Senate Finance Committee reviews House Bill 2 language, flags broad "bar" authority and several items for follow-up

Chair opened the session by warning members to follow language carefully because some requests could effectively change spending authority without returning to the Legislature. Charles, LFC staff, walked the committee through a spreadsheet of "bar adjustments" and explained two main authorities agencies seek: (1) the ability to spend up to 5% of certain fee or enterprise revenues and (2) the ability to move money between personnel, contracts and "other" operating categories.

Charles used examples to show how bar authority works in practice. He said the First Judicial District seeks a $60,000 increase to pay for supervised-visitation services funded by child-support-related revenues, and that agencies sometimes request additional FY26 authority when unanticipated revenue or grants arrive. Members repeatedly warned that overly broad bar language can let agencies reconfigure budgets in ways that bypass legislative intent and oversight.

Several specific items drew member scrutiny. Staff recommended capping the Environment Department's hazardous-waste emergency authority at $1,000,000 and flagged a House-passed provision that would let the Office of Natural Resources allocate $7,000,000 in trustee funds to "quality of life projects" in San Juan County; members questioned whether the trustee has operational capacity to manage those projects. The State Investment Council asked for next‑year authority to increase fees for private investment managers; members asked staff to return with a recommended cap given the council's roughly $11,000,000,000 in sidelined assets, calling the present language "very dangerous" if left unlimited.

Members also discussed contingency language tied to federal policy. Staff warned that a single-word change (for example, replacing "shall" with "may" in contingency clauses tied to the Affordable Care Act or Medicaid expansion) could create multibillion-dollar obligations for the state. On childcare and related programs staff recommended treating major childcare funding decisions as a separate decision point rather than folding them into broad contingency bars.

The committee systematically reviewed member-submitted language in a smaller "little sheet." Adrian explained that the small sheet consolidates member requests that do not directly increase appropriations — for example, merging rural residency components, waiving matches for certain small communities, and holding harmless transitions for charter school formula changes. Members flagged cybersecurity language for courts and the State Investment Council to ensure appropriate oversight if cybersecurity spending is carved out.

LFC and LLC staff were directed to return with additional detail on flagged lines (including the San Juan trustee transfer, SIC fee language, IT project reauthorizations and a set of IT lines with large unspent balances). The committee then moved to adopt the non-flagged language items from the executive and member lists; the chair announced adoption of the package for implementation while reserving flagged items for follow-up.

Next steps: staff (LFC/LLC) will provide background information on flagged items and return the detailed recommendations and tighter language for committee action before any final appropriation changes are confirmed.