9-2108.   Trust service office; establishment orrelocation; application.It is unlawful for any trust company to establishor operate a trust service office or relocate anexisting trust service officeexcept as provided in this act.

      (a)   As used in this section:"Trust service office" means anyoffice, agency or other place of business located within this state other thanthe place of business specified in the trust company's certificate ofauthority, 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 incompliance with K.S.A. 9-2107, and amendments thereto, does notconstitute a trust service office.

      (b)   After first applying for and obtaining the approval of the commissionerunder this section, one or more trust serviceoffices may be established or operated in any city within this state by a trustcompany incorporated under the laws ofthis state.

      (c)   An application to establish or operate a trust serviceoffice or torelocate an existing trust service office shall be in such form and containsuch information as requiredby the commissioner and shall include certified copies of the followingdocuments:

      (1)   The written action taken by the board of directors of the trust companyapproving the establishment or operation of the proposed trust service officeor the proposed relocation of the trust service office;

      (2)   all other required regulatory approvals; and

      (3)   an affidavit of publication of notice of intent to file an applicationto establish or operate a trust service office or relocate an existing trustservice office. Publication of the notice shall be on the same day for twoconsecutive weeks in the official newspaper of the city where the proposedtrust service office is to be located. The notice shall be in the formprescribed by the commissioner and shall contain the name of the applicant, thelocation of the proposed trust service office, the proposed date of filing ofthe application with the commissioner, a solicitation for written commentsconcerning the application and a notice of the public's right to file a writtenrequest for a public hearing for the purpose of presenting oral or writtenevidence regarding the proposed trust service office. All comments andrequests for public hearing shall be filed with the commissioner on or beforethe 30th day after the date the application is filed.

      (d)   A trustcompany making application to the commissioner for approval of a trust serviceoffice under this section shall pay to the commissioner a fee, in an amountestablished by rules and regulations of the commissioner, adopted pursuant toK.S.A. 9-1713, and amendments thereto, to defray the expenses of thecommissioner or designee in the examination and investigation of theapplication. The commissioner shall remit all amounts received under thissection to the state treasurer inaccordance withthe provisions of K.S.A. 75-4215, and amendments thereto. Upon receipt of eachsuch remittance, the state treasurer shall deposit the entire amount in thestate treasury to the credit of a separateaccountin the state treasury for each application. The moneys in each such accountshall be used to pay the expenses of the commissioner or designee in theexamination and investigation of the application to which it relates and anyunused balance shall be transferred to the bank commissioner feefund.

      (e)   Upon filing of any such application with the commissioner, thecommissioner shall make or cause to be made, a careful examination andinvestigation concerning:

      (1)   The reasonable probability of usefulness andsuccess of the proposed trust service office;

      (2)   the applicant trust company's financial history andcondition including the character, qualifications and experienceof the officers employed by the trust company; and

      (3)   whether the proposed trust service office can be establishedwithout undueinjury to properly conducted existing banks, national banking associations andtrust companies. If the commissioner determines any of such mattersunfavorably to the applicants, the application shall be disapproved, but ifnot, the application shall be approved.

      (f)   If no written request for public hearing is filed, the commissionershall render approval or disapproval of the application within 60 days of thedate upon which the application was filed.

      (g)   If a written request for public hearing is filed, the commissioner shall holda public hearing in a location determined by the commissioner within 30 days ofthe close of the comment period. Notice of the time, date and place of thehearing shall be published by the applicant in a newspaper of generalcirculation in the county where the proposed trust service office is to belocated, not less than 10 or more than 30 days prior to the date of thehearing, and an affidavit of publication shall be filed with the commissioner. At any such hearing, all interested persons shall be allowed to present writtenand oral evidence to the commissioner in support of or in opposition to theapplication. Upon completion of a transcript of the testimony given at anysuch hearing, the transcript shall be filed in the office of the commissioner. Within 14 days after the public hearing, the commissioner shall approve ordisapprove the application after consideration of the application and evidencegathered during the commissioner's investigation.

      (h)   The commissioner may extend the period for approval or disapproval ifthe commissioner determines that any information required by this section hasnot been furnished, any material information submitted is inaccurate oradditional investigation is required. The commissioner, prior to expiration ofthe application period as provided in this section, shall give written noticeto the applicant of the commissioner's intent to extend the period and suchnotice shall include a specific date for expiration of the extension period. If any information remains incomplete or inaccurate upon the expiration of theextension period the application shall be disapproved.

      (i)   Within 15 days of the date after the commissioner's approval ordisapproval of the application, the applicant or any individual or corporationwho filed a request for and presented evidence at the public hearing shall havethe right to appeal in writing to the state banking board the commissioner'sdetermination, by filing a notice of appeal with the commissioner. The statebanking board shall fix a date for a hearing, which hearing shall be heldwithin 45 days from the date such notice of appeal is filed.The board shall conduct the hearing in accordance with the provisions of theKansas administrative procedure act and render its decision affirming orrescinding the determination of the commissioner. Action of the board pursuantto this section is subject to review in accordance with the act for judicialreview and civil enforcement of agency actions. Any party which files anappeal to the state banking board of the commissioner's determination shall payto the commissioner a fee in an amount established by rules and regulations ofthe commissioner, adopted pursuant to K.S.A. 9-1713, and amendmentsthereto, todefray the board's expenses associated with the conduct of the appeal.

      (j)   When the commissioner determines that a trust company domiciled in thisstate has established or is operating a trust service office in violation ofthe laws governing the operation of such trust company, the commissioner shallgive written notice to the trust company of such determination. Within 15 daysafter receipt of such notification, the trust company may appeal in writing tothe state banking board the commissioner's determination. The board shall fixa date for hearing, which hearing shall be held within 45 days from the date ofsuch appeal and shall be conducted in accordance with the provisionsof the Kansas administrative procedure act. At such hearing the board shallhear all matters relevant to the commissioner's determination and shall approveor disapprove the commissioner's determination, and the decision of the boardshall be final and conclusive. If the trust company does not appeal to thestate banking board from the commissioner's determination or if an appeal ismade and the commissioner's determination is upheld by the board, thecommissioner may proceed as provided in K.S.A. 9-1714, and amendmentsthereto,until such time as the commissioner determines the trust company is in fullcompliance with the laws governing the operation of a trust service office.

      History:   L. 1993, ch. 81, § 1;L. 1994, ch. 51, § 2;L. 2001, ch. 5, § 49; July 1.