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
January 28, 2025
The Honorable Brenda Dietrich, Chairperson
Senate Committee on Financial Institutions and Insurance
300 SW 10th Avenue, Room 546-S
Topeka, Kansas 66612
Dear Senator Dietrich:
SUBJECT: Fiscal Note for SB 42 by Senate Committee on Financial Institutions and
Insurance
In accordance with KSA 75-3715a, the following fiscal note concerning SB 42 is
respectfully submitted to your committee.
SB 42 would create the Kansas Real Time Motor Vehicle Insurance Verification Act. The
bill would require the Insurance Commissioner to establish a web-based system for online and real
time verification of motor vehicle insurance and would require motor vehicle insurers to establish
functionality for the system. The Commissioner would be required to adopt rules and regulations
to operate the provisions of the Act. The new verification system would supersede any existing
motor vehicle liability insurance verification system requirements and would become the sole
electronic system for verifying motor vehicle liability insurance. The bill would outline the
security, use, interface, information, and functionality of the system. The system would be
required to be fully operational no later than July 1, 2026, following an appropriate testing period
of not less than nine months.
The Commissioner could conduct a competitive bid and contract with a private service
provider that has successfully implemented similar systems in other states to assist in establishing,
implementing, and maintaining the system. The Insurance Department would provide funding for
the implementation, ongoing maintenance, and enhancement of the system. The bill would
provide that insurers would be required to cooperate with the Commissioner and the Kansas
Department of Revenue to establish and maintain the system. The bill also would outline other
items that insurers would be authorized or required to perform. Insurers would also be immune to
civil and administrative liability for good faith efforts to comply with the Act. The Act would not
apply to vehicles insured under commercial motor vehicle coverage.
The Honorable Brenda Dietrich, Chairperson
Page 2—SB 42
The Commissioner could establish, through rules and regulations, an alternative method
for verifying motor vehicle liability insurance for insurers that insure 1,000 or fewer vehicles in
Kansas. All information and data provided by insurance companies to the system, and all reports,
responses or other information generated would be confidential and privileged, and would not be
subject to the Open Records Act, nor would it be subject to discovery or admissible as evidence in
a private civil action.
The Kansas Department of Insurance estimates that enactment of the bill would cost $1.0
million in FY 2026 and $500,000 in FY 2027 from its Insurance Department Service Regulation
Fee Fund. The Department indicates that the cost of real time verification can vary depending on
specific features. The agency’s estimates include the startup costs and the verification testing in
FY 2026. The cost for FY 2027 includes ongoing maintenance and other services required for the
new system.
The Department of Revenue estimates that it would require $45,100 from the State General
Fund in FY 2026 to modify and test agency databases and update publications. The estimate
includes development and testing of its internal system as well as creating a new interface between
the Kansas Department of Insurance and the Department of Revenue. 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 would
exceed 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. Any fiscal effect associated with SB 42 is not
reflected in The FY 2026 Governor’s Budget Report.
Sincerely,
Adam C. Proffitt
Director of the Budget
cc: Kyle Strathman, Insurance Department
Lynn Robinson, Department of Revenue