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 C. Proffitt, Director Laura Kelly, Governor


March 11, 2024


The Honorable Nick Hoheisel, Chairperson
House Committee on Financial Institutions and Pensions
300 SW 10th Avenue, Room 582-N
Topeka, Kansas 66612
Dear Representative Hoheisel:
SUBJECT: Fiscal Note for HB 2722 by House Committee on Financial Institutions and
Pensions
In accordance with KSA 75-3715a, the following fiscal note concerning HB 2722 is
respectfully submitted to your committee.
HB 2722 would enact the Second Amendment Financial Privacy Act that would prohibit
financial institutions from using a firearms code to engage in certain discriminatory conduct and
surveilling. The bill would prohibit the misuse of payment card processing systems to surveil,
report, or otherwise discourage constitutionally protected firearm and ammunition purchases
within the state. The bill would prohibit a governmental entity or person from knowingly and
intentionally keeping a list, record, or registry of privately owned firearms or owners of the
firearms. A financial institution would be prohibited from requiring the usage of the firearms code
in a way that distinguishes a firearms retailer located in Kansas from general merchandise retailers
or sporting goods retailers in the state. The bill would list ways a financial institution would be
prohibited from discriminating against a firearms retailer.
The Attorney General would investigate alleged violations of the Act and if a violation is
found, provide written notice to any individual or entity believed to be in violation. The individual
or entity would have 30 days to cease from the violation. A firearms retailer physically located in
Kansas whose business is the subject of an alleged violation would be permitted to petition the
Attorney General to investigate the alleged violation. If an individual or entity found to be in
violation of the Act fails to cease such violation within 30 days, the Attorney General would file
an injunction in the judicial district where the violation occurred. If the court found the individual
or entity continues to be in violation of the act 30 days after receipt of written notice, the court
would order the individual or entity from use of the firearms code. If a credit card company
violates the injunction, the court would impose a civil penalty of up to $10,000 per violation of the
injunction. The bill would also allow the Attorney General or petitioner who prevails to recover
reasonable expenses including court costs, reasonable attorney fees, investigative costs, witness
fees, and deposition expenses. It would not be a defense to an action under the Act that disclosure
The Honorable Nick Hoheisel, Chairperson
Page 2—HB 2722

of protected financial information is to a federal governmental entity unless such disclosure is
made based on a good faith belief that such disclosure is required by federal law or regulation.
The Office of the Attorney General indicates, under HB 2722, the agency would expend
$170,000 in FY 2025 and $187,000 in FY 2026 from the State General Fund to hire 1.00
Investigator FTE position, a 0.50 Attorney FTE position, and related operating costs. In addition,
the agency indicates the subject of the bill is a frequently litigated topic; however, the agency is
unable to estimate the cost of the litigation.
The Department of Credit Unions reports that HB 2722 would require an additional topic
to review on credit union examinations for the agency’s financial examiners. The review would
consist of policies and transactional reports, requiring an hour of staff time per examination. At
an average hourly rate of $33 per examination of 46 credit unions, the agency would incur $1,518
($33 x 1 hour x 46 exams) in examination costs from agency fee funds, which would be absorbed
within existing resources. The Office of the State Bank Commissioner states HB 2722 would not
have fiscal effect on the agency’s operations.
The Office of Judicial Administration indicates HB 2722 could increase the number of
cases filed in district courts because it allows for a court action to be filed, which would increase
the time spent by district court judicial and nonjudicial personnel in processing, researching, and
hearing cases. The bill could also result in the collection of docket fees and civil penalties that
would be deposited into the State General Fund. However, the agency cannot estimate the overall
fiscal effect of the bill. Any fiscal effect associated with HB 2722 is not reflected in The FY 2025
Governor’s Budget Report.
The Kansas Association of Counties indicates HB 2722 would not have fiscal effect. The
League of Kansas Municipalities indicates HB 2722 would have a fiscal effect on cities if a case
is filed in municipal court. However, the League is unable to estimate a precise fiscal effect on
cities.

Sincerely,

Adam C. Proffitt
Director of the Budget

cc: Trisha Morrow, Judiciary
William Hendrix, Office of the Attorney General
Julie Murray, Department of Credit Unions
Jay Hall, Kansas Association of Counties
Wendi Stark, League of Kansas Municipalities
Barbara Albright, Office of the State Bank Commissioner