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 Division of the Budget http://budget.kansas.gov
Adam Proffitt, Director Laura Kelly, Governor


April 26, 2023


The Honorable Fred Patton, Chairperson
House Committee on Judiciary
300 SW 10th Avenue, Room 582-N
Topeka, Kansas 66612
Dear Representative Patton:
SUBJECT: Fiscal Note for HB 2294 by House Committee on Judiciary
In accordance with KSA 75-3715a, the following fiscal note concerning HB 2294 is
respectfully submitted to your committee.
HB 2294 would increase the minimum age required to purchase or possess tobacco
products from 18 years to 21 years of age. The bill would amend and update several definitions
under the Kansas Cigarette and Tobacco Products Act, including “electronic cigarette” and
“tobacco products” and would update other statutory references to be consistent with terms under
the Act. The bill would include new penalties for violations of the Act and would specify
additional penalties for repeated violations. The fees for a retail dealer’s license and vending
machine permit under the act would be increased from $25.00 to $50.00. The bill would also
include new requirements for age verification and notice of the age requirement. The Secretary of
Health and Environment would approve training programs previously approved by the Secretary
of Revenue aimed at preventing tobacco products from being sold, furnished, or distributed to
persons under 21 years of age. In addition, the bill would require at least one unannounced
compliance inspection of retail dealers each calendar year.
According to the Kansas Department of Revenue, enactment of HB 2294 would reduce
state revenues by approximately $7.6 million in FY 2024, $7.5 million in FY 2025, and $7.3
million in FY 2026. This estimate assumes that 4.74 percent of all smokers in the state fall within
the age range of 18-20. The agency estimates that the bill would result in a decrease in cigarette
sales of 2.0 percent each year. The potential loss of revenue in FY 2024 is estimated as follows: a
reduction in cigarette stamp revenue totaling $5.4 million; a reduction in sales tax revenue of $1.6
million; a reduction in E-cigarette tax of $100,000; and a reduction in tobacco tax of $500,000.
The decreased revenues would have a small offset of approximately $73,000 each fiscal year due
to the $25.00 increase in the retail dealer’s licenses and vending machine permits.
The agency also reports the bill would require administrative costs totaling $18,537. This
would include 240 hours of IT/E-Commerce work. The agency also notes that the bill would
The Honorable Fred Patton, Chairperson
Page 2—HB 2294

require cities and counties who conduct their own compliance checks for underage sales to report
each violation of a sale to an individual under the age of 21 to the department. This would require
additional resources to cities, counties, and the agency to be able to track and adjust customer
records. Cities and counties would need to access the agency’s database in which records are kept.
The Office of Judicial Administration states enactment of the bill could increase the
number of tobacco citations and result in additional crimes charged due to the age threshold
increase, this in turn could result in more time spent by court employees and judges processing
and hearing these cases. The Office estimates enactment of the bill could result in the collection
of docket fees and fines assessed in those cases filed under the bill’s provisions. According to the
Office, a fiscal effect cannot be estimated.
The Kansas Department of Health and Environment reported that some health system cost
savings would be expected over time, by reduction of deaths and diseases from commercial
tobacco product use, but a total effect could not be estimated. The Office of the Attorney General
states that the bill could result in a decrease in the sales of tobacco products, which could lead to
a decrease in payments to the state under the Master Settlement Agreement, but a total fiscal effect
could not be estimated. The Kansas Sentencing Commission reports the bill would not have any
fiscal effect on the agency. Any fiscal effect associated with HB 2294 is not reflected in The FY
2024 Governor’s Budget Report.
The Kansas Association of Counties states the bill would likely have an impact on counties
due to the cost associated with the reporting requirements, however a total fiscal effect could not
be estimated. The League of Kansas Municipalities reports that the bill would require cities to
conduct compliance checks for underage sales and report each violation to the Department of
Revenue. Implementation and enforcement would increase costs to local government, but an exact
fiscal effect is unable to be estimated.


Sincerely,

Adam Proffitt
Director of the Budget

cc: Vicki Jacobsen, Judiciary
Scott Schultz, Sentencing Commission
Jay Hall, Kansas Association of Counties
Lynn Robinson, Department of Revenue
Amy Penrod, Department of Health & Environment
John Milburn, Office of the Attorney General
Wendi Stark, League of Kansas Municipalities


Statutes affected:
As introduced: 12-4215, 19-4715a, 21-5102, 79-3321, 28-172a, 50-6a14, 50-6a17, 79-3301, 79-3302, 79-3303, 79-3304, 79-3309, 79-3322, 79-3323, 79-3324a, 79-3333, 79-3334, 79-3391, 79-3394, 79-3396, 79-3397