviction, shall be
guilty of a class A, nonperson misdemeanor.
Sec. 7. K.S.A. 2024 Supp. 9-2107 is hereby amended to read as
follows: 9-2107. (a) As used in this section:
(1) "Contracting trustee" means any trust company, as defined in
K.S.A. 9-701, and amendments thereto, any bank that has been granted SENATE BILL No. 139—page 8
trust authority by the commissioner under K.S.A. 9-1602 9-1601, and
amendments thereto, any national bank chartered to do business in
Kansas that has been granted trust authority by the comptroller of the
currency under 12 U.S.C. § 92a, any bank that has been granted trust
authority or any trust company, regardless of where such bank or trust
company is located, that is controlled, as defined in K.S.A. 9-1612, and
amendments thereto, by the same bank holding company as any trust
company, state bank or national bank chartered to do business in
Kansas, which that accepts or succeeds to any fiduciary responsibility
as provided in this section;
(2) "originating trustee" means any trust company, bank, national
banking association, savings and loan association or savings bank that
has trust powers and places or transfers any fiduciary responsibility to a
contracting trustee as provided in this section; and
(3) "financial institution" means any bank, national banking
association, savings and loan association or savings bank that has its
principal place of business in this state but that does not have trust
powers.
(b) Any contracting trustee and any originating trustee may enter
into an agreement by which the contracting trustee, without any further
authorization of any kind, succeeds to and is substituted for the
originating trustee as to all fiduciary powers, rights, duties, privileges
and liabilities with respect to all accounts for which that the originating
trustee serves in any fiduciary capacity, except as may be provided
otherwise in the agreement. Notwithstanding the provisions of this
section, either the contracting trustee or the originating trustee shall
have its principal place of business in this state.
(c) Unless the agreement expressly provides otherwise, upon the
effective date of the substitution:
(1) The contracting trustee shall be deemed to be named as the
fiduciary in all writings, including, without limitation, trust agreements,
wills and court orders, which that pertain to the affected fiduciary
accounts; and
(2) the originating trustee is absolved from all fiduciary duties and
obligations arising under from such writings and shall discontinue the
exercise of any fiduciary duties with respect to such writings, except
that the originating trustee is not absolved or discharged from any duty
to account required by K.S.A. 59-1709, and amendments thereto, or
any other applicable statute, rule of law, rules and regulations or court
order, nor shall the originating trustee be absolved from any breach of
fiduciary duty or obligation occurring prior to the effective date of the
agreement.
(d) The agreement may authorize the contracting trustee:
(1) To establish a trust service desk at any office of the originating
trustee at which the contracting trustee may conduct any trust business
and any business incidental thereto and which the contracting trustee
may otherwise conduct at its principal place of business; and
(2) to engage the originating trustee as the agent of the contracting
trustee, on a disclosed basis to customers, for the purposes of providing
administrative, advertising and safekeeping services incident to the
fiduciary services provided by the contracting trustee.
(e) Any contracting trustee may enter into an agreement with a
financial institution providing that the contracting trustee may establish
a trust service desk as authorized by subsection (d) in the offices of
such financial institution and which provides that such financial
institution, on a disclosed basis to customers, may act as the agent of
contracting trustee for purposes of providing administrative services
and advertising incident to the fiduciary services to be performed by the
contracting trustee. SENATE BILL No. 139—page 9
(f) No activity authorized by subsections (b) through (e) shall be
conducted by any contracting trustee, originating trustee or financial
institution until an application for such authority has been submitted to
and approved by the commissioner. The application shall be in the form
and contain the information required by the commissioner, which and
shall, at a minimum, include certified copies of the following
documents:
(1) The agreement;
(2) the written action taken by the board of directors of the
originating trustee or financial institution approving the agreement;
(3) all other required regulatory approvals; and
(4) proof of publication of notice that the applicant intends to file
or has filed an application pursuant to this section. The notice shall be
published in a newspaper of general circulation in the county where the
principal office of the originating trustee or financial institution is
located. The notice shall be in the form prescribed by the commissioner
and shall contain the name of the applicant contracting trustee and the
originating trustee, and a solicitation for written comments. The notice
shall be published on the same day for two consecutive weeks and
provide for a comment period of not less than 10 days after the date of
the second publication; and
(5)(3) a certification by the parties to the agreement that written
notice of the proposed substitution was sent by first-class mail to each
co-fiduciary, each surviving settlor of a trust, each ward of a
guardianship, each person that has sole or shared power to remove the
originating trustee as fiduciary and each adult beneficiary currently
receiving or entitled to receive a distribution of principle or income
from a fiduciary account affected by the agreement, and that such
notice was sent to each such person's address as shown in the
originating trustee's records. An unintentional failure to give such
notice shall not impair the validity or effect of any such agreement,
except that an intentional failure to give such notice shall render the
agreement null and void as to the party not receiving the notice of
substitution.
(g) If the originating trustee or financial institution is transferring
more than 50% of the financial institution's total fiduciary accounts,
the commissioner shall require the following certified copies in
addition to the requirements described in subsection (f):
(1) The written action taken by the board of directors of the
originating trustee or financial institution approving the agreement;
and
(2) proof of publication of notice that the applicant intends to file
or has filed an application pursuant to this section. The notice shall be
published in a newspaper of general circulation in the county where
the principal office of the originating trustee or financial institution is
located. The notice shall be in the form prescribed by the commissioner
and shall contain the name of the applicant contracting trustee and the
originating trustee and a solicitation for written comments. The notice
shall be published on the same day and every day thereafter for two
consecutive weeks and provide for a comment period of not less than
10 days after the date of the second publication.
(h) A contracting trustee making application to the commissioner
for approval of any agreement pursuant to this section shall pay to the
commissioner a fee, in an amount established pursuant to K.S.A. 9-
1726, and amendments thereto, to defray the expenses of the
commissioner in the examination and investigation of the application.
The commissioner shall remit all moneys received under this section to
the state treasurer in accordance with the provisions of K.S.A. 75-4215,
and amendments thereto. Upon receipt of each such remittance, the SENATE BILL No. 139—page 10
state treasurer shall deposit the entire amount in the state treasury to the
credit of the bank investigation fund. The moneys in the bank
investigation fund shall be used to pay the expenses of the
commissioner, or designee, in the examination and investigation of
such applications and any unused balance shall be transferred to the
bank commissioner fee fund.
(h)(i) Upon the filing of a complete application with the
commissioner, the commissioner shall make or cause to be made, a
careful examination and investigation of the proposed agreement. If the
commissioner finds any of the following matters unfavorably, the
commissioner may deny the application:
(1) The reasonable probability of usefulness and success of the
contracting trustee; and
(2) the financial history and condition of the contracting trustee
including the character, qualifications and experience of the officers
employed by the contracting trustee.
(i)(j) The commissioner shall render approval or disapproval of
the application within 90 days of receiving a complete application.
(j)(k) Upon service of an order denying an application, the
applicant shall have the right to a hearing to be conducted in
accordance with the Kansas administrative procedure act before the
state banking board. Any final order of the commissioner pursuant to
this section is subject to review in accordance with the Kansas judicial
review act.
(k)(l) When the commissioner determines that any contracting
trustee domiciled in this state has entered into a contracting agreement
in violation of the laws governing the operation of such contracting
trustee, the commissioner may take such action as available under
K.S.A. 9-1714, 9-1805, 9-1807 or 9-1809, and amendments thereto, to
remedy such violation.
(l)(m) Any party entitled to receive a notice under subsection (f)
(5)(3) may file a petition in the court having jurisdiction over the
fiduciary relationship, or if none, in the district court in the county
where the originating trustee has its principal office, seeking to remove
any contracting trustee substituted or about to be substituted as
fiduciary pursuant to this section. Unless the contracting trustee files a
written consent to its removal or a written declination to act subsequent
to the filing of the petition, the court, upon notice and hearing, shall
determine the best interest of the petitioner and all other parties
concerned and shall fashion such relief as the court deems appropriate
in the circumstances, including the awarding of reasonable attorney
fees. The right to file a petition under this subsection shall be in
addition to any other rights to remove the fiduciary provided by any
other statute or regulation or by the writing creating the fiduciary
relationship. If the removal of the fiduciary is prompted solely as a
result of the contracting agreement, any reasonable cost associated with
such removal and transfer shall be paid by the originating trustee or
financial institution entering into the agreement.
Sec. 8. K.S.A. 9-2108 is hereby amended to read as follows: 9-
2108. It is unlawful for any trust company to establish or operate a trust
service office or relocate an existing trust service office except as
provided herein.
(a) As used in this section: "Trust service office" means any office,
agency or other place of business located within this state, other than
the place of business specified in the trust company's certificate of
authority, at which the powers granted to trust companies under K.S.A.
9-2103, and amendments thereto, are exercised. For the purposes of
this section, any activity in compliance with K.S.A. 9-2107, and
amendments thereto, does not constitute a trust service office. SENATE BILL No. 139—page 11
(b) After first applying for and obtaining the approval of the
commissioner under this section, one or more trust service offices may
be established or operated in any city within this state by a trust
company incorporated under the laws of this state.
(c) An application to establish or operate a trust service office or
to relocate an existing trust service office shall be in the form and
manner prescribed by the commissioner and provide the following
documents:
(1) A certified copy of the written action taken by the board of
directors of the trust company approving the establishment or operation
of the proposed trust service office or the proposed relocation of the
trust service office;
(2) all other required regulatory approvals;
(3) proof of publication of notice that the applicant intends to file
or has filed an application pursuant to this section. The notice shall be
published in a newspaper of general circulation where the proposed
trust service office is to be located. The notice shall be in the form
prescribed by the commissioner and shall contain the name of the
applicant, the location of the proposed trust service office and a
solicitation for written comments. The notice shall be published on the
same day and every day thereafter for two consecutive weeks and
provide for a comment period of not less than 10 days after the date of
the second publication; and
(4) the application shall include the name selected for the
proposed trust service office. The name selected for the proposed trust
service office shall not be the same or substantially similar to the name
of any other trust company or trust service office doing business in the
state of Kansas, nor shall the name selected be required to contain the
name of the applicant trust company. If the name selected for the
proposed trust service office does not contain the name of the applicant
trust company, the trust service office shall provide in the public lobby
of such trust service office, a public notice that it is a trust service
office of the applicant trust company. Any trust company may request
an exemption from the commissioner from the provisions of this
subsection.
(d) A trust company making application to the commissioner for
approval of a trust service office under this section shall pay to the
commissioner a fee, in an amount established pursuant to K.S.A. 9-
1726, and amendments thereto, to defray the expenses of the
commissioner in the examination and investigation of the application.
The commissioner shall remit all moneys received under this section to
the state treasurer in accordance with the provisions of K.S.A. 75-4215,
and amendments thereto. Upon receipt of each such remittance, the
state treasurer shall deposit the entire amount in the state treasury to the
credit of the bank investigation fund. The moneys in the bank
investigation fund shall be used to pay the expenses of the
commissioner or designee in the examination and investigation of such
applications and any unused balance shall be transferred to the bank
commissioner fee fund.
(e) Upon the request of any trust company proposing to relocate
an existing trust service office to less than one mile 10 miles from the
trust company's existing location, the commissioner may exempt such
trust company from the requirements of this section. If an exemption is
provided under this subsection, each trust company shall document the
written action taken by the board of directors of the trust company
approving the proposed relocation of the trust service office and all
other required regulatory approvals.
(f) Upon the filing of a complete application with the
commissioner, the commissioner shall make or cause to be made, a SENATE BILL No. 139—page 12
careful examination and investigation. If the commissioner finds any of
the following matters unfavorably, the commissioner may deny the
application:
(1) The reasonable probability of usefulness and success of the
proposed trust service office; and
(2) the applicant trust company's financial history and condition
including the character, qualifications and experience of the officers
employed by the trust company.
(g) Upon service of an order denying an application, the applicant
shall have the right to a hearing to be conducted in accordance with the
Kansas administrative procedure act before the state banking board.
Any final order of the state banking board pursuant to this section is
subject to review in accordance with the Kansas judicial review act.
(h) When the commissioner determines that a trust company
domiciled in this state has established or is operating a trust service
office in violation of the laws governing the operation of such trust
company, the commissioner may take such action as available under
K.S.A. 9-1714, 9-1805, 9-1807 or 9-1809, and amendments thereto, to
remedy such violation.
Sec. 9. K.S.A. 9-2111 is hereby amended to read as follows: 9-
2111. (a) Except as provided in K.S.A. 9-2107, and amendments
thereto, no trust company, trust department of a bank, corporation or
other business entity, the with a home office of which is located outside
the state of Kansas, shall establish or operate a trust facility within the
state of Kansas, unless the laws of the state where the home office of
the nonresident trust company, trust department of a bank, corporation
or other business entity is located authorize a Kansas chartered Kansas-
chartered trust company, trust department of a bank, corporation or
other business entity to establish or operate a trust facility within that
state. The commissioner may require any nonresident trust company to
meet the greater of the requirements stated under the banking code or
the laws of the nonresident trust company's home state required for a
Kansas trust company to do business in the nonresident trust
company's home state.
(b) Before any nonresident trust company, trust department of a
bank, corporation or other business entity establishes a trust facility in
Kansas, a copy of the application submitted to the home state, and
proof that the home state authorizes a Kansas chartered Kansas-
chartered trust company, trust department of a bank, corporation or
other business entity to establish or operate a trust facility within that
state, must shall be filed by the applicant with the commissioner.
(c) No Kansas trust company shall establish an out-of-state trust
facility until an application has been filed with the commissioner and
approval has been received. An application filed pursuant to this section
shall be subject to the provisions in K.S.A. 9-2108, and amendments
thereto.
(d) No Kansas bank with a trust department shall establish an out-
of-state trust facility until an application has been filed with the
commissioner and approval has been received. An application filed
pursuant to this section shall be subject to the provisions in K.S.A. 9-
1111, and amendments thereto.
(e) As used in this section, "trust facility" means any office,
agency, desk or other place of business at which trust where business is
conducted.
(f) Any Kansas trust company or Kansas bank making application
to the commissioner pursuant to subsection (c) or (d) shall pay to the
commissioner a fee to be established pursuant to K.S.A. 9-1726, and
amendments thereto, to defray the expenses of the commissioner in the
examination and investigation of the application. The commissioner SENATE BILL No. 139—page 13
shall remit all moneys received under this section to the state treasurer
in accordance with the provisions of K.S.A. 75-4215, and amendments
thereto. Upon receipt of each such remittance, the state treasurer shall
deposit the entire amount in the state treasury to the credit of the bank
investigation fund. The moneys in the bank investigation fund shall be
used to pay the expenses of the commissioner in the examination and
investigation of such applications and any unused balance shall be
transferred to the bank commissioner fee fund.
Sec. 10. K.S.A. 9-519, 9-1111, 9-1114, 9-1724, 9-1807, 9-2011, 9-
2101, 9-2108, 9-2111 and 16-842 and K.S.A. 2024 Supp. 9-2107 are
hereby repealed.
Sec. 11. This act shall take effect and be in force from and after its
publication in the statute book.
I hereby certify that the above BILL originated in the
SENATE, and passed that body
__________________________
SENATE adopted
Conference Committee Report ________________
_________________________
President of the Senate.
_________________________
Secretary of the Senate.
Passed the HOUSE
as amended _________________________
HOUSE adopted
Conference Committee Report ________________
_________________________
Speaker of the House.
_________________________
Chief Clerk of the House.
APPROVED _____________________________
_________________________
Governor.