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


February 23, 2021


The Honorable Robert Olsen, Chairperson
Senate Committee on Commerce
Statehouse, Room 236A-E
Topeka, Kansas 66612
Dear Senator Olsen:
SUBJECT: Fiscal Note for SB 176 by Senate Committee on Commerce
In accordance with KSA 75-3715a, the following fiscal note concerning SB 176 is
respectfully submitted to your committee.
SB 176 would create the Kansas Home Inspectors Professional Competency and Financial
Responsibility Act and establish the Kansas Home Inspectors Advisory Council. The purpose of
the Council would be to assist and advise the Attorney General on industry standards, education,
testing requirements for applicants, and rules and regulations.
The Council would consist of seven members that would be appointed by the Attorney
General. The bill details the criteria for the members. Members of the Council would be paid
subsistence allowance, mileage and other expenditures that would be paid from the Home
Inspector Fee Fund or other available and appropriated funds of the Attorney General.
SB 176 details the duties and powers the Attorney General would have under the Act to
include administering and enforcing the Act, registering qualified applicants, creating forms,
creating needed technology, conducting investigations, and other duties. The bill describes the
application and renewal processes, including that the Attorney General could conduct a criminal
history record or background check. The bill would also set maximum fees the Attorney General
could assess. The Attorney General could deny, suspend, or revoke registration or impose
probationary conditions. SB 176 details the actions the Attorney General could take for violations
of this Act, including hiring independent counsel that would be paid from the Home Inspectors
Registration Fee Fund that is established in the bill.
Violations of this Act would be a class C nonperson misdemeanor. The bill also details
when and how actions could be brought against a registered home inspector. The bill would also
The Honorable Robert Olsen, Chairperson
Page 2—SB 176

require individuals performing home inspections to maintain general liability insurance coverage,
a policy of errors and omissions insurance coverage, and a surety bond.
On and after January 1, 2022, any individual performing home inspections would be
required to hold a current and valid registration and other requirements detailed in the bill. Finally,
the Act would expire on July 1, 2027.

Estimated State Fiscal Effect
FY 2021 FY 2021 FY 2022 FY 2022
SGF All Funds SGF All Funds
Revenue -- -- -- --
Expenditure -- -- $103,894 $103,894
FTE Pos. -- -- 3.00 3.00
According to the Office of the Attorney General, the last time the state required registration
of home inspectors was in FY 2013. Prior to that time, the registration function was performed by
a state agency with no full-time staff and had an approved FY 2013 budget of $15,013 that was
financed from the Kansas Home Inspectors Registration Fee Fund. The Office notes that it cannot
estimate the number of home inspectors that would register and that the registration fee would be
collected biennially. The agency assumes that most inspectors would register during FY 2023 and
that fees collected would need to sustain the program for two fiscal years. The Office estimates
that it would require 3.00 FTE positions and related operating expenditures of $415,575 each fiscal
year. Of that amount, $234,145 would be for salary and wage expenditures and $181,430 for
related operating expenditures that would include office rent, office furniture, travel expenses, law
enforcement equipment, information technology items, training, and other related office supplies.
Although the requirement to register would not begin until FY 2023 the agency would expend
approximately $103,894 in FY 2022 to set up the program to begin operation on July 1, 2022.
Since no revenues would be generated until FY 2023, the agency would require $103,894 from
the State General Fund in FY 2022 for startup expenditures and 3.00 FTE positions.
The Office of Judicial Administration states that enactment of SB 176 could increase the
number of cases filed in district court because it allows the Attorney General to bring court action,
allows appeals to be filed, and creates a new crime. This would increase the time spent by district
court judicial and nonjudicial personnel in processing, researching, and hearing cases. Because
the new crime creates a misdemeanor penalty, there could be more supervision of offenders
required to be performed by court services officers. The bill also could result in additional docket
fees, supervision fees, and fines assessed in cases filed under the provision of the bill. However,
a fiscal effect cannot be estimated.
According to the Kansas Insurance Department, because an individual performing home
inspections would be required to maintain a general liability insurance policy, enactment of SB
176 would result in an increase in premium taxes collected from insurance companies. The agency
would retain 1.0 percent of any additional premium tax collected from enactment of the bill and
The Honorable Robert Olsen, Chairperson
Page 3—SB 176

the remainder would be remitted to the State General Fund. However, the fiscal effect cannot be
estimated because the number of additional premium taxes that would be collected is unknown.
The Kansas Bureau of Investigation (KBI) states that the bill would allow the Attorney
General to conduct a criminal history record search or background check on an applicant or
registered home inspector. Because the bill does not explain how a criminal history record search
would be conducted, the KBI assumes that a name check would be conducted through the public
non-criminal justice website at a cost of $20 per search which would be paid by the Office of the
Attorney General. The revenues received by the KBI from these searches would offset any
additional expenditures. However, a fiscal effect cannot be estimated. Any fiscal effect associated
with SB 176 bill is not reflected in The FY 2022 Governor’s Budget Report.
The Kansas Association of Counties indicates that the bill could affect counites because
cases could be brought in district court. This could create a backlog of cases in some district
courts. However, a fiscal effect cannot be estimated. The League of Kanas Municipalities states
that the bill would not have a fiscal effect on cities.


Sincerely,

Adam Proffitt
Director of the Budget

cc: Paul Weisgerber, KBI
Janelle Williams, Judicial Council
Bobbi Mariani, Insurance
Willie Prescott, Office of the Attorney General
Debbie Thomas, Judiciary
Wendi Stark, League of Municipalities
Jay Hall, Association of Counties