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 6, 2024


The Honorable Renee Erickson, Chairperson
Senate Committee on Commerce
300 SW 10th Avenue, Room 546-S
Topeka, Kansas 66612
Dear Senator Erickson:
SUBJECT: Fiscal Note for SB 464 by Senator Faust Goudeau
In accordance with KSA 75-3715a, the following fiscal note concerning SB 464 is
respectfully submitted to your committee.
SB 464 would create the Kansas Minority, Woman, Disadvantaged and Service-Disabled
Veteran Small Business Enterprise Development Act. The bill would create the Kansas Certified
Small Business Enterprise Development Program within the Department of Commerce. The Act
would facilitate and increase participation by certified small business enterprises in providing an
opportunity to participate in contracts for public works, goods, and services to state agencies and
postsecondary educational institutions from the private sector. The bill would define a “certified
small business enterprise” as an airport concession disadvantaged business enterprise, minority
business enterprise, woman business enterprise, disadvantaged business enterprise or service-
disabled veteran-owned business enterprise. The Office of Minority and Women Business
Development, of the Department of Commerce, and the Office of Civil Rights, of the Department
of Transportation, would certify small business enterprises.
The Assistant Director of the Office of Minority and Women Business Development would
administer the Program and assist state agencies and postsecondary educational institutions to
establish plans, goals and policies to include monitoring and enforcing compliance and
investigating complaints. Each state agency would adopt a plan to ensure that certified small
business enterprises are afforded the maximum opportunity to participate in contracts for public
works and goods and services. The bill would allow a contract to be awarded to the next lowest
bidder if the lowest bidder does not meet the established goals of the Act. The Department also
would be required to submit an annual report to the Governor and the Legislature regarding the
progress in implementing the Act, including those agencies and postsecondary educational
institutions that are not in compliance with the Act. A city, county, and unified school district
The Honorable Renee Erickson, Chairperson
Page 2—SB 464

could also adopt a Certified Small Business Enterprise Procurement Program by coordinating with
the Assistant Director.
The Assistant Director would also be permitted to create an advisory committee and
appoint members upon consultation with the Office of Civil Rights. The bill would also provide
for civil monetary penalties of up to $5,000 for each separate violation of the Act that would be
deposited into the State General Fund. Repeated violations of the Act could disqualify a contractor
from participating in State contracts and any aggrieved business entity could appeal an order in
district court. The bill would also allow the Attorney General to bring action and recover
reasonable attorney fees and investigation costs. The provisions of the Act would be severable.
Department of Commerce indicates enactment of SB 464 would increase its operating
expenditures for administering the Program by $91,000 from the State General Fund for 1.00
Program Manager FTE position and associated operating expenditures for equipment and printing.
The Department of Administration indicates enactment of SB 464 could lead to additional
costs for state agencies because the agencies would no longer be using the current procurement
criteria which is choosing the lowest bid. Instead, SB 464 would require the agencies to accept
the next lowest bid and would allow all bids to be rejected and new bids obtained, if the lowest
bidder did not meet goals established for a particular contract. If the Department’s Office of
Procurement and Contracts is required to monitor the compliance and performance of contractors
then its expenditures would increase agency expenditures. However, the Department is unable to
estimate the fiscal effect SB 464.
Board of Regents indicates enactment of SB 464 could increase operating expenditures
because it would have to spend more administrative time on procurement activities. In addition,
the Board could be required to approve more expensive contracts to adhere to the requirements of
the bill. The agency is unable to estimate the fiscal effect.
The Office of Judicial Administration indicates SB 464 could increase the number of cases
filed in the district courts because the provisions allow for appeals under the Kansas Judicial
Review Act. These provisions would increase time spent by district court judicial and nonjudicial
personnel in processing, researching, and hearing cases. The enactment of the bill could increase
the collection of docket fees, fines, and supervision fees that would be deposited into the State
General Fund. The agency indicates that it is unable to estimate a precise fiscal effect.
The Office of the Attorney General cannot estimate the resources needed to enforce SB
464, but any additional expenditures would be financed with existing resources. The agency also
indicates it is likely that the bill’s provisions would be challenged in court. However, the agency
is unable to estimate the fiscal effect if this would occur. The Department of Transportation states
that it would provide the certifications required in the bill within existing resources. Any fiscal
effect associated with SB 464 is not reflected in The FY 2025 Governor’s Budget Report.
The Kansas Association of Counties and the League of Kansas Municipalities indicate SB
464 could increase revenues for counties and cities if businesses that are awarded contracts succeed
The Honorable Renee Erickson, Chairperson
Page 3—SB 464

in providing goods and services to the state. The bill could also result in additional expenditures
to the counties and cities if they choose to develop a Small Business Enterprise Development
Program according to the bill’s provisions. However, the Association and the League are unable
to estimate a fiscal effect.

Sincerely,

Adam C. Proffitt
Director of the Budget


cc: Trisha Morrow, Judiciary
Sherry Rentfro, Department of Commerce
Becky Pottebaum, Board of Regents
Wendi Stark, League of Kansas Municipalities
Jay Hall, Kansas Association of Counties
Tamara Emery, Department of Administration
Brendan Yorkey, Department of Transportation