Brief⁽¹⁾

The bill would amend the Consumer Protection Act to exempt from certain provisions those governmental entities that dispose of surplus property by selling it. Specifically, surplus government property would be exempt from implied warranties of merchantability and fitness for a particular purpose as those terms are defined in Kansas statutes. The exemption would apply only if the governmental entity gives "conspicuous written notice of the warranty limitation, exclusion, or disclaimer." If the surplus property was a motor vehicle, the notice of limitation would have to be placed in a side window of the vehicle and would have to comply with the buyers guide required by federal regulations.

The bill would become effective upon publication in the Kansas Register.

Background

The introduced version of the bill was requested by the Department of Corrections which currently operates the state's surplus property program. As introduced, the bill would have exempted the disposal of surplus property by any governmental entity from all provisions of the Consumer Protection Act.

At the bill's hearing before the Senate Committee on Federal and State Affairs, the Secretary of Corrections spoke in favor of the bill. Representatives of the Attorney General and the Kansas Automobile Dealers Association presented testimony in opposition to the bill as introduced.

The Senate Committee on Federal and State Affairs amended the bill to provide the limited exemption from implied warranties rather than complete exemption from the Consumer Protection Act. The Committee's amendment also would make the bill effective upon publication in the Kansas Register.

The Senate Committee of the Whole amendment was technical in nature.

The Division of the Budget's fiscal note on the introduced version of the bill states that enactment would have no fiscal impact on the state. The fiscal note also states that failure to enact the bill would result in the need for the Department of Corrections to expend an additional $281,426 and to hire six new full-time equivalent employees in order to perform necessary testing and inspection of surplus equipment. Those expenditures would be financed either from the State General Fund or from increased fees to state agencies that dispose of surplus property. The fiscal note did not address any impact of subsequent Committee amendments.

1. *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.ink.org/public/legislative/fulltext-bill.html.