Kansas HB 2518: Municipal energy agencies.

Bill Text

HOUSE BILL No. 2518
AN ACT enacting the Kansas transparency in consumer legal funding act; providing
requirements for consumer legal funding agreements; prohibiting consumer legal
funding companies from engaging in certain conduct; requiring certain consumer
disclosures related to consumer legal funding agreements; providing for penalties for
violation of the act.
Be it enacted by the Legislature of the State of Kansas:
Section 1. (a) The provisions of sections 1 through 4, and
amendments thereto, shall be known and may be cited as the
transparency in consumer legal funding act. The purpose of the act is to
promote consumer protections related to consumer legal funding
transactions.
(b) The provisions of this act are severable. If any portion of this
act is held by a court to be unconstitutional or invalid, or the
application of any portion of this act to any person or circumstance is
held by a court to be unconstitutional or invalid, the invalidity shall not
affect other portions of this act that can be given effect without the
invalid portion or application and the applicability of such other
portions of this act to any person or circumstance remains valid and
enforceable.
Sec. 2. As used in the transparency in consumer legal funding act:
(a) "Advertise" means publishing or disseminating any written,
oral, electronic or printed communication or any communication by
means of recorded telephone message or transmitted or broadcast on
radio, television, the internet or similar communication media,
including, but not limited to, audio recordings, film strips, motion
pictures and videos, published, disseminated, circulated or placed
before the public for the purpose of inducing a consumer to enter into a
consumer legal funding contract.
(b) "Charges" means the amount of money to be paid to the
consumer legal funding company by or on behalf of the consumer,
above the funded amount provided by or on behalf of the consumer
legal funding company to the consumer. "Charges" includes all
administrative, origination, underwriting and other fees, including
interest, regardless of how such charges are denominated.
(c) "Consumer" means a natural person who resides or is
domiciled in Kansas and is a plaintiff in a civil action in Kansas.
"Consumer" includes the estate of a decedent who was domiciled in
Kansas at the time of death if the civil action is a wrongful death claim.
(d) "Consumer legal funding" means a nonrecourse transaction in
which a consumer legal funding company purchases and a consumer
assigns to the company a contingent right to receive an amount of the
potential proceeds of any recovery, including a settlement or judgment,
in the consumer's legal claim, and the funds to the consumer are used
for household or personal expenses. "Consumer legal funding" does not
include expenses directly related to prosecuting the legal claim.
(e) "Consumer legal funding company" or "company" means a
person or entity that enters into or facilitates a consumer legal funding
contract with a consumer. "Consumer legal funding company" does not
include:
(1) An immediate family member of the consumer;
(2) a bank, lender, financing entity or other special purpose entity:
(A) That provides financing to a consumer legal funding
company; or
(B) to which a consumer legal funding company grants a security
interest in or transfers any rights or interest in a consumer legal funding
contract; or
(3) an attorney or accountant who provides services to the
consumer.
(f) "Funded amount" means the amount of money provided to or
on behalf of the consumer in a consumer legal funding contract
excluding charges.
(g) "Funding date" means the date on which the funded amount is
transferred to the consumer by the consumer legal funding company by,
including, but not limited to, personal delivery, wire, ACH or other

HOUSE BILL No. 2518—page 2
electronic means or mailed by insured, certified or registered United
States mail.
(h) "Immediate family member" means a parent, sibling, child,
stepchild, spouse, domestic partner, cohabitant, immediate in-law, aunt,
uncle, first cousin, grandparent or grandchild.
(i) "Legal claim" means a civil claim or cause of action.
(j) "Resolution date" means the date the funded amount, plus the
agreed upon charges, are delivered to the consumer legal funding
company by the consumer, the consumer's attorney or otherwise.
Sec. 3. (a) A consumer legal funding contract shall:
(1) Be written in a clear manner using words with common,
everyday meanings to enable a reasonable consumer to read and
understand the terms of the contract without having to obtain the
assistance of a professional;
(2) be completely filled in when presented to the consumer for
signature;
(3) contain a right of rescission, allowing the consumer to cancel
the contract without penalty or further obligation if, within 10 business
days after the funding date, the consumer returns to the consumer legal
funding company the full amount of the disbursed funds;
(