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Minutes for SB392 - Committee on Insurance and Pensions
Short Title
Terminating the transfer of remaining unencumbered moneys in the securities act fee fund exceeding $50,000 to the state general fund.
Minutes Content for Mon, Mar 7, 2022
Chairperson Johnson opened the hearing on SB392.
Eileen Ma, Assistant Revisor, Office of the Revisor of Statutes, provided a briefing of SB392. (Attachment2) Ms. Ma stood for questions.
Proponent Adam Proffitt, Director of the Budget, State of Kansas Division of the Budget, provided proponent testimony on SB392 stating the bill would amend statute to permanently eliminate the transfer of surplus ending balances from the securities act fee fund to the state general fund. (SGF) (Attachment3) Mr. Proffitt stood for questions.
Jeff Chanay, Chief Deputy Attorney General, State of Kansas Office of the Attorney General, stated SB392 is the final piece in concluding the litigation captioned Thomas Edward Blumer, on behalf of himself and all others similarly situated v. State of Kansas, in the District Court of Shawnee County, Kansas, Case No. 2019-CV-720. This case was a class action challenge to fee fund “sweeps” from the Securities Act Fee Fund pursuant to K.S.A. 17-12a601(a) and K.S.A. 75-3170a. The attorneys for the plaintiffs have indicated that passage of SB392 in its current form is compliant with the terms of the settlement agreement. Therefore, the Office of Attorney General recommends and requests its passage without amendment. (Attachment4)
Lee Modesitt, Director of Government Affairs and Communication, Kansas Insurance Department, provided proponent testimony stating SB392 seeks to update K.S.A. 17-12a601 by permanently repealing the statutory transfer of excess unencumbered amounts in the Securities Act Fee Fund at the conclusion of each fiscal year. SB392 is in response to the now settled lawsuit Blumer vs State of Kansas where the Plaintiffs argued fees paid by securities registrants into the Securities Act Fee Fund are to be used for regulating the securities industry and not transferred to the State General Fund (SGF). The Department respectfully requests passage of SB392 to prevent reversion to the illegal fee sweeps. (Attachment5)
Seeing no other testimonies, Chairperson Johnson closed the hearing on SB392.
