Division of the Budget
Landon State Office Building Phone: (785) 296-2436
900 SW Jackson Street, Room 504 larry.campbell@ks.gov
Topeka, KS 66612 Division of the Budget http://budget.kansas.gov
Larry L. Campbell, Director Laura Kelly, Governor


February 12, 2019


The Honorable Julia Lynn, Chairperson
Senate Committee on Commerce
Statehouse, Room 445-S
Topeka, Kansas 66612
Dear Senator Lynn:
SUBJECT: Fiscal Note for SB 5 by Senators Faust-Goudeau and Ware
In accordance with KSA 75-3715a, the following fiscal note concerning SB 5 is
respectfully submitted to your committee.
SB 5 would create the Kansas Reinvestment Act to promote job creation and economic
development in impoverished areas of the state and promote the growth of communities in those
areas by providing financial assistance to small businesses and community organizations. The bill
would define an “impoverished area” as a zip code area where the median income does not exceed
70.0 percent of the state median income, according to United States Census Bureau data for the
most recent year available. The Kansas Reinvestment Program would be established as a new
program within the Department of Commerce with a program manager appointed by the Secretary
of Commerce.
The bill would create a new fund in the State Treasury entitled the Kansas Reinvestment
Act Fund. Subject to appropriations acts, the Director of Accounts and Reports would transfer
$1,250,000 from the State General Fund to the Kansas Reinvestment Act Fund each year on July
1, 2019, through July 1, 2022. The program would be authorized to use up to 10.0 percent of the
amount transferred each year to the Kansas Reinvestment Act Fund for administering the program.
The bill would outline loan terms of the program.
The bill outlines business activities that would not be eligible for loans under the program,
including nude or semi-nude dancing; pornography; sale of alcoholic liquor; sales of cigarettes,
pipe tobacco, or pipes; loans utilizing title to vehicles as collateral; and check cashing. The Kansas
Reinvestment Act would sunset on July 1, 2023.
The Honorable Julia Lynn, Chairperson
Page 2—SB 5

Estimated State Fiscal Effect
FY 2019 FY 2019 FY 2020 FY 2020
SGF All Funds SGF All Funds
Revenue -- -- ($1,250,000) --
Expenditure -- -- $125,000 $250,000
FTE Pos. -- -- -- 2.00

Enactment of SB 5 would reduce revenues to the State General Fund by $1,250,000 each
year as a result of the transfers authorized to the newly created Kansas Reinvestment Act Fund.
The Department of Commerce indicates that it would require first-year expenditures totaling
$250,000, as well as 2.00 FTE positions, including 1.00 Program Manager and 1.00 support staff.
Of this amount, $200,000 would be for salaries and wages and $50,000 would be for other
operating expenditures, including computers and office equipment. The agency estimates that of
the $250,000, $125,000 or 10.0 percent of the $1,250,000 would come from the Kansas
Reinvestment Act Fund and the remaining $125,000 would come from the State General Fund.
After the first year, the Department estimates expenditures for the program each year
totaling $225,000, including $200,000 for salaries and wages and $25,000 for other operating
expenditures. The agency estimates that of the $225,000, $125,000 or 10.0 percent of the
$1,250,000 would come from the Kansas Reinvestment Act Fund and the remaining $100,000
would come from the State General Fund. After administration costs, the program would have
approximately $1,125,000 to loan in FY 2020 through FY 2023. Any fiscal effect associated with
SB 5 is not reflected in The FY 2020 Governor’s Budget Report.


Sincerely,

Larry L. Campbell
Director of the Budget


cc: Sherry Rentfro, Commerce