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 http://budget.kansas.gov
Adam C. Proffitt, Director Laura Kelly, Governor
Division of the Budget
February 5, 2024
The Honorable Jeff Longbine, Chairperson
Senate Committee on Financial Institutions and Insurance
300 SW 10th Avenue, Room 546-S
Topeka, Kansas 66612
Dear Senator Longbine:
SUBJECT: Fiscal Note for SB 406 by Senate Committee on Financial Institutions and
Insurance
In accordance with KSA 75-3715a, the following fiscal note concerning SB 406 is
respectfully submitted to your committee.
SB 406 would enact the Kansas Money Transmission Act, which would replace the current
Kansas Money Transmitter Act. The Act would provide for the licensing requirements and
regulation of licensees engaged in money transmission. The bill would define “money
transmission” as selling or issuing payment instruments to a person located in Kansas; selling or
issuing stored value to a person located in Kansas; receiving money for transmission from a person
located in Kansas; or payroll processing services. The Office of the State Bank Commissioner
would have administrative authority to administer, interpret, and enforce the act as well as establish
consistent licensing practices between Kansas and other states through a multistate licensing
process. The bill sets forth various requirements of a licensee including providing different reports
and annual financial statements, as well as maintaining a tangible net worth, security in the form
of a surety bond or deposit, and permissible investments.
The Commissioner would have the authority to suspend or revoke a license after
conducting a hearing in accordance with the Kansas Administrative Procedure Act. SB 406 would
also authorize the Commissioner to assess fines of up to $5,000 per violation, as part of a summary
order or consent order. The Commissioner would be allowed to designate any fine collected to be
used for consumer education. In addition, a person that intentionally makes a false statement,
misrepresentation, or false certification in a record filed under this Act or makes a false entry or
omits a material entry in such record would be guilty of a severity level 9, nonperson felony. Any
person that engages in activity for which a license is required under this Act and receives more
than $500 in compensation within a 30-day period of the Act, would be guilty of a severity level
9, nonperson felony. If the compensation is less than $500, the person would be guilty of a class
A nonperson misdemeanor. The bill would take effect on January 1, 2025.
The Honorable Jeff Longbine, Chairperson
Page 2—SB 406
The Office of the State Bank Commissioner indicates that SB 406 only modernizes the
current Kansas Money Transmitter Act. The agency would use existing resources to implement
the bill. The Sentencing Commission indicates SB 406 could have an effect on prison admissions,
bed space, and workload of the Commission; however, any fiscal effect would be negligible. The
Department of Corrections indicates that any increase in the prison population resulting from SB
406, based on the Kansas Sentencing Commission prison estimates, would be absorbed within the
Department’s existing resources. The Office of Judicial Administration indicates it would
implement HB 2603 using existing resources. Any fiscal effect associated with SB 406 is not
reflected in The FY 2025 Governor’s Budget Report.
The Kansas Association of Counties and the League of Kansas Municipalities both state
SB 406 would not have a fiscal effect on the counties and cities.
Sincerely,
Adam C. Proffitt
Director of the Budget
cc: Barbara Albright, Office of the State Bank Commissioner
Scott Schultz, Kansas Sentencing Commission
Trisha Morrow, Judiciary
Wendi Stark, League of Kansas Municipalities
Jay Hall, Kansas Association of Counties
Jennifer King, Department of Corrections