SESSION OF 2021
SUPPLEMENTAL NOTE ON SENATE BILL NO. 30
As Amended by Senate Committee on
Insurance

Brief*
SB 30, as amended, would amend the Kansas Uniform
Securities Act (Act) and provisions in law applying to the
purpose of certain funds to create a Securities Act Victims
Restitution Program, which would provide restitution to
certain victims of securities violations. The bill would establish
the Securities Act Victim Restitution Fund (Fund) and require
that on July 1, 2021, $250,000 be transferred to this Fund.
The bill would amend the statute of limitations for
prosecutions under the Act. The bill would also amend the
Kansas Administrative Procedure Act to add the definition of
“Administrator.” The bill would also make technical changes.

Statute of Limitations
The bill would make ten years the uniform statute of
limitations for all prosecutions for any crime under the Act.
Under current law, the ten-year statute of limitations applies
only if the victim is the Kansas Public Employees Retirement
System; all other prosecutions under the Act may not
commence more than five years after the alleged violation.

Procedures and Determinations
The bill would amend the Kansas Administrative
Procedure Act to specify for purposes of administrative
proceedings of the Kansas Insurance Department, including
____________________
*Supplemental notes are prepared by the Legislative Research
Department and do not express legislative intent. The supplemental
note and fiscal note for this bill may be accessed on the Internet at
http://www.kslegislature.org
the Office of the Securities Commissioner, “Administrator”
means the Securities Commissioner of Kansas or the
Assistant Commissioner of Insurance when assigned to
perform the hearing duties of the Securities Commissioner of
Kansas.

Investor Education and Protection Initiatives
The bill would amend requirements associated with the
Investor Education and Protection Fund to specify the
Administrator shall remit moneys received from civil penalties
or settlements arising from investigations or examinations to
the State Treasurer in accordance with KSA 75-4215. Upon
receipt of each remittance, the State Treasurer will be
required to deposit the entire amount in the State Treasury to
the credit of the Investor Education and Protection Fund.

Securities Act Victims Restitution Program
The bill would permit the Administrator to develop and
implement a Securities Act Victims Restitution Program for
the purpose of providing restitution assistance to victims of
securities violations who were awarded restitution as a result
of a legal or administrative action for violations of the Act but
who have no reasonable likelihood of receiving the full
amount of the awarded restitution.
Securities Act Victim Restitution Fund
The bill would create the Fund in the State Treasury; the
Fund is to be administered by the Administrator. The bill
would require all expenditures from the Fund to be used to
provide restitution assistance to victims of securities
violations who were awarded restitution as the result of a
legal or administrative action for violations of the Act but who
have no reasonable likelihood of receiving the full amount of
the awarded restitution. The bill would require expenditures to
be made in accordance with appropriations acts upon
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warrants of the Director of Accounts and Reports issued
pursuant to vouchers approved by the Administrator or the
Administrator’s designee. The Administrator would be
permitted to accept all gifts, grants, donations, and bequests
to the Fund. The bill would also require the Administrator to
remit moneys received to the State Treasurer in accordance
with KSA 75-4215 and, upon receipt of each remittance, the
State Treasurer will be required to deposit the entire amount
to the credit of the Fund.
Definitions
The bill would create definitions associated with the
Securities Act Victims Restitution Program, including these:
● “Claimant” would mean a person who files an
application for restitution assistance from the Fund
on behalf of a victim, including the person awarded
restitution in a final order for a violation of this act,
the executor of such person, and the heirs and
assigns of such person. The claimant and the
victim may be, but not need be, the same person;
● “Final order” would mean an order issued by the
Administrator or an order issued in a legal action
brought by the Administrator or the Attorney
General pursuant to this act that is not subject to
judicial review or appeal;
● “Restitution assistance” would mean payment from
the Fund to an eligible claimant;
● “Securities violation” would mean a violation of the
Act, adopted rules and regulations, or an order
under this act; and
● “Victim” would mean a person who was awarded
restitution in a final order.

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Eligibility
The bill would provide only natural persons who were
residents of Kansas at the time of the securities violation that
resulted in an award of restitution in a final order are eligible
to receive restitution assistance from the Fund. The
Administrator would be prohibited from paying restitution from
the Fund:
● To more than one claimant per victim;
● Unless the person ordered to pay restitution has
not paid the full amount of restitution owed to the
victim before the application for restitution
assistance from the Fund is due;
● On behalf of a person who is not a victim;
● To or on behalf of a person who sustained
monetary injury as a result of committing,
attempting to commit, participating in, or assisting
in the securities violation that resulted in the
restitution award for which the claimant seeks
restitution from the Fund; or
● If there was no award of restitution in the final
order.
Restitution Assistance
The bill would permit restitution assistance to be
provided as follows:
● The maximum restitution assistance award per
victim from the Fund would be the lesser of
$25,000 or 25.0 percent of the amount of restitution
awarded in the final order, excluding any interest
awarded, that remains unpaid at the time the
Administrator awards restitution assistance; and

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 ● If the victim is a vulnerable person, the maximum
restitution assistance would be the lesser of
$50,000 or 50.0 percent of the amount of restitution
awarded in the final order, excluding any interest
awarded, that remains unpaid at the time the
Administrator awards restitution assistance:
○ The bill would define a “vulnerable person” as
a person who met the definition of elder
person or dependent adult in KSA 2020 Supp.
21-5417 (mistreatment of a dependent or an
elder adult), at the time of the securities
violation that resulted in an award of
restitution in a final order.
Transfers to the Fund
The bill would require, on July 1, 2021, or as soon as
moneys become available, the Director of Accounts and
Reports to transfer $250,000 from the Securities Act Fee
Fund to the Fund. Beginning in fiscal year (FY) 2023, and in
each fiscal year thereafter, at the Administrator’s discretion,
the bill would allow the Administrator to increase the balance
in the Fund by transferring amounts from the Investor
Education and Protection Fund. However, the bill would state
the remaining balance in this fund after any such transfer
shall be at least $50,000.
Procedures and Determinations
The bill would also permit the Administrator to establish
procedures for the application and determination of restitution
assistance awards from the Fund by rules and regulations
adopted or an order issued under this act.
The bill would provide that determinations made by the
Administrator with respect to the Fund and applications for
restitution assistance would be subject to the sole discretion
of the Administrator and would not be subject to judicial

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review in accordance with provisions of the Kansas Judicial
Review Act.
Funds Used for Specific Purposes
The bill would amend law to add the Fund to the list of
funds, including the Securities Act Fee Fund and the Investor
Education and Protection Fund, with purposes set forth in
statutes concerning such funds and for no other
governmental purposes.

Background
The bill was introduced by the Senate Committee on
Insurance at the request of the Kansas Insurance Department
(Department).
[Note: 2021 SB 30 contains provisions similar to 2020
HB 2558, as recommended by the House Committee on
Insurance.]

Senate Committee on Insurance
In the Senate hearing, a representative of the
Department provided proponent testimony, stating the bill
would help Kansas victims of securities fraud recover some of
their losses when those who commit fraud cannot pay
restitution.
No neutral or opponent testimony was provided.
The Senate Committee amended the bill to clarify only
legal residents of Kansas at the time of the securities violation
that resulted in an award of restitution would be eligible to
receive restitution assistance from the Fund.
The Senate Committee also amended a section of the
bill related to administrative procedures and review. The bill,
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as introduced, stated determinations made by the
Administrator with respect to the Fund and applications for
restitution assistance would be subject to the sole discretion
of the Administrator and shall not be subject to judicial review
in accordance with the provisions of the Kansas Judicial
Review Act.
As amended, the bill would allow:
● Any natural person adversely affected by an order
or decision of the Administrator under the Act to
make, within 15 days of service of the order or
decision, a written request for a hearing; and
● Any natural person adversely affected by any final
action of the Administrator pursuant to the Act to
obtain a review of the action in accordance with the
Kansas Judicial Review Act.
Fiscal Information
According to the fiscal note prepared by the Division of
the Budget on the bill as introduced, the Department cannot
estimate the amount of restitution enabled by the bill,
because the amount of restitution uncollected by victims is
unknown. However, Department estimates restitution
payments would be less than $200,000 in FY 2022. The
Department states expenditures to operate the program
would be negligible and could be absorbed within existing
resources. Because the Department is required by statute to
transfer any excess balances over $50,000 of its Securities
Act Fee Fund to the State General Fund (SGF), the SGF
would see a decrease in revenues of $250,000 in FY 2022.
Any fiscal effect associated with the bill is not reflected in The
FY 2022 Governor’s Budget Report.
Insurance; Uniform Securities Act; Victims Restitution Program; Kansas
Administrative Procedure Act


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Statutes affected:
As introduced: 17-12a508, 77-547, 17-12a601, 17-12a609, 75-3036
As Amended by Senate Committee: 17-12a508, 77-547, 17-12a601, 17-12a609, 75-3036