Panel backs bill to let Legislature appropriate noncustodial federal funds, but narrows scope to exclude university grants

The House Appropriations Committee on Wednesday advanced House Bill 2148 by an 11–7 vote after adopting an amendment that narrows the bill’s scope to exclude federal research grants awarded to universities, university employees and the Arizona Board of Regents.

Duncan Spilsbury, research analyst, told the committee HB2148 would permit the Legislature to appropriate noncustodial federal monies, require a specified purpose for each appropriation and allow budget units to spend noncustodial federal funds consistent with state and federal law when the Legislature does not appropriate them. The bill includes a delayed effective date of Dec. 31, 2027.

Chairman Livingston offered an amendment excluding university research grants because of implementation and staffing concerns: the University of Arizona and other institutions receive large, year‑round awards and tracking them would be administratively burdensome, the chair said. The committee adopted that amendment in the chair’s name by voice vote.

Sponsor Representative Gail Griffin described HB2148 as a transparency bill intended to help the public and lawmakers see where federal pass‑through dollars flow; committee staff estimated about $31 billion in federal pass‑throughs to state agencies in FY2026. Members debated legislative oversight of federal funds and the balance between transparency and administrative feasibility. The committee gave the amended bill a due‑pass recommendation.