Transcript Highlights:

• We pay the managed care organizations per member per month, capitation payment, and out of those capitation
• </c> transportation is a capitated transportation is a capitated Arrangement<00:25:49.200><c> it</c><
• arrangement, and we do pay a capitation.
• So we do pay that capitation payment, and out of that capitation payment all of the non-emergency transportation
• So we do pay that capitation payment, and out of that capitation payment all of the non-emergency transportation

Summary: The Budget Review Subcommittee on Health and Family Services held its first meeting and received an overview from the Department for Medicaid Services on Medicaid’s behavioral health and substance use disorder services. Commissioner Lisa Lee and CFO Steve Beal said Kentucky Medicaid serves about 1.4 million members, including over half of Kentucky children, with 485,000 expansion members, more than 69,000 enrolled providers, and total fiscal year 2024 expenditures of $18.5 billion. They said Kentucky covers a broad range of behavioral health services, and behavioral health provider enrollment has grown from a little over 4,500 in 2019 to nearly 8,000 in 2024. They also described how Medicaid spending and utilization are tracked through claims and encounter data, with most members served through managed care organizations. Members focused on sharp increases in certain behavioral health billing codes, especially peer-to-peer services, and asked about reimbursement, utilization review, and whether the growth reflected increased need or expanded coverage. DMS said the rise was partly tied to combining facility and nonfacility behavioral health fee schedules in 2023, choosing the higher reimbursement rate to avoid cuts, and that the department has seen an uptick in peer-to-peer services. In response to concerns about overutilization, DMS said it mailed a letter to behavioral health providers, is considering limits and prior authorizations for some services, and plans to create a standardized monthly behavioral health report to monitor trends consistently and identify when controls may be needed. Lawmakers also asked whether the provider network is sufficient and whether access is adequate, especially for children. DMS said provider enrollment has expanded because behavioral health services were added to Medicaid in 2014 and because demand increased after COVID, but acknowledged studies showing children have less access than adults and said that would be an area of focus. The department said managed care organizations are required to ensure access to needed services and that current trends indicate access is available, though one member disagreed and said workforce shortages remain a major concern. Another member asked about non-emergency medical transportation spending, and DMS explained that it is handled through a capitated arrangement administered by the Transportation Cabinet rather than directly by the managed care organizations.

Transcript Highlights:

• It's great that we work on the capital budget and the 10-year Highway plan.
• It's great that we work on the capital budget and the 10-year Highway plan.
• I think Steve will be on your Capital Overview Committee, yes.
• </c> process that's how we plan our capital process that's how we plan our capital projects<00:46:36.119
• Tuesdays and maybe Thursdays once we get in the capital budget, but that's the plan. Okay, good.

Summary: The Public Works and Highways Committee held an orientation meeting focused on introducing members, outlining committee norms, and hearing an overview from the Department of Transportation. Chair David Mills emphasized the committee’s long-standing bipartisan working style, asked members to share contact information for short-notice scheduling, and noted that the committee would need to complete as much work as possible before the building is vacated later in the year. Members introduced themselves and described backgrounds in engineering, construction, planning, local government, military service, education, and business. Several members highlighted prior service on planning boards, school boards, zoning boards, or in transportation-related fields as relevant to the committee’s work. Members repeatedly described the committee as collegial and nonpartisan, with most bills going to the consent calendar. The chair also noted that the committee’s work centers on state infrastructure, including roads, bridges, highways, and buildings. Representative Cluder, the ranking member, and others echoed that the committee is effective because it talks issues through and resolves disagreements collaboratively. One member mentioned a recent trip that reinforced the importance of infrastructure resilience after storms and rebuilding efforts in other states. Department of Transportation officials, led by Assistant Commissioner and Chief Engineer David Rodrig, gave a detailed organizational and operational overview. They described DOT’s structure, mission of “transportation excellence,” and major responsibilities across highways, bridges, rail, transit, aeronautics, maintenance, and administration. Rodrig reported 1,651 permanent positions and 404 vacancies, 2,160 state bridges with 115 on the Red List, 4,600 centerline miles of roadway, 25 public airports, 11 transit systems, and 194 active state-owned rail lines. He also outlined FY 2024 spending, project development activity, highway maintenance operations, fleet and fuel systems, and the distinction between the highway fund and DOT’s budget, including the role of federal funds and the turnpike enterprise fund. No votes were taken and no bills were acted on during this orientation meeting.

Transcript Highlights:

• As explained by the department, preventing the drawing off of capital from a group to a member protects
• integrity and solvency of the group, safeguards policyholder funds, and ensures there’s sufficient capital
• As explained by the department, preventing the drawing off of capital from a group to a member protects
• As explained by the department, preventing the drawing off of capital from a group to a member protects
• provides an initial capital and surplus provides an initial capital and surplus required<00:14:57.279

Transcript Highlights:

• It's in capital outlay. The reason for that is because this was actually in two places.
• It's in capital outlay, so it's not needed here on line 73 for tabulator replacement.
• An additional amount is in capital outlay. And that's the $100 million? Mr.
• The rest of the funding for completion of that building is in the Capital Outlay Bill.
• All of them are capital.

Bills: SB193 , SB132 , SB35 , SB145

Committee: Senate Senate Finance

Transcript Highlights:

• </c><00:10:08.959><c> improvements</c><00:10:09.440><c> and</c> have upcoming capital improvements and
• have upcoming capital improvements and that's<00:10:09.920><c> important</c><00:10:10.320><c> because
• improvements were a reasons the capital improvements were a condition<00:10:14.720><c> uh</c><00:10:
• </c><00:10:34.000><c> improvements</c><00:10:34.480><c> which</c><00:10:34.720><c> are</c> these capital
• improvements which are these capital improvements which are pretty<00:10:35.120><c> substantial.

Committee: Joint Highways and Transportation

Transcript Highlights:

• Lastly, it's related to an alternative capital recovery process for certain utilities.
• We already have historically large capital investment plans in Texas, and there's booming growth, which
• Credit downgrades are a big deal because they raise the cost of borrowing capital.
• As he laid out, we're doing this on top of this other massive capital plan that we have today, and we
• precedential measures, like giving the utilities a higher return on equity or a more advantageous capital

Bills: HB842 , HB1907 , HB2844 , HB2892 , HB3439 , HB4211 , HB4536 , HB5111 , HB5138 , HB5182 , HB5247 , HB5269 , HB5323 , HB5435 , HJR201 , SB871 , HB3896 , SJR40

Committee: House State Affairs

Transcript Highlights:

• We must be super excited for another fun day of water infrastructure projects in the Capital Investment
• Thank you down to the capital as well.
• ><c> the</c><00:35:30.800><c> construction</c> capital building with the construction capital building
• Thank you, Representative capital today.
• </c><01:41:36.000><c> Appreciate</c> the capital to advocate. Appreciate the capital to advocate.

Bills: HF2178 , HF942 , HF2470 , HF1043 , HF1287 , HF1229 , HF1230 , HF424 , HF571 , HF404 , HF910 , HF1055 , HF318 , HF319 , HF401 , HF609 , HF306 , HF1599 , HF1881

Committee: House Capital Investment

Transcript Highlights:

• </c><01:36:55.760><c> um</c><01:36:56.040><c> in</c> carrying a sidearm at the capital um in carrying
• a sidearm at the capital um in my<01:36:57.280><c> my</c><01:36:58.000><c> youthful</c><01:36:58.480
• </c> addressing has to do with Capital addressing has to do with Capital Security<01:41:02.679><c> um
• grounds um and firearms on the capital grounds um and so<01:41:07.679><c> this</c><01:41:07.840><c>
• </c> that ban firearms in their Capital that ban firearms in their Capital complexes<01:41:50.119><c>

Committee: House Public Safety Finance and Policy

Transcript Highlights:

• It's a very capital-intensive business.
• It's a very capital-intensive business.
• It's a very capital-intensive business.
• I mean, what will Hawaiian Electric do to raise capital?
• I mean, they'd be in a better position to have access to lower-cost capital, though.

Summary: The joint committees heard testimony on HB 982 HD1, a wildfire-related measure aimed at creating a wildfire recovery fund and a financing structure to address future catastrophic wildfire liability. The Department of Commerce and Consumer Affairs, the Division of Consumer Advocacy, and the Public Utilities Commission submitted comments and were available for questions. Supporters included IBW Local 1260, Kauai Island Utility Cooperative, Clearway Energy Group, Hawaiian Electric, Par Hawaii, and others, while Charter Communications and the Hawaii Association for Justice opposed or raised concerns. Life of the Land supported the bill but urged changes to the definition of a catastrophic wildfire and noted concerns about prudency review language. IBW Local 1260 asked to restore language from the original draft, and Charter warned the bill could impair existing contract and indemnity rights unless amended. A major focus of the hearing was Hawaiian Electric’s position on the HD1 version. Hawaiian Electric strongly supported the original bill but objected to the HD1 requirement for an additional $500 million shareholder contribution, arguing it was not feasible and could delay or prevent the fund from operating. The company said the bill would help protect customers and improve credit ratings by creating a dedicated revenue stream and a bankruptcy-remote financing structure, which it said would lower borrowing costs over time. Members questioned how the $1 billion securitization amount was chosen, whether credit rating agencies had indicated it was sufficient, and how the bill would work in bankruptcy; Hawaiian Electric said the amount was a balance among interests, not based on a specific agency directive, and that it would follow up on bankruptcy questions. Opponents and skeptics raised concerns about liability caps, the new claims process, and unclear language on damages above the fund’s limits. The Hawaii Association for Justice argued the bill limits victims’ remedies and gives too much authority to the new entity without clear guardrails. Committee members also pressed Hawaiian Electric on comparisons to California, the feasibility of the shareholder contribution, and whether alternative capital-raising or divestiture options had been considered. No vote or final action was taken in the portion of the hearing provided; testimony and questioning continued with follow-up information requested from Hawaiian Electric and others.

Transcript Highlights:

• Capital shows up in green, and this is split between new appropriations and reappropriations.
• Capital shows. transportation budget through the 26 supplemental.
• Capital shows up in green, and this is split between new appropriations and reappropriations.
• capital.
• The remaining would be capital outlays, professional service contracts, and travel.

Committee: Joint Joint Legislative-Executive Committee on Budget Transparency and Fiscal Sustainability

Summary: The committee held its first meeting, with co-chairs and members introducing themselves and staff outlining the committee’s statutory charge under the 2026 supplemental operating budget. Staff explained that the committee is tasked with studying budget transparency and fiscal sustainability in two phases: first, revenue growth, spending assumptions, statutory cost drivers, and carryforward/maintenance levels; and later, staffing, overhead, performance management, and public reporting tools. The committee also discussed its goals, with members emphasizing a shared factual understanding of Washington’s fiscal situation, the causes of projected structural deficits, and possible paths to a more sustainable operating budget. Staff then gave a detailed operating budget basics presentation. They reviewed the size and composition of the operating budget, explaining that most spending is concentrated in grants and client services, salaries and benefits, and goods and services, with K-12 education, DSHS, the Health Care Authority, DCYF, corrections, and higher education making up most NGFO spending. They also walked through the distinction between constitutional, federal, statutory, and discretionary spending; the role of caseload and per-capita forecasts; how maintenance level and policy level budgets are built; and how the four-year outlook works, including revenue forecasts, reversions, budget stabilization account reserves, and the official outlook adoption process. Members asked several questions about what is or is not included in the outlook, especially future collective bargaining agreements, health care inflation, court-ordered liabilities, and whether the budget could better separate mandatory from discretionary spending over time. Staff said some of those questions would require follow-up and noted the existence of an outlook accuracy report. The committee then heard from Josh Goodman of the Pew Charitable Trusts, who introduced Pew’s state fiscal work and its role as the nonprofit partner supporting the committee. He said Pew would help analyze long-term fiscal sustainability, reserve policies, recession preparedness, and practices from other states, and would draw on its 50-state data and subject-matter experts. No votes were taken and no formal actions were reported at this meeting.

Transcript Highlights:

• Over the last 20 years, half of venture capital money has come to California companies.
• Then on top of that, as Director Myers alluded, we have the highest amount of venture capital California
• First time over half a billion startups, unicorns... ...U.S. venture capital.
• That's where CalIP... ...based capital to efficiently move projects and businesses forward.
• Without tools like CalIP, many child care providers would not be able to access the capital needed to

Summary: The hearing focused on the Governor’s Office of Business and Economic Development (Go-Biz) and several related budget proposals. Director D.D. Myers described the California Jobs First economic blueprint, regional planning efforts across 13 regions, and the state’s strategy to target sectors such as ag tech, space, life sciences, semiconductors, and emerging technologies. She also discussed the California brand campaign, export promotion, film tax credits, and the California Civic Media Fund, emphasizing job creation, regional equity, and business attraction/retention. Members raised questions about support for journalism, arts and creative industries, AI’s impact on jobs, foreign direct investment, manufacturing, tariffs, and how the Jobs First framework is being implemented across regions. Go-Biz then presented trailer bill language to extend the encumbrance deadline for remaining Jobs First administrative funds and to codify the Office of Regional Economic Development Initiatives. The department said $95 million of the $100 million Jobs First appropriation had already been deployed to grants for counties and tribes, and members asked for more information on regional outcomes, including Orange County and the North State. Public comment supported Jobs First and the Small Business Development Centers’ role in helping businesses access capital and create jobs. The committee also heard a request for ongoing CalExport funding to replace uncertain federal STEP support; the LAO noted the Legislature may want to weigh whether to backfill federal reductions, while Go-Biz argued the state program is needed because federal support appears unlikely to continue and demand exceeds available funding. The committee next heard the film and television tax credit staffing request. Go-Biz asked for funding for three permanent positions to manage the expanded program, and the LAO recommended approval given the increased workload. The Film Commission reported a sharp rise in applications after AB 1138 and the program expansion, with productions taking place both inside and outside the Los Angeles 30-mile zone and activity spread across the state. Finally, Go-Biz presented a request for one permanent position and one graduate student assistant to support innovation and emerging technologies, including quantum and fusion. Members asked about the use of the state’s quantum funding, and staff explained it would support microgrants, state capacity-building, and workforce education. No formal votes were taken in the portions provided, and the chair indicated some items would be moved and heard later in the agenda.

Transcript Highlights:

• But don’t create a footprint, don’t hire employees, don’t do capital investment.
• So this increases the cost of capital investment for the employers that are expanding here.
• And what we're asking— The next 10 years in capital infrastructure improvements.
• But yes, a considerable amount of those capital improvements will be invested in snowmaking.
• Or platinum transactions from capital gains tax.

Bills: SB190 , SB152 , SB77 , SB150 , SB151 , SB156 , SB172 , SB182 , SB185 , SB212 , SB170 , SB133 , SB174 , SB163

Committee: Senate Senate Tax, Business & Transportation

Transcript Highlights:

• UAL, and the four other discretionary items are the retiring or defeasance of bonds, funding for capital
• A lot of those projects are in capital outlay anyway. We'll be likely making that recommendation.
• It's being provided through capital outlay.
• Well, when I was looking at capital outlay and deferred maintenance, I was wondering—I'm surprised; I
• And that includes both capital, the capital cases where someone's facing the death penalty, but also.

Summary: The committee met to review budget and fiscal items, beginning with a roll call and a reminder about severe weather and the need to keep the meeting brief. Members first received the January fiscal status statement and certified the prior-year surplus at $577,073,871, with no changes from the prior month. The fiscal status statement was approved without objection. Staff then reviewed the five-year baseline budget and continuation/standstill budgets, noting projected imbalances in later years driven by revenue declines, including the redirection of motor vehicle sales tax, and by rising costs such as inflation and Medicaid adjustments. Representative Amadee asked about Medicaid growth and SNAP administrative costs, and staff explained that the SNAP federal match change is separate from Medicaid. The governor’s executive budget presentation focused on a third year of standstill budgeting, efficiency savings, and the impact of one-time reductions and agency reorganizations. Officials said the budget avoids recurring spending from nonrecurring revenue and incorporates savings from prior efficiency efforts. Major items discussed included funding for LA Gator vouchers, the high-impact jobs program at Louisiana Economic Development, DCFS modernization, corrections overtime and offender costs, Angola population growth, nursing home and MCO adjustments at LDH, and additional support for the MJ Foster Scholarship and Board of Regents systems. Members also discussed the distinction between state general fund and federal funds, the effect of inflation on specific purchases, and the use of surplus dollars, including deposits to the Budget Stabilization Fund and UAL paydown. No formal action was taken on the budget presentation. Later items included the FY27 expenditure limit calculation of $20.1 billion, up $953 million from FY26, and the annual comprehensive financial report, which received an unmodified audit opinion. The committee approved a BA-7 increasing federal funds for the governor’s office by $2 million for U.S. DOT-related infrastructure and rural transit work. It also approved Facility Planning and Control requests to add five higher education deferred maintenance projects and to combine two Baton Rouge Community College projects. CPRA received approval to extend contracts with Coastal Estuary Services and Access Sciences for monitoring and records-management services. The committee also approved a legislative intent clarification for a $500,000 appropriation to the New Orleans Recreational Development Foundation. The final major discussion was a presentation on a weighted caseload study for appellate and district courts. Judicial officials explained that the study updates an outdated formula used to assess judgeship needs, incorporates specialty courts and commissioners, and is intended as one tool in a broader collaborative process with the legislature. Members raised concerns about the number of judges, court funding, and how Louisiana compares with other states. No vote was taken on the study, but the discussion emphasized future collaboration on judicial resource allocation and possible structural changes.

Transcript Highlights:

• I would like to testify in support of HB 476 to raise the capital gains rate.
• wealthiest of the wealthy, so 80% of the capital gains go to people earning over $400,000.
• wealthiest of the wealthy, so 80% of the capital gains go to people earning over $400,000.
• wealthiest of the wealthy, so 80% of the capital gains go to people earning over $400,000.
• wealthiest of the wealthy, so 80% of the capital gains go to people earning over $400,000.

Committee: House Economic Development & Technology

Summary: The committee on Economic Development and Technology heard testimony on several bills, beginning with HB 22, which would limit state and local cooperation with federal immigration detainers. Supporters, including the Legal Clinic, the Office of the Public Defender, and the ACLU of Hawaiʻi, argued the bill would protect due process and constitutional rights regardless of immigration status. Some supporters requested amendments, including removing a probable-cause terrorism provision, adding enforcement language, and preserving warrant requirements. Public testimony was heavily in favor, with the chair announcing 91 testimonies in support and 52 in opposition. The committee then heard HB 73, which would prohibit setting aside public lands for immigration detention facilities. Testifiers in support said public land should serve local needs, not detention centers, and cited housing, food security, and community trust concerns. The Office of the Public Defender and others also supported the measure, and the chair reported 85 testimonies in support and 40 in opposition. The committee next took up HB 438, which would fund legal representation for people in immigration proceedings. Supporters, including the Public Defender, the University of Hawaiʻi Law School Refugee and Immigration Clinic, the Hawaiʻi Coalition for Immigrant Rights, the Legal Clinic, and the ACLU, emphasized the civil nature of immigration court, the severe consequences of removal, and the need for more pro bono and trained attorneys. Several suggested amendments focused on training and building a legal-services pipeline; the chair reported 83 testimonies in support and 51 in opposition. The committee also heard HB 457, aimed at requiring notice to detained individuals about their rights when ICE seeks to interview them or has a detainer request. Supporters said the bill would ensure people understand their right to remain silent and to refuse interviews, and the Legal Clinic suggested the warning be given orally, potentially via recorded messages, rather than only in writing. The Office of the Public Defender noted the bill aligns with existing due-process warnings in criminal court and suggested referencing current law. Finally, HB 476, which would raise the capital gains tax rate, drew support from Hawaiʻi Appleseed on fairness grounds; the Department of Taxation said it would review revenue questions but had no estimate available. After recess, the committee returned to decision-making and moved HB 22 forward on the chair’s recommendation of HD1, with the chair noting that the bill already contained language allowing counties to adopt stronger standards and protections.

Transcript Highlights:

• Third reading of the bill: An act authorizing the Commissioner of Capital Asset Management and Maintenance
• An act authorizing the Commissioner of Capital Asset Management and Maintenance to transfer certain parcels
• This bill authorizes $425.1 million in capital spending across nine priority areas: applied AI and quantum
• is the next phase of a strategy that is already producing measurable results, companies growing, capital
• If we want to continue bringing in the much-needed capital and businesses to sustain our tax base, we

Summary: The House adopted a resolution congratulating Fire Chief Timothy Clancy on his retirement from the Whitman Fire Department after suspending the rules. It also concurred with a Senate petition authorizing MassDOT to take easements over certain land in Woburn and Burlington, and then gave final passage to several local bills, including measures on culverts and dams, alcohol licenses in Milford, Salem, and Bridgewater, and firefighter civil service eligibility in Arlington. The chamber then took up several bills on second reading and third reading, including a Norton land parcel bill, a Watertown property tax classification bill for fiscal year 2027 and subsequent years, and a transportation bond bill. In each case, the House suspended Rule 7A, adopted the Ways and Means amendments, and ordered the bills to a third reading or passed them to be engrossed. The transportation bond bill was substituted for a broader bonds bill and advanced as amended. The main debate centered on House 5562, the economic development bond bill. Representative Viola described it as a $425.1 million package supporting applied AI and quantum, defense, robotics, ag tech, downtown revitalization, housing, higher education bridge funding, and business climate changes such as lower LLC fees, a CPA licensing pathway, nurse licensing changes, film tax credit adjustments, internship incentives, and food truck inspection reforms. Representative Haggerty and Representative Kazner spoke in support, emphasizing housing production, site plan review, land use board training, commercial conversion, faith-based housing, and local control. The House adopted Consolidated Amendment A by roll call 142-5, with a second consolidated amendment then made available; the bill remained under consideration at the end of the transcript.

Transcript Highlights:

• We make large capital grant awards to various agencies throughout the state.
• There's over a billion dollars of funds that have been awarded to various capital projects in the Bay
• It remains one of Silicon Valley's highest capital... the Bay Area transit agencies are struggling with
• It remains one of the Silicon Valley's highest capital. Of the BART to Silicon Valley project.
• It remains one of Silicon Valley's highest capital projects and is extremely critical not only for the

Summary: The Assembly Budget Committee held an informational hearing on two early-action budget bills. AB 107 would make mostly technical corrections to prior budget acts, including extending deadlines, fixing fiscal language, moving $20 million for California travel and tourism promotion from Visit California to GoBiz, and making changes related to Proposition 4 climate bond funding. A key provision would exempt development of program guidelines and selection criteria for certain 2025 climate bond appropriations from the Administrative Procedure Act, which supporters said would speed implementation of wildfire prevention and other projects. Members raised concerns about oversight, competitive bidding, and whether vendors and safeguards were sufficient, while public commenters from water, climate, and conservation groups strongly supported the APA exemption and urged similar treatment for future allocations. AB 117 would authorize up to $590 million in short-term loans for four Bay Area transit agencies: BART, Muni, Caltrain, and AC Transit. Finance explained that the loan would be administered through MTC using Bay Area TIRCP funds that have been awarded but not yet allocated, making the structure cost-neutral to the state. The loan would run 12 years, with the first two years interest-only, and repayment would be secured through state transit assistance funds if needed. Several members questioned whether the proposal amounted to a bailout, whether it was fair to prioritize the Bay Area, and whether the structure adequately protected other projects, especially BART to Silicon Valley Phase 2; Finance and committee staff said safeguards and monitoring provisions were included and that no state funds were at risk. Public testimony was largely supportive of both bills. Transit agencies and local officials said the loan would provide bridge financing as ridership remains below pre-pandemic levels, while allowing service improvements and major events to continue. San Jose representatives and some members asked for possible cleanup language to better protect large regional capital projects. The chair said the committee anticipated hearing the bills on the floor later in the week, and the hearing was adjourned after public comment.

Transcript Highlights:

• We make large capital grant awards to various agencies throughout the state.
• There's over a billion dollars of funds that have been awarded to various capital projects in the Bay
• It remains one of Silicon Valley's highest capital... the Bay Area transit agencies are struggling with
• It remains one of the Silicon Valley's highest capital. Of the BART to Silicon Valley project.
• It remains one of Silicon Valley's highest-capital projects and is extremely critical not only for the

Committee: House Budget

Transcript Highlights:

• During our examination of capital assets, the following discrepancies were noted: the district failed
• to capitalize $851,000 of construction expenditures related to the baseball-softball complex.
• Eight items with an initial cost of $200,000 were included as capital asset additions, but due to errors
• One capital outlay purchase was not properly capitalized, and of the ten items we selected for observation
• Was that prior finding related to misclassification on the capitalization of the assets on construction

Committee: All LEGISLATIVE JOINT AUDITING-EDUCATIONAL INSTITUTIONS

Summary: The meeting opened with prayer and approval of the January 8 minutes, then moved to review of education audit reports. The first report concerned Northwest Arkansas Community College, which had three findings, including repeat internal control deficiencies that caused financial statement misstatements and a tuition revenue loss tied to a new student information system. College officials said the issues were largely misclassification and process problems, not missing money, and described corrective steps such as monthly closing checklists, approval controls for journal entries, cross-training, and efforts to address staffing turnover and fill finance vacancies. Members asked about the tuition issue, whether students were notified or billed, and whether the software problem affected other institutions; audit staff said they were not aware of the same scenario elsewhere. The committee then filed the report as reviewed. The next report was Cedarville School District, which had one finding involving $794 in improper credit card charges by a resigned elementary teacher. The district was reimbursed, a police report was filed, and the matter was referred to the Professional Licensure Standards Board; members asked whether any further action or license-related consequences were known, but staff said they were not aware of additional action. The report was filed as reviewed. The final finding was for West Memphis School District, where auditors reported repeat capital asset issues, including failure to capitalize about $851,000 in construction costs for a baseball-softball complex and problems with inventory and asset inspection. The superintendent said the district had recently begun using Legislative Audit after prior private audits, and described new controls such as multi-level purchase approvals, separation of duties, tagging of equipment, and a cleanup of old inventory records. Members also discussed the relationship between private audits and Legislative Audit reviews, with staff explaining that private audit reports for public school districts still come before the committee and that the executive committee determines when Legislative Audit performs an audit. The committee filed the West Memphis report as reviewed and noted that 28 school districts had no findings before adjourning.

Transcript Highlights:

• Um, House Bill 1047 was making it a capital crime to kill certain government officials.
• </c><00:45:17.520><c> crime</c><00:45:18.000><c> to</c><00:45:18.319><c> kill</c> um making it a capital
• crime to kill um making it a capital crime to kill certain<00:45:19.040><c> government</c><00:45:19.440
• Um, this bill seeks to make the murder of certain government officials a capital crime.
• The motion is inexpedient to legislate. capital crime. capital crime.

Committee: House Criminal Justice and Public Safety

Transcript Highlights:

• We'll open the Capital Budget Committee meeting.
• budgeted entity of the state; therefore, there's no impact estimated for either the operating or capital
• The estimated fiscal note shows capital budget impacts of $54,600 total funds over the 2025-27 biennium
• The Department of Commerce identified The Department of Commerce identifies both operating and capital
• House Bill 2353, which is, as a reminder, the bill that increases the pre-designed threshold for capital

Summary: The Capital Budget Committee held public hearings on several bills. On Substitute House Bill 2236, staff explained changes to the Washington State Housing Finance Commission’s authority, including allowing direct mortgage loans for multifamily housing, clarifying it is not a retail mortgage lender, extending bond counsel terms, removing a notice requirement before bond issuance, and repealing outdated statutory provisions. Representative Zahn and commission staff said the bill modernizes the agency and would help finance affordable housing without using state general funds. Testimony was generally supportive, with questions focused on higher interest rates, down payment assistance, and equity for borrowers of color; the commission said it works with banks, administers programs such as Covenant Home Ownership, and aims to support both homebuyers and developers. The chair then closed the hearing on SHB 2236. The committee next heard House Bill 2273 on reducing embodied carbon emissions in buildings and building materials. Staff described requirements for the State Building Code Council to adopt phased embodied-carbon standards for large projects, with reporting, a public database, and Commerce educational resources; the fiscal note showed operating and capital costs. Representative Duerr said the bill responds to rising energy demand and could help lower building costs while supporting innovation, including Washington wood products. Supportive testimony came from environmental justice advocates and an architect, who said embodied carbon reductions are already feasible and often cost-neutral. Opponents, including the Washington Aggregate and Concrete Association and Washington Citizens Against Unfair Taxes, argued the bill could raise costs, create sourcing and delay problems, and should not exempt schools. The hearing on HB 2273 was then closed. The committee also heard Senate Bill 5188, which would let the Public Works Board issue loans for broadband infrastructure repair and replacement. Staff said the bill expands the existing broadband service expansion program to cover repair and replacement of middle-mile and last-mile infrastructure, with Commerce fiscal impacts noted. The Association of Washington Cities testified with concerns that the bill could signal further use of the Public Works Assistance Account, which has already seen sweeps and could affect future water, sewer, wastewater, and solid waste funding. A question from Representative Dye raised whether the program should instead be tied to the Curb Board; staff and the witness agreed to continue that discussion. The hearing was then closed. In executive session, the committee took up House Bill 2353, House Bill 2420, and House Bill 2470. HB 2353, which raises the predesign threshold for capital construction projects from $10 million to $15 million and indexes it to inflation, was reported out of committee 18-0 with one excused. The committee then adopted and reported out the proposed substitute for HB 2420, which increases the small works roster contract limit and changes the effective date to January 1, 2027, also by an 18-0 vote with one excused. Staff also briefed members on a proposed substitute for HB 2470 concerning school construction assistance for on-base schools, but no vote was taken in the transcript. The chair announced another hearing and executive session for Friday and asked members to submit amendments by the next morning.